Why Do Mass Market Retailers Run Such Aggressive Price Promotions On Toys & Games?

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It’s a recurring annual event in the Toy & Game business to see almost ludicrous price promotions from generalist Mass Market retailers offering products at substantial, and presumably not particularly profitable promotional prices. This represents a big problem for specialist Toy & Game retailers who stock our products year-round and who tend to run a much broader range than the Mass Market box shifters.

Not a lot changes in this space though – I still remember my original inductions in the Toy business back around the turn of the millennium. After going around some of the ‘fluffier’ departments I especially remember being sent along to the UK Sales department. I can’t remember which grizzly Sales veteran was given the pleasure of sharing some grim realities from the sharp end of the business with me, but I can remember really well him telling me that price promotions in the run up to Christmas created ‘a complete f#@ing bloodbath’ every year.

The next part of my induction was to go and meet with colleagues in the French subsidiary. Again, after some nice fluffy talks about Brand pyramids and messaging hierarchy for TV commercials, I was sent out to visit French retail with the Sales team. First, we looked round some really good specialist Toy stores, and then we went to Carrefour. My colleagues explained to me the significant price reductions run by the Hypermarche in Q4 each year, which seemed somewhat excessive even to my greenhorn eyes!

Finally I was hooked up with a US colleague, who after talking me through the workings of Toys R Us (!) and then KB Toys (!), explained to me the pricing strategy of Mass Market behemoths like Walmart. Again he explained how the aggressive pricing of Toys by this type of generalist retailer caused real problems with the Toy Specialist retailers during Q4, when the Specialists who need to make a profit from selling Toys came up against these massive price slashing retail machines who it looked like did not care about profitable sales of Toys.

In c. 25 years, the situation relating to retail pricing has not changed that much in this regard. OK, we have Amazon as a major player in the market now, but if anything their impact is also to cause downward pressure on retail pricing, so the rise and rise of Amazon has hardly decreased competitive pricing pressures.

WHY MASS MARKET RETAILERS CAN SELL TOYS AT A LOWER PRICE VERSUS TOY SPECIALISTS

There are two straightforward reasons why Mass Market retailers can sell Toys with big price discounts and still stay in business:

1.     Bulk sales & efficiencies of scale working at lower margins

Firstly, volume is a big factor in driving pricing strategies for Retailers. Mass Market retailers are set up to move high volumes of products and to make a comparatively smaller margin on each product sold. In other words this type of Retailer is fundamentally set up to drive prices down in order to drive volume. We’ve all heard of price elasticity right? If the price goes down, normally sales volume can be expected to go up.

The other factor to consider is that many of the other categories these Retailers operate in have lower volume structures i.e. Food & other FMCG would normally offer lower retail margin versus Toys, as such inherently these Retailers can make lower pricing work because they are set up to deliver the bulk of their sales volumes on lower margin categories versus  a Toy store which would normally operate on 30-50% depending on their strategy.

2.    Toys & Games as a traffic driver at Christmas

One of the other key metrics Mass Market Retailers work off is total basket value i.e. how much does the customer spend per visit. They are also looking at how bringing in consumers into store with an offer on one product category nearly always leads to sales in other categories. As per the previous article in this newsletter – footfall is the critical success factor for physical Retail. Overall then these Mass Market Retailers often use the Toy category as a means to drive traffic into store by delivering highly motivating promotions and pricing reductions on Toys. This way they entice more shoppers into store who then buy other products and thus drive up the total basket value, delivering more volume for these volume driven retailers.

The bottom line is this – Mass Market Retailers often don’t look at their Toys & Games aisles as profit drivers. Parents feel that they HAVE to deliver a good Christmas for their kids, which will normally involve Toys. The food shopping for peak season family gatherings and set piece meals such as Thanksgiving and Christmas dinners are also a massive volume driver, and if you can get the family budget holder in to store to buy price reduced Toys you are much more likely to capture their Grocery spend, and their spend across other categories.

