The ugly truth about licensing and manufacturing
So often I hear and read comments about companies making licensed product, and I can't help but shake my head and think "if they only knew". I've worked in the industry for more then a decade, on both sides of the fence, with one of the nation's largest toy retailers, and as a manufacturer, so I know of what I speak. So gather round while I pull back the curtain a bit for a glimpse of how things work in the industry. I still need to work tomorrow so I need to be discrete in some areas, but I think you will still get my point :
1) Retailers determine the assortment: People are usually surprised when I say this. So, if the biggest retailers say "We want this line, but you need to make a case of 12 have X, X, and X" that is what gets made. The large retailers determine what figures come in a case and how many of each. Popular wisdom is that female characters don't sell well (in the world of boys toys) so there will virtually always be less of the female characters*. Also, the hero or star will always be overpacked. Why? Because most consumers are not completists and they just want the main guy. The large retailers follow sales results for previous or similar lines. Most of the "gut feeling" has been taken out of the equation. So if you have a 3 figure series and one of the figures is a girl, a case of 12 will be 6 hero, 4 secondary character, 2 girl. It could possibly be 5 secondary hero, 1 girl, but retailers like even numbers. (*One large retailer tested this theory in 2001 with disastrous results. They evenly packed a female character with the males and caused not only a glut of that character , but a shortage of the others).
2) Licensors control the look of a product and packaging and advertising: This seems like common sense but most people don't understand it. For licensed product, the licensor who controls the property (the character) controls virtually everything. When you license a property they supply you with a style guide. Sometimes these are very complete, specifying certain Pantone colors and minutia that seems arcane. Other times it can be a few screen shots and a general description. Often it is somewhere in between. One of the problems that vexes the industry is approvals. Depending on the license, you may have to get approval from one individual or dozens. I worked on a license for a video game character where each of the 12 people who worked on the game had a say in the license and the game company also had a say. That meant if one of the 13 individuals wanted to change something (I think that belt buckle should be more rectangular and less square) the other 12 people had to start the review process as well. Likewise, it is not uncommon for a company to disregard their own style guide. I recall a situation a situation where a licensor wanted the heights of characters to be changed, even thought it was clearly different then what their style guide indicated and what everyone knew from watching the property. This resulted in many upsets fans complaining that the scale was off. Vanity also plays a role when there are likeness rights. I know of several cases where actors and actresses had their faces and bodies scanned and then refused to approve things until cosmetic changes were made. Guts thinned, muscles enlarged, heights changed, noses fixed, boobs lifted, until they product looked almost unrecognizable. One famous musical group is especially well known for their difficulty in licensing issues. They only meet once a year to review products. So any changes require a one year wait. As a result, products can often be delayed endlessly.
3) Licensors don't always inform you of changes: This applies mostly to things that are themselves in production as the collectibles are. You can spend months getting a sculpt to perfectly match the shots you have been given of a CGI figure and have them approved, only to learn, once the items have been produced, that the look has been changed and your product no longer matches what will be on screen or in a game.
4) Sometimes style guides are wrong: It isn't uncommon for style guides to indicate an incorrect color or size for an item. Sometimes if you can show proof that the guide is wrong they will let you change it, other times the answer is "follow the guide". Can you argue the point? Sure, but can you afford to delay your product? If you need it to be in stores for September/October (when retailers take delivery for X-mas merchandise) and arguing over the color of a ray gun will cause you to miss the window and delay the product by a year, when it may lose its relevance, it might be better to simply concede to their wishes and produce an item that you know to be wrong.
5) Characters, especially animated or CGI ones may not be consistent: People often assume that animated characters are easy to produce as toys and collectibles. In fact, the opposite is true. Animators often "cheat" and the way they look in an animated turn around is not how that character would look in 3 dimensions. This often causes one to look for the happy middle ground where something looks mostly right, or right from a specific angle.
6) Double license means double fees; Sometimes one company controls a specific character, but another company controls the actor or actress that portrayed that character. This means that to produce a likeness of that character as that actor portrayed him would cost you more than producing a representation of the character alone. Generally licensing fees are 10% of wholesale price, so adding a second layer increases costs by 10% plus complicates the approval process plus adds to the retail cost. Generally, retail has a 100% markup. They buy it for $1 and sell it for $2. Let's use a $4.50 wholesale item as the example. The retail would be $9. Add a 10% increase to the $4.50 and it now has a wholesale of $4.95 and the retail becomes $9.90 or $10. Now one must ask, do the retailers care? More often than not retailers care about the character, not the actor. If they can save $ .45 per figure they want to do it. (Note, I have simplified things here for the example).
I've gone on a bit more than I expected to. If you find this interesting I'll try to post more.
All very good points, though I'm not so sure the first one is applicable to all companies. I know for a fact that Mattel's WWE team does control its case breakdown (hence the glut of Cena and Orton figures, which they said they will correct in future releases).
This was very enlightening. Thank you for sharing!
I'm glad you posted this I have been thinking of going into this field with my art.
I found this fascinating, and really made me understand things more. Thanks for posting. I'd love to hear more if you have it!
Not sure if you can say, but I'm pretty curious who the difficult band is..lol
My guess is KISS.
I have to be discrete and cannot name names.
Very interesting. Lots of things to consider.
It certainly explains why the Diamond Select Bride of Frankenstein figure was so hard for me to find!