QUESTION: New Product Releases, Pre-Orders, and Secondary Market Price Inflation - What's Your Take?

There's something I do not understand about figures like some of the recent releases I have been reading about on various forums. Perhaps somebody here knows more than I do about the production and marketing side of modern action figures and can offer some insight.

Figures like, for example, the recently released Very Cool VCF-2052 Russian Spetznas figure as has been lately discussed on this forum, show up as "pre-orders." If you want one, you pretty much have to buy it sight unseen - at prices between $150 and $200 USD - while it is a pre-order, as they sell out at the retailers before they are ever in stock. Then you wait, for six or eight months or a year to receive your purchase.

Finally the figures are released, but since they're ostensibly sold out during pre-order, rather than the retailers restocking, the figures instead appear directly on the "secondary market" (eBay) at a considerable markup over original retail.

At the same time the figures show up on eBay, however, parted out pieces also show up, almost exclusively from China and Hong Kong sellers.

This figure game is starting to seem like a racket to me. The manufacturers announce a figure, they accept a limited number of pre-orders before the figure is released, by the time the figure is actually released it is supposedly "sold out" everywhere, yet an endless supply of both complete figures and parted out accessories show up on the secondary market at inflated prices.

Is the whole "pre-sale" and "sold out" thing a scam? It's not like the secondary market sales are from American or UK sellers, whom one might expect to pre-order a figure and, after deciding it's not to their taste, decide to pass it on. The resales and the parted out figures are almost entirely China-based sellers, just like the original pre-sales. In fact, the figures almost always show up on the secondary market before those who placed pre-orders receive their purchases.

Is almost the entire original run of these figures purchased by China-based scalpers and speculators during the pre-order stage? I find that difficult to believe. Speculating in action figures is a risky proposition.

I'm coming to think the entire scheme is a scam. These figures don't actually sell out. The manufacturers crank out as many of them as they can sell. The "sold out" sham is a marketing gimmick to inflate the prices based on "perceived scarcity." It appears that far more of these figures sell on the supposedly secondary market at higher prices than were ever available at regular retail. A handful of buyers might pick up the figure at the pre-sale price, but in exchange for a lower initial purchase price they are essentially loaning their money to the sellers and manufacturers for up to a year prior to receiving the item.

With increasing frequency I see comments on this and other forums from collectors saying, after finally seeing owner photos, that they wish they had pre-ordered various figures. It used to be that collectors and fans could wait to see "in hand" examples before making a purchase decision. Now, it seems the options are to purchase the items sight-unseen and wait months or more to receive it (and even then there's no guarantee, with retailers subject to not receiving sufficient stock to cover pre-sales), or to pay inflated secondary market prices upon release.

Is the situation truly a result of pre-sale speculators purchasing most of the stock, or are we, as collectors, fans, and customers, being taken advantage of?

davidd wrote:
Is the situation truly a result of pre-sale speculators purchasing most of the stock

This is probably the case.

For the manufacturer it's better to sell large quantities of their figure to shops and resellers, and don't deal with individual customers. This is exactly what happens in other markets too. Most people don't get their Barbies, Playmobil, Lego, Märklin, Revell-kits (or whatever toy or appliance) from the factory/manufacturor, but at a shop. At the factory it's sold out pretty quickly, but shops often still have them in stock.

The manufacturer wants to sell items quickly and don't want to have stocks of their products. A shop on the other hand needs to have a large variety of products, otherwise no-one is entering their business. Difference nowadays is that a lot of shops (also) sell their stuff on Ebay or similar sites.

davidd wrote:There's something I do not understand about figures like some of the recent releases I have been reading about on various forums. Perhaps somebody here knows more than I do about the production and marketing side of modern action figures and can offer some insight.

Figures like, for example, the recently released Very Cool VCF-2052 Russian Spetznas figure as has been lately discussed on this forum, show up as "pre-orders." If you want one, you pretty much have to buy it sight unseen - at prices between $150 and $200 USD - while it is a pre-order, as they sell out at the retailers before they are ever in stock. Then you wait, for six or eight months or a year to receive your purchase.

Finally the figures are released, but since they're ostensibly sold out during pre-order, rather than the retailers restocking, the figures instead appear directly on the "secondary market" (eBay) at a considerable markup over original retail.

At the same time the figures show up on eBay, however, parted out pieces also show up, almost exclusively from China and Hong Kong sellers.