REALITY CHECK: WHY DOWNWARD RETAIL PRESSURE ON PRICING IS A GOOD THING FOR THE TOY BUSINESS

So now we have a clear idea that aggressive price promotions are a long-term structural challenge we need to manage on an ongoing basis. The bottom line is that we are in the business of selling more products, and the lower pricing gets the more we will sell. We may not want to fund a cycle of ever lower pricing as then we end up failing to make profit, but if we are selling our products on relatively equal terms to all Retailers, then what they choose to sell those products for is actually their business. If they want to sell them at cost, or even less, then that is up to them. In fact in many markets it’s considered illegal (against competition and consumer protection laws) to even suggest what retail price might be.

I remember managing an iconic Toy brand some years back, and the trade margin offered at the (suggested) Retail price was minimal, because this was one of those products the Retailers just had to stock, that they knew would sell through and which we therefore had to make the least effort/use the least persuasion to maintain listings. Our customers regularly sold this item at cost or below, and for sure they complained like heck about the low margin they were making on the product, but in the end that was their concern. Despite ongoing rumblings the same promotional pricing ‘bloodbath’ repeated on this iconic product year after year. And year after year, it remained a top seller and was the Number 1 margin driver across our entire product range for our company.

So the bottom line here is that while it’s often very difficult to deal with hysterical Retailers who are seeing cutthroat pricing from their competitors, this is just part of the game that they have chosen to play. It’s normally not our fault as Toy companies.

HOW TOY COMPANIES SHOULD SUPPORT TOY SPECIALISTS IN THE FACE OF TOY PRICING PRESSURES WITHOUT ENCOURAGING ANTI-COMPETITIVE FACTORS

Now, having made it clear that pricing promotions are inevitable, the next question is how should we manage that situation so that our Specialist Toy & Game Retailers who are committed to our industry and support a much broader range of products, and who really know and love the products and therefore help the consumer to know and love our brands and products, can also thrive even when they can’t dream of competing with Mass Market price promotions.

Let’s start with one clear assertion: Specialist Retailers need to stock the really ‘Hot’ items which every kid wants, otherwise they don’t become THE destination for Toys. But the reality is that they either a). Won’t sell through those products so well if they don’t compete on price or b). Won’t make any profit if they do compete on price. So while they need to stock these items to be a must visit destination for Toys, the reality is that they will make their money elsewhere, and Toy companies have to work really hard to help them do that.

This goes back to the point made earlier on these Retailers running a bigger range vs. Mass Market Retailers. A sound strategic approach for Toy companies to take is to plan a range which offers several SKUs which will favour Toy Specialists due to specification, price points and product style/type. If we go back to the example I used above of the iconic Toy product Retailers had to list, we would produce various higher spec and therefore higher priced versions of this product in order to offer an item to the market which would suit Specialist Retailers.

So for sure our Toy Specialist customers are not going to enjoy some of the range they have to stock, but if we structure our product ranges properly then we should be offering them plenty of products with which they can find less low end of the market price competition and perhaps even some items with channel or Retailer exclusivity.

The one thing I can guarantee on this topic is that Q4 price drops are going to be with us for as long as Mass Market Retailers stock Toys, and I genuinely hope that is forever, because we couldn’t run this business just on our beloved Toy Specialists, but we also couldn’t run it with just the Mass Market, so we need to work to supply products to fit all needs.

N.B. All trademarks and other intellectual property featured herein are the property of their respective owners.

SPIELWARENMESSE – SPIRIT OF PLAY BLOG

5 TIPS FOR AN OPTIMAL RESULT AT THE SPIELWARENMESSE

This article was recently published by Spielwarenmesse.de, the official Blog of the world’s biggest Toy Trade show. It’s my top 5 tips to maximise your results from attending Spielwarenmesse in Nuremberg.

https://www.spielwarenmesse.de/en/mag/magazine/5-tips-for-an-optimal-result-at-the-spielwarenmesse/ 

PLAYING AT BUSINESS PODCAST

EP 103 – Why Product Selection Is Critical For Toy & Game Companies (AKA Why I Turned Down Settlers Of Catan)

