A simple formula would apply if we were to use some common sense! Take our x-factory cost plus the cost of direct shipping to our consumer and we could retail our products for less than brick-n-mortar.
We are a company entrenched in the way we do business...what our the millennials telling us? They shop online, Walmart is closing stores. Is our ignorance causing us to become IBM? Complacency is killing us!
Common sense should prevail!
What's killing Mattel is that we put utter garbage into packaging and create internal sizzles to convince ourselves that we're giving away gold. We are totally disconnected with the consumer due to cost reductions and way out of touch upper management that would prefer to gossip and spend their days shopping for snazzy clothing than keeping abreast of popular trends or attempting to be disruptive innovators int he toy market. When people like SL laud the Fast & Furious line as innovative racing sets unlike anything ever seen before we all do a communal eye roll and start asking HK the cost of casting the hot wheels tracks black. It's all a joke and the good ol' days weren't as good as you'd think because if they were, they'd till be here.
Um, Junior - please don't try to talk to the grown-ups with your simplistic and simpleton ideas. Commerce and finances are complicated - not "simple" as you mention. You obviously don't work with any on-line accounts so you have no clue what the actual cost or details of creating a profitable business are.
Stay off this site and maybe go hang out on Sesame Street's website - it suits your mental capacity better.
:)
The testing requirements from Fisher-Price, are 30-40% more than Mattel. There's no call for this and no data to support it - only conjecture and "well, in the old days..." rhetoric. Those testing requirements are visible to you - just ask for the comparison.
So, your sales and marketing genius clearly rises above all...and your vanity is evident...come on, still looking at yourself in the mirror, since your last post.
There are quite a few things that your genius/savant mind has left out:
1.) Don't forget we have one of the most impressive toy portfolios in the industry. That coupled with our history of past excellence, is, in and of its self our biggest promotional asset. So don't get carried away with throwing out inaccurate numbers like 100's of millions of dollars in advertising to drive traffic to our site. Type in mattel.com on goggle and where does it take you. Type in best swing on the market and Fisher-Price is in every top 10 list...etc. What a genius you are...still looking in the mirror I bet?
2.) What, alienate and loose placement from Brick & Mortar? Wait a minute, the last time I checked we were selling our products through Amazon! Careful, looking in the mirror at yourself for to long is causing you to become hypocritical. Also, the last time I checked our business and stock price certainly hasn't benefitted greatly from Brick & Mortar. Our Buyers are some of the most fickle individuals out there, who's subjective opinions about what to or not to list, has cost us countless resource $$$ and time.
3.) Our infrastructure would need to be massive? Really, so what are you afraid of? We are a huge company...that is what we do best, create large infrastructure, because of our size, in order to keep ourselves competitive.
Here is a simple minded thought for your genius mind...so let's keep doing what we've been doing, agreed?
Can you give us examples of this 10x testing?
Since we don't spend 20 to 25% of total cost of the product on testing, how can we save that much if we just meet US standards? Even if we eliminate all testing how would we save that much?
If Walmart and Target have requirements above the US Standards should we just tell them we won't ship product to them?
If the EU, or any individual country has requiremetns above the US Standards should we not ship there?
Should we use facgtories that use child labor, as long as we don't look?
Holy crap! Based on how some of you think you know math makes me wonder if you can balance your checking accounts?
"I see shipping direct to consumer as a way out of this mess. It would allow us the opportunity to produce quality products again. By eliminating the middleman we could afford to put quality back into our products and generate greater profits." this author clearly doesn't have a calculator so don't put them in charge of finance!
Shipping direct to consumer just changes the method of shipping - but the overhead and marketing costs exist in every business - they don't magically disappear with e-commerce. C'mon, you can't BE this naïve!!!!!! It's PI that raises quality standards far above government standards, which then costs more to meet. We have to use specific vendors, who have to document everything that they do more than their own government, then we require 10 times the testing that OUR government requires. This all adds unnecessary cost. Want to get rid of the "middleman"?, then take out the PI group - they are a legacy group created when during a long ago layoff, they weren't eliminated from the Safety group.
You'll save 20-25% of your cost if you go slightly above US standards.
If it's common sense you're looking for, for god's sake, DON'T LOOK IN THE MIRROR! You are clearly naïve and simplistic. In today's market, brick & mortar, still account for over 70% of sales of all goods. While e-commerce is certainly growing in double digits each year, Mattel would fail at a e-commerce only strategy:
1) Sheer traffic to the site - it would cost 100's of millions of $$ to advertise competitively to drive traffic to our site
2) We would alienate and lose major placement at brick & mortar while transitioning which would plummet the stock
3) The infrastructure would need to be massive - AG is only $600M, while all of Mattel is 10 times that
In the end, please do a little research before you shoot you're simple minded vision out to the web, hmmm?
How? Since arriving at FP she has done nothing. HQ is in EA, yet her main office is in NYC. The message she sends is a contradiction on leading by example. She puts down and does nothing to inspire...she is by far the worst leader FP has ever had.
Jean is the best.
AG's sales issues are lack of relevance, Mattel's costing structure, and Jean's leadership/decisions from a year or two ago.
Prior to that AG was on fire!
I always thought AG was lauded for it's success with a DTC catalog channel rather then it's stores. Apparently AG sales are down nearly 20% over the past two years, what gives?
Brick and mortar as a way out of this mess? Have you seen American Girl's sales recently?
Yes Mattel toys have all become crap, due to it's manufacturing cost disadvantage. Our overhead consists of to many over paid executives running a once great company into the ground.
I see shipping direct to consumer as a way out of this mess. It would allow us the opportunity to produce quality products again. By eliminating the middleman we could afford to put quality back into our products and generate greater profits.
Well however you sell them, the fact remains is you still need good products that people want. My kids are grown out of MATTEL stuff but I was in the toy store the other day buying some gifts and was kind of struck by how cheesy and cheap all the product is. All the Barbies look atrocious with cheap faces and fabrics, weird hair and bad packaging. All the other stuff is cheap plasticky not very well made crap. . And even Fisher-Price which used to be a premium brand is now low quality. Also are there any toys anymore that don't sing or dance talk back at you at every turn? I thought we were supposed to be inspiring imagination. Instead we have shelves of one trick pony "watch me" toys which are amusing for about 3 minutes.
The analogy with IBM is in regard to them walking away from desktop computing...their market cap could've been twice what it is today! Relevance is the key...not the ignorance that is Mattel. SMDH2X.
Mattel is not a retailer.
IBM, a company with a market cap around 150 billion dollars. Generally regarded as one of the most (in the top five, top ten depending on who you ask) valuable brands in the world. Must suck to be them. SMDH.