As TravelGuide said -- retailers don't want stock sitting around costing them money. Many of the small "mom & pop" stores don't have endless funds to have sitting in their inventory since they have to pay up front for any/all stock purchased -- or as the distributor receives stock -- even if the consumer does not. Also, there was a time when for many of these items, you would buy by the case -- so even if they only received 1-2 POs, they would have to buy whatever a "case count" was. It's my understanding that that is no longer the situation in many regards, so they are now able to keep it closer to actual PO numbers, with perhaps 5-6 extras (just in case). Sideshow specifically limits the per unit number that all North American & European retailers get -- and that number is not as high as many people would think (in that situation it IS a SCAM, as they are intentionally keeping their "competitors" numbers low, and also fulfilling their own orders, before releasing product to the retailers that they act as "distributor" for).

davidd wrote:This figure game is starting to seem like a racket to me. The manufacturers announce a figure, they accept a limited number of pre-orders before the figure is released, by the time the figure is actually released it is supposedly "sold out" everywhere, yet an endless supply of both complete figures and parted out accessories show up on the secondary market at inflated prices.

Is the whole "pre-sale" and "sold out" thing a scam? It's not like the secondary market sales are from American or UK sellers, whom one might expect to pre-order a figure and, after deciding it's not to their taste, decide to pass it on. The resales and the parted out figures are almost entirely China-based sellers, just like the original pre-sales. In fact, the figures almost always show up on the secondary market before those who placed pre-orders receive their purchases.

Is almost the entire original run of these figures purchased by China-based scalpers and speculators during the pre-order stage? I find that difficult to believe. Speculating in action figures is a risky proposition.

Again, for N. American & Euorpean retailers, stock is either limited by the distributor, or by their own business savviness -- look at how long those hideous "Duck" Troopers from the Star Wars sequels have languished on Sideshow and other sites as an example of money lost to retailers (Hot Toys, of course, and Disney, made their money a long time ago). Scalpers and speculators have always taken advantage of any and every "collectible" market for as long as I can remember, and parted out boxed sets often makes twice as much money as full sets -- as folks scramble to get, and are seemingly willing to pay, for all the "hard to find" & "popular" pieces from any given set. The head sculpt in the VeryCool set that you mentioned is a good example -- hence the reason it is so expensive. Not to mention, a large number of the bootleg figures out there, particularly of popular brands are taken right from the factories in China, out the backdoor, and copies made from folks working in those factories. Even though wages have gone up over recent years in Chinese factories, they still don't pay those people what many would consider a reasonable "living wage" -- hence the side hustle of making copies and calling them something else, or making extras and shuffling them out the back door. And yes, Asian buyers (particularly in China), being close to the source, always get their stuff first, and as many are speculators -- they are bound to get their product LONG before anyone else. And, as the saying goes everyone else is relegated to getting their stuff from a "slow boat from China." I'm guessing that most US based retailers are no longer willing to take the chance to order a ton of extra figures anymore, simply due to rising costs of these things. I know I sure as hell wouldn't want thousands of dollars (if not hundreds of thousands) sitting in a warehouse because I was expecting people to wait for in-hand pics before buying. As the cost of box sets continues to go through the roof, we're going to see more and more of this situation. Back in the day, we had maybe 3-4 different companies producing "high end" action figures -- now we have around a 50-100, with new companies popping up all the time -- the competition is great for the customer to an extent, but it puts a huge financial burden on retailers to take chances; I've noticed their are some companies that don't seem to get a lot of representation at some retailers, and I'll bet it has more to do with risk rather than anything (though when it comes to bootleg companies like Soosoo Toys that make figures of stuff that companies like Disney hold the license to, Sideshow has threatened companies with cutting off their access to Hot Toys products if they promote or carry said bootlegs). We are at the mercy of his hobby as collectors, and the situation is only going to get worse as the nature of the manufacturing and retailer situations continues to change.

davidd wrote:I'm coming to think the entire scheme is a scam. These figures don't actually sell out. The manufacturers crank out as many of them as they can sell. The "sold out" sham is a marketing gimmick to inflate the prices based on "perceived scarcity." It appears that far more of these figures sell on the supposedly secondary market at higher prices than were ever available at regular retail. A handful of buyers might pick up the figure at the pre-sale price, but in exchange for a lower initial purchase price they are essentially loaning their money to the sellers and manufacturers for up to a year prior to receiving the item.