Among my many claims to infamy in this industry, one of my biggest misses when taken at face value would be the time I turned down the distribution rights for now perennial classic 'gateway game' Settlers of Catan. This mightiest of Games has now sold over 40 million copies, yet I was right to turn it down...because product selection is everything for Toy & Game companies. Click the link below to here more.

https://playingatbusiness.libsyn.com/why-product-selection-is-critical-for-toy-companies-aka-why-i-turned-down-settlers-of-catan 

AND FINALLY…

I’m now well into my second decade working as a Consultant to Toy & Games companies. My company has helped hundreds of clients across the trade. Do you have problems that could benefit from outside help? If you want to take advantage of my c. 25 years experience working across functions, categories and markets in the Toy & Games business just click here for more information on how you can work with me:

https://www.toyindustryjournal.com/toy-business-consultancy

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The Massive Volume Driving Potential Of Off Shelf Placement In Toy Retail

The Massive Volume Driving Potential Of Off Shelf Placement In Toy Retail

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This newsletter instalment follows a recent edition where we looked at 3 ‘old skool’ retail concepts which are still critical to success in Toy retail today. If you haven’t read that instalment, you can read it here: https://www.linkedin.com/pulse/23toy-retail-three-old-school-fundamental-practises-which-steve-reece?lipi=urn%3Ali%3Apage%3Ad_flagship3_series_entity%3BDc5KsoZzTvOrE6RgD5camg%3D%3D

In fairness that article tended to favour Specialist Toy retail, and so I wanted to follow up with a look at off shelf placement which on the right brands and products can be a ridiculously powerful sales driver for Toy companies in Mass Market retail.

FOOTFALL: THE LIFEBLOOD OF PHYSICAL RETAIL

You will have seen really good retail stores who flounder and fail because their location (perhaps just tucked round a corner, or just off the main drag) denies them access to the same number of passing eyeballs as their weaker competitor located in a better place. Footfall is everything for physical retail. The same applies within a store – if your products are tucked away in a distant rarely visited corner, or on a higher or lower floor than the access level which gets far less ‘traffic’ you are going to sell less in that store than you might if your placement was higher prominence in a location where more people see your stuff.

What normally happens in mass market retail stores is that products are very carefully and strategically planogrammed, so that the in-store people often don’t get a big say in what happens on shelf in each department or product category area. However, they do sometimes have a bit more leeway with the space closer to where you enter the store and around the checkouts. Good retailers plan big national initiatives, but also allow some flexibility for stores to give a bigger push on products which suit their specific local consumer base best. So to get good placement away from the shelf it can help to work both angles – work with the head office team, but also where it’s allowed by the retailer offer to help merchandise on a store-by-store basis to maximise your placement & sales.

FORMAL OFF SHELF PLACEMENT

There are two examples of formal off shelf placement I remember clearly from the early days of my career:

Firstly, way back in the 1990s I worked for a discount retailer who ran a fortnightly promotion via a magazine packed full of special ‘once it’s gone, it’s gone’ deals. This was a massive traffic driver for the store, and needless to say while the special offer items normally sold out quickly & offered great value for customers, nearly everyone buying one of those items would buy multiple other products (normally delivering higher margin for the retailer) from the store.

The special deal products were stacked on pallets at the point of entry to the store, giving shoppers the highest visibility and ease of locating the products on special offer. Needless to say these items drove the highest volumes while stocks lasted.

The second example I remember was the massive success the Irish team had at a corporate Toy company I worked with. The talented and tenacious sales team in the Emerald Isle would not take no for an answer and persuaded a major grocer to take a seemingly imprudent quantity of stock on key iconic Toy brands on pallets in the run up to Christmas. The heavily laden pallets soon began to look decimated and for a relatively modest trade marketing/promotional spend vast quantities of products sold through retail. When the program was implemented across the same retailers UK stores the results were genuinely impressive. Needless to say soon after EVERY Toy co wanted that pallet space & the terms of securing the pallet deal became less and less commercially viable as a result as the competition became heavy, but nevertheless as a pure sales driver the pallet program was ridiculously successful.