No. From what I've been told, numbers have dropped dramatically in manufacturing. Gone are even the days when Hot Toys would make say 15,000 units per item. Hence, another reason for the rising costs -- it's much more expensive to make 2000 units than it is 15-20,000. Some items, do of course, go back into production -- Sideshow has done it on a couple of their items (the Mythos Obi-Wan, for example -- though they short-changed the second batches by using inferior cloth, crappier body, poorer paint apps, etc. from Batch 1). Saving them money on going back to the factory, but screwing over the customer in the process by not lowering the price. As long as the molds are kept in good shape and not left outside to rot, rust, etc. (like QMX did with the Star Trek, and other molds they had for their 1/6 figures) -- going back to produce more is fairly easy; I'm sure that is exactly what Hot Toys has done with the Mandalorian figures -- make more as demand rises -- but then it's easier for them as they have a proprietary factory. No one else does -- many use the same factories that licensed product comes from (hence the reason we see so many bootleg companies offering the same stuff).

davidd wrote:With increasing frequency I see comments on this and other forums from collectors saying, after finally seeing owner photos, that they wish they had pre-ordered various figures. It used to be that collectors and fans could wait to see "in hand" examples before making a purchase decision. Now, it seems the options are to purchase the items sight-unseen and wait months or more to receive it (and even then there's no guarantee, with retailers subject to not receiving sufficient stock to cover pre-sales), or to pay inflated secondary market prices upon release.

Is the situation truly a result of pre-sale speculators purchasing most of the stock, or are we, as collectors, fans, and customers, being taken advantage of?

I answered the "waiting for in-hand" pics question, but I'll say it again: the days of figures being produced in large quantities to sustain this are dwindling dramatically. Look at the recent TBLeague figure that was cancelled (to possibly show up later down the road) -- that was no doubt a direct response to low PO quantities. Frankly, when TBLeague just started, they were slow to produce, and that was a good and bad thing. Bad, because we as collectors want more, good because they could take their time to gauge interest and wait for the POs to roll in. Now they seem to be cranking these things out so quickly (particularly their boxed sets), that they are over-saturating the market with repetitive drivel that is starting to come off as stale and boring -- mostly due to their "own" un-licensed figures. If no one shows interest, why go to the cost of putting up $20,000-30,000 dollars to pay a factory to make something very few people seem to want. It all comes down to supply and demand; if the speculators and scalpers see a demand, and the truly gifted ones can read a market pretty well it seems -- then stuff gets made. It may seem like a scam, and this is indeed a strange hobby to commit to "purchase" months to years in advance, but sadly that is the hobby we are in. At least TBLeague, unlike so many others usually only takes months to put out a product (though that's probably fairly easy since they reuse so much stuff), so the wait isn't as excruciating as it is for other things (Hot Toys Ripley & Michael Keaton Batman Returns -- where we literally had to wait 3-4 years after PO). This is a risky hobby for both speculators and collectors -- we run the risk of losing out on something because we sat on the fence too long, or if truly desperate pay after-market prices from scalpers. I don't blame any retailer for being smart enough not to put themselves into a financial hole by stockpiling -- I blame the fact that the manufacturer doesn't seem to give 2 $@#ts about quality control so that whatever they make looks at least as close to the promo images as possible. THAT is the number one issue outside of consumer expense in this hobby -- the downgrade of final product (sometimes so egregiously) from promo to final that it often makes missing out worth it in the larger scheme of things.

Stryker2011 wrote:I don't blame any retailer for being smart enough not to put themselves into a financial hole by stockpiling -- I blame the fact that the manufacturer doesn't seem to give 2 $@#ts about quality control so that whatever they make looks at least as close to the promo images as possible. THAT is the number one issue outside of consumer expense in this hobby -- the downgrade of final product (sometimes so egregiously) from promo to final that it often makes missing out worth it in the larger scheme of things.

Agree with this completely. In my opinion, THAT is the main 'scam' going on here... the disparity between promo pics and final product. And that goes across the entire hobby, regardless of whether it's Hot Toys, tbleague, or any of the various and sundry third party 'companies' out there. Pre-ordering in advance would not be anywhere near as risky if the final product were much more 'guaranteed'.

I must admit Dave I don't get the whole pre-order thing either, let alone the inflated price hikes once a figure is sold out. I think we have all done it at some point, you see a figure then decide on something else thinking I will come back t that one. Then later, the prices become that high, its impossible to get one.
What annoys me the most about pre-orders is the date change. They will say for example, it will be release in Q1, only later to be changed to Q3 or Q4! The worse case of this was for my Tardis, where the date was knocked back by 18 months!
I have pretty much resigned myself now to kitbashing my own figs. Sure, they will never be worth as much, but at least I don't have to wait forever for them!