INFORMAL OFF SHELF PLACEMENT

One of the most successful off shelf placements I encountered happened entirely randomly. I was managing a major new product range initiative which incorporated home entertainment elements. This was in the heyday of Blockbuster, home entertainment via video & DVD, CD’s and all of that pre-download stuff. My boss was particularly keen to push our new products out of our usual Toy focused distribution into home entertainment distribution channels to a). Grow distribution for other entertainment based licensed products we had in the range and b). To hit the right consumer in the right frame of mind for our new products.

The challenge we faced though is that Home Entertainment retail at that time had two basic product sizes – CD or DVD, and that was pretty much it. And despite the Buyers liking the concept of our new products they found the thought of having to work out where and how to merchandise a product that was 5 times bigger than their usual product ranges to be too difficult to entertain among all the other tasks and challenges they were facing. Our products appeared to be in the ‘attractive but too difficult’ box for them.

Eventually we persuaded them to place a trial order for one box (!) for their flagship, highest footfall store. That single carton of products sold out in about 5 minutes, so they called and asked for 5,000 units to be delivered asap, and so we duly obliged. The product arrived with them on the Thursday and on the Monday, the now desperate Buyer asked us to ship them 50,000 units asap, which we sadly couldn’t fulfil as the product was now our best-selling item, a hit across retail and a sell-out success. For those in the U.S.A. these volumes won’t sound big, but in the market I was working in they would be equivalent to ten to twenty times the stated volumes in the U.S.

The point of this story is not how successful the products were, or how retailers should commit to inventory on hot lines earlier than they do – no, the point was how the products were merchandised. Because the products didn’t fit on any shelving or racking the stores had, they were instead loose stacked on the floor around the checkout queues in stores that were packed on the run in to Christmas. In some stores, 10 checkout stations were fully open and 100 or more people were queuing. Every few minutes another 100 people would walk past our products and many chose to buy, then when the stacks got smaller the law of scarcity kicked in & the sell rate went through the roof until there was no inventory left at all.

Our product was a huge success exactly because they didn’t have space on shelf to merchandise. That one finding increased peak season revenues by nearly 10% across that retailer nationally, because they began to use impulse purchase cues by literally stacking entertainment merchandise all around people queuing to buy home entertainment products. I wouldn’t go so far as to say we found ‘Kidults’ earlier than has been reported due to this action, but it does go to show how breaking out of the standard methods of merchandising can be highly effective!

CLEAR RETURN ON INVESTMENT VIA OFF SHELF INITIATIVES 

As a trained blue chip marketer I shouldn’t say what I am about to say, but reality speaks for itself: If I had the choice on whether to spend a £/$/€ on consumer marketing with no direct selling offer, OR could instead spend the same amount on trade marketing with a focus on bringing the product off shelf and to higher in store prominence I would do the latter 99 times out of 100.

Like many marketers reading this, I have wasted a lot of money on marketing where there was no clear evidence of ROI!  My career marketing spend is in the vicinity of £50m (many of my corporate colleagues have spent many times more than this, but I moved to work with smaller up & coming companies years back and have thus wasted far less than many of my peers!). I can try to justify my effectiveness by stating career revenues of products I worked on being in excess of £500m…but I can’t tell you how much of that £500m would have been realised if you removed the £50m marketing spend, we will never know whether we would have delivered similar levels of revenues without chucking £50m into the ether…

On the flip side, I can clearly see from sales uplift across the board that whenever teams I worked on invested the money into merchandising initiatives at the point of sale, and where the retailer actually implemented or let us implement what we paid for, then pay back was clear and justifiable 9 times out of 10.

We of course need to acknowledge that today a large proportion of sales happen via online channels, and so digital marketing can be a strong direct sales driver in a way which the old TV advertising model wasn’t really provable to be in terms of tangible, clearly measurable and attributable payback. But while we still look at physical stores as a major chunk of revenues, then investing in in-store merchandising and specifically off-shelf initiatives should always be a priority.

 N.B. All trademarks and other intellectual property featured herein are the property of their respective owners.

SPIELWARENMESSE – SPIRIT OF PLAY BLOG

THE GROWING ‘KIDULT’ OPPORTUNITY

Here’s to Adults growing older later! The Kidult market is a major thing right now, offering significant growth opportunities for Toy & Games companies despite the fact that birth rates are dropping in most major markets. Read more in this latest article I wrote published by the Spirit Of Play Blog, which is published by Spielwarenmesse, the world’s biggest Toy trade show. Click the link below to read the full article:

https://www.spielwarenmesse.de/en/mag/lifes-a-playground/the-growing-kidult-opportunity/

Also here’s a short video excerpt from my presentation at Spielwarenmesse’s Toy Business Forum in 2023 looking at the potential impact of the ‘Kidult’ phenomenon on the future of the Toy business: https://www.youtube.com/watch?v=hE2ZERGW7nc&t=26s

UNCHANGING PLAY FUNDAMENTALS

So often in the world of Toys we look for the big changes, we go trend spotting to find new things to jump on. The reality though is that far more doesn’t change than does. That’s what this latest article I wrote, published by Spielwarenmesse.de looks at. Just click the link below to read:

https://www.spielwarenmesse.de/en/mag/toy-lab/unchanging-play-fundamentals/ 

PLAYING AT BUSINESS PODCAST

EP 102 - Selling A Toy Business: How Mergers & Acquisitions Work In The Toy Biz

Many companies in the Toy business grow via acquisition. Company owners often want to sell up and retire or move onto other pastures. In this episode we take a look at some of the biggest Toy acquisitions of all time, we look at why and how Toy Cos are bought and sold and we discuss the details of the process of buying or selling.

Maybe you have a Toy business you want to buy or sell, or maybe you just want to understand how company sales work in the world of Toys, either way this episode will have something for you.

https://playingatbusiness.libsyn.com/ep-102-selling-a-toy-business-how-mergers-acquisitions-work-in-the-toy-biz

EP 101 - How To Run A Successful Tech Toy Start Up With HoloToyz

In this latest episode host Steve Reece talks to Kate Scott & Declan Fahy, the Founders of HoloToyz. Their company aims to inspire creativity and imagination via augmented reality technology.

Kate stated "At our core, we believe that children should be able to experiment, play and learn through emerging technologies in a kid-safe environment away from the open web, whilst not losing touch with the physical world."

We discuss this proposition, and the path from starting the business, through raising funding to achieving distribution for HoloToyz products. 

This episode is a must listen for anyone interested in or actively pursuing a start up in the Toy business, as well as international distributors looking for new products and new stories to latch onto.

https://playingatbusiness.libsyn.com/ep-101-how-to-run-a-successful-tech-toy-start-up-with-holotoyz

EP 100 – How To Recruit Good People And Find New Job Roles In The Toy Business

Join host Steve Reece in a deep dive into the toy industry's recruitment nuances. Having helped many people to find new roles in the Toy business and having advised many Toy companies on who & how to recruit, Steve unveils key strategies for companies to recruit effectively and tips for candidates to land their ideal roles. Whether you're hiring or job-hunting, discover invaluable insights to assist your recruitment/job search process.

https://playingatbusiness.libsyn.com/ep-100-how-to-recruit-good-people-find-new-job-roles-in-the-toy-business

AND FINALLY…

Can we help your business? Do you want to grow your export sales, prep to offer your business for acquisition, find senior staff or maximise your sourcing efficiencies? If you want to find out more about our Toy & Game business consultancy services, please just click the link below. Our company has helped hundreds of Toy & Game companies to get ahead and grow sales/make more profit. I have worked on all product categories across a 25-year career in Toys & Games, and genuinely love sharing knowledge, contacts and facilitating greater success for our clients.