BAMComix wrote:
I have pretty much resigned myself now to kitbashing my own figs. Sure, they will never be worth as much, but at least I don't have to wait forever for them!

I feel you! You also have much more control over how it turns out, that way. :'D

skywalkersaga wrote:

BAMComix wrote:
I have pretty much resigned myself now to kitbashing my own figs. Sure, they will never be worth as much, but at least I don't have to wait forever for them!

I feel you! You also have much more control over how it turns out, that way. :'D

I agree

I haven't bought boxed figures since dragon was thing, the last I bought where their italian troops, my brother has those since I never took them out of the box and he's into collecting boxed stuff.

That said I have never pre-ordered anything, I apply a good saying from here "Musico pago no toca bien." Paid musician doesn't play well, If I can't see what I'm buying then I'm not interested in acquiring it, sure there are some cool things that I've missed and now are expensive to get but I would much rather play it safe than sorry. This is also something that I apply to my other past time, video games, I've been burned before and I'm not willing to burn again.

My take is that when you’re producing original characters with not so original ideas, it has to be hard for everyone in the supply chain to know how many to produce.   Miss Spetsnaz is a good example.  To the best of my knowledge, she hasn’t appeared in a movie, television series, anime, video game, comic book, manga or light novel.  She’s just a hot girl in a military uniform.  If this hobby has cliches, that would certainly be one of them.

Now look at your market for this figure.   It ranges from collectors that would be just as happy if she was wearing a bikini to military enthusiasts that can tell you every detail that is correct or incorrect about her uniform.   Aside from early trending in preorders, how can anyone know how well the figure is going to sell?  Even then, as others have already pointed out, preorders are only an indication of how well a perfectly executed production version of the prototype is going to sell.  How will the final production version sell?  A sparkle in her eyes that the prototype painter captured beautifully, but was lost in production, could have a material affect on actual sales.  I know that sounds silly, but that’s the market.

Without the built in fanbase that comes with a popular license or the support of mass market retailers, I don’t think there are viable solutions to a lot of these issues.  There just isn’t much of a safety net for toy companies like Very Cool or TBLeague.  They can’t afford to lose big, and that means that there will be times when they miss out on winning big.

I don’t do preorders either, but I’ve found that with most boutique lines, you do have a small window of maybe two weeks to get a figure in the primary market once it’s been released.  As someone that’s just returned to 1/6 after 15 years, I understand the frustration. I see a figure review and think “Oh, man...I want that!”.  However, if it’s been out more than a couple of months, I can usually forget about it.   Paying $100 for a $20 Marvel Legend I missed out on, I can do.  Paying $350 for a $175 TBLeague 1/6 figure I missed out on?  Not so much.  So unless I get lucky and I’m in the right place at the right time with one of these older figures, my collection has to revolve around current and future releases.

All good points, Xavion. It isn’t even entirely about a built-in fan base. According to some inside sources, even the numbers being produced by the mighty Hot Toys (which only does licensed properties, and the most financially successful ones at that), have greatly reduced the overall numbers for each figure. This is a very niche hobby, and with more and more competition for our dollars, not even the major players can compete — though HT still takes the lion’s share of the hobby. Smaller companies (like VC) produce as low as 500 units worldwide (sometimes less). The days of most figures from HT reaching 50,000 units are long gone. Companies have to make a profit to survive, and companies who operate on greed+success are going to take advantage of that. Even TBL is starting to Jack up their prices more and more — why? Because they have essentially cornered the seamless body market the way HT has cornered the actor likeness market. POs in this bizarre hobby are sadly about the only way, as Xavion mentioned to gauge interest, and if we’d rather not PO, we’ll more than likely go back to the days of even worse final product, or less competition and variety overall. A certain amount of fall-off from prototype to product HAS to be expected to a small degree — but to a large extent like that of a company like Star Ace is unacceptable— which is why I never PO anything from them. But sadly, fence-sitting on things is sometimes a bad idea: the recent Asmus Gothmog re-release I put up yesterday is already sold out, as they only went back and produced 100 for worldwide distribution; that’s about 1/5 of their normal production numbers in many cases. If a company producing the only 1/6 scale Lord of the Rings figures only produces so many, how low does anyone think the numbers are for a pretty military girl with absolutely no connection to anything...? The only fence sitting I do now is usually with things I feel comfortable missing out on. The real scam, aside from what I mentioned earlier, is companies allowing resellers/eBay scalpers to buy multiples to then viciously bend customers over for an assault of their wallets. Frankly, they should limit it to One per Person/household type of thing, and scalping wouldn’t be as prevalent.