Here’s a profile of some recent projects:

·       Helped several Asian Toy companies to grow distribution in ‘Western’ markets & to recruit key staff to build distribution with new retail accounts opened up.

·       Advised multiple Amazon vendors on accessing traditional/offline distribution channels with various distribution deals signed across North America, Europe & Asia.

·       Toured a leading U.S. company around India’s leading Toy factories leading to factory selection, production start & significant cost savings.

·       Advised a leading Toy industry association on trends and data related to Toy Sourcing.

·       Advised the board of a leading factory group on sales trends and best practise in the Toy business.

 For more information on our services, click here: 

https://www.toyindustryjournal.com/toy-business-consultancy

Sign up for my free e-newsletter and receive all the latest reports, analysis and insights on the Toy & Games business: sign up for free here: https://forms.aweber.com/form/54/1325077854.htm

Why Product Selection Is Critical For Toy Companies (AKA Why I Turned Down Settlers of Catan)

Ep 103: Why Product Selection Is Critical For Toy Companies (AKA Why I Turned Down Settlers of Catan)

This is the script used for recording Episode 103 of our PLAYING AT BUSINESS podcast. If you prefer to listen to the podcast instead of reading it, you can just click here: https://playingatbusiness.libsyn.com/why-product-selection-is-critical-for-toy-companies-aka-why-i-turned-down-settlers-of-catan

· Hello and welcome to Episode 103 of the Playing at Business podcast.

· I’m your host Steve Reece

· For today’s podcast We’re going to take a look at Product Selection and why the process of selecting your product ranges is the fundamental backbone of your company’s success in a product driven business like the Toy & Games industry!

· Before getting into that, just a couple of up-front bits and bobs:

1. I recently began a series of Linked In Newsletters offering long form report style analysis & commentary on the Global toy & game business – just search on Linked In for Steve Reece toys or Toy Industry Journal Newsletter & you should find the newsletter. Please feel free also to send me a Linked In connection request, and then you should see everything I post on Linked In in your feed (algorithm allowing!). At the time of recording we have 27 editions of that newsletter you can check out, and with around 5,000 subscribers from across the Toy & Games business this is a Free resource you would be crazy not to tap into!

· Now a quick plug for our Consultancy business services:

1. Did you know that I have helped many companies review their Sourcing strategy & find new factories in new geographies, especially outside China in India & other places? For more info check out www.ToyTeamAsia.com

2. Do you want to increase your Toy export sales? We help companies grow their Export sales, over my career I have $hundreds of millions of Toy sales under my belt. I have to tell you though that sometimes I start helping a company & get almost instant success, but sometimes I get tumbleweed by way of feedback – some products are harder to sell than others. The difference with what I do is that if you work with a commission based sales rep they just move onto other products which will sell more easily, my approach as a Consultant on a retainer is to help the company understand why their products are not selling & how they can improve the sales proposition. To find out more about these services, just go to www.KidsBrandInsight.com/services

3. Thirdly & finally in terms of our services alongside helping companies with their export sales we also work as head-hunters or recruitment consultants to help you find the right senior people to power your growth. As we speak I am finalising recruitment for a major Asian company for a senior international role. For more details just get in touch!

· Anyway, that’s quite enough up front rambling, let’s get into the topic of today’s podcast:

PODCAST MAIN TOPIC – Why Product Selection Based On Company Self-Awareness Is Critical For Toy Companies (AKA Why I Turned Down Settlers of Catan)

· OK, so I’m going to start here in the obvious place which is to talk you through the main anecdote in the title of this podcast – how I came to turn down one of the best-selling board games of the last 30 years in Settlers of Catan.

· Before I do that though, just understand that anyone who has been in the business of Toys & Games long enough has turned down something that went on to be a big success elsewhere – if you meet someone who has been doing this stuff for decades & they say they have never turned down anything that went on to be a hit, then they have either not achieved very much or they are not being entirely truthful. This is a hit & miss industry we work in, and what works & what doesn’t can be unpredictable – over time I have seen numerous concepts which were more or less the same launch with varying degrees of success from total failure to massive success, all on the same concept executed somewhat differently into a market at a particular stage and time.

· One of my bosses of the past once turned down the UK rights to the TV gameshow Who Wants To Be A Millionaire board game which went on to sell millions of units and broke all kinds of records for commercial success! I’m not mentioning his name, but he knows who he is since he told me that story himself!

· So anyway that’s enough self-justification – here’s why I how & why I turned down Settlers of Catan, which according to the official website has now sold more than 40 million copies.

· One of the creative team at a company I worked with brought me the game – which by that stage was a major hit in Germany and said the distribution/licensing rights were available for a couple of territories I looked after.

· While I personally knew the game was great & would most likely be a success for someone out there, the question was could it be a success for the company I was managing this portfolio for.

· And the answer to that question at that time was NO, the financials didn’t work based on the financial parameters we had to work on in that company, the specialist distribution and niche marketing required to make the game work were not capabilities my company had at that point in time AND perhaps most importantly, I was already managing a portfolio of very established & highly successful Games which were already more brands and products than we could realistically get listed in enough retailers to fully exploit the opportunities.

· So I turned down the iconic ‘gateway game’ that is Settlers of Catan, with best wishes and with a genuine expression of my desire for it to be massively successful for those who owned and managed it at the time.

· At a different point in time, the company I was working with may have been the perfect partner for that game, but not at the time we made the decision to pass.

· So in essence we made the right decision despite the success the game has achieved since.

· Many companies harbour staff who constantly butt up against the restrictions and limitations of the company. If you work for a massive corporation, and you are a born rule breaking entrepreneur who wants to run whacky contentious product initiatives, you probably won’t last long in that big corporation (I am speaking from personal experience here!).

· Similarly, if you are work for a smaller company and can’t handle the uncertainty of a smaller company with less retail clout that lurches from one good year to a bad one the next dependent entirely on the listing decisions of a limited number of retail buyers you are probably going to struggle to be happy at that place of work.

· Product selection is not (primarily) about chasing whims – it is about placing a limited number of educated bets on what your company can successfully execute in the marketplace based on your relative strengths & weaknesses.

· You should take great pride in turning down products which have excellent potential, but not for your company.

· Product selection is about taking the right risks and placing the most prudent bets you can.

· You can still be creative within those parameters but don’t expect miracles from your company.

· Choosing the right risks to take is where success and failure are borne.

· Whatever you do, don’t bet the house on any one initiative, product line or new product. Far more products fail at launch than succeed, so to reiterate a point I make often on this podcast – success is about portfolio management in this game – if you launch 10 things, expect 2 to be big successes (if you are great at what you do), expect 2 to 3 absolute flops which make you embarrassed to get up in the morning, embarrassed to speak to the customers you dols those total dogs of products to and which leave you with a serious inventory problem. Then you can expect the remaining half of the products to do ok and to just about wet their beaks.

· Based on years of cynicism inducing experience of this crazy hit or miss business of ours, the trick is not to over bet on any concept and to play the numbers games to ensure the stats eventually align in your favour.

· Oh, and be ready to turn down something you know will work for a different machine than yours or risk adding to your list of flops!

OUTRO

· So, that’s all we have time for this time, thanks for listening to Episode 103 of The Playing At Business podcast.

· If you like this podcast or enjoyed this episode, please give us a good review or rating on the podcast platform you are listening to, and a reminder again to check out our Blog websites: www.toyindustryjournal.com and www.boardgamebiz.com

· Please share the podcast with your friends and colleagues in the industry and stay tuned for new episodes coming soon!

· If you’re interested to find out more about my work as non-exec Director and board adviser, or how I help Toy & Games companies find Export distribution overseas, just check out www.KidsBrandInsight.com/services

· If you want Consultancy help to boost your business, you can find more details on our work on any of those websites I just mentioned.

· That’s all for now, I’ve been your host Steve Reece, this has been the Playing At Business podcast and we’ll see you next time. Thanks and bye.