The Motor Pool- Opines of the Day

[lightning2000]

<b>Coverage of 2008 American International Toy Fair</b><p>
<img src="http://www.themotorpool.net/v/vspfiles/images/Toy Fair 2008 Logo.jpg" align="left"> <b>Toy Fair 2008: A Brave New World</b><br>
Now that 2007 is coming to a close, we're already setting our sites on 2008 and what the new year will bring as far as military diecast goes. While we're on the subject, we'll be attending the American International Toy Fair, which is held in our backyard of New York City, and scheduled to throw open its doors on February 17th. As in past years, not all of the manufacturers we deal with will be in attendance, so we'll just have to stay in touch with them to see what they have on the drawing board. In the meantime, we've begun setting up our show coverage page and will start posting imagery, text and comments as soon as they're passed along.

Until then, we want to wish everyone a joyous and prosperous New Year and thank you for your continued support and patronage....

<b>Opening Salvoes</b><br>
With two months to go before the American International Toy Fair throws opens its doors, we thought it might be prudent to address three vexing topics that will likely take center stage in the coming year: product composition, product pricing and SKUs. As you are no doubt already aware, the rising price of non-renewable commodities like oil and zinc plays havoc with the diecast industry, particularly in the Orient where most products are made nowadays. Petroleum-based products have been increasing in cost the last few years, which, in turn, has a dramatic impact on the products we purchase, their packaging, and transport. Likewise zinc alloy, the basic building block of most diecast products, has been rising in cost, along with the escalating cost of labor in the Far East, as factories do their utmost to keep skilled labor under their employ. Some model makers have attempted to address these issues by either stripping out most of the metal that goes into their products or passing along these costs to the end users. Unfortunately, there comes a point at which end users balk, protesting about the lack of heft in their models or the number of dollars they must fork over to obtain each piece.

Secondly, we face the rising tide of stockkeeping units (SKUs) coming to market. When we first started out eight years ago, weeks would go by before a new product was announced by the handful of players in the diecast military business. Today, it seems like we're adding about a dozen or so new items daily to our site, which is both good and bad for the average collector. More SKUs means more choices for the average collector, who can now pick and choose between different features, liveries and even model makers for their favorite choices. On the flip side, stocking more SKUs requires more room for the average dealer, not to mention added cost and labor. With talk of recession looming, it may mean that some dealers will be cutting back on the number of pieces they keep on hand, restocking inventory when supplies run out. As you might have guessed, this type of practice has a domino effect on the rest of the industry, as they, in turn, attempt to keep on hand only enough product to meet the immediate demands of their clientele.

While this opine is certainly short and to the point, the fact remains that the coming year may prove to be very pivotal for the diecast industry, as everyone attempts to grapple with rising costs and competition amidst some economic turmoil. Certainly things are looking particularly bright in a number of areas, however, innumerable pressures are now being brought to bear which could have a telling effect on the market as we now see it...

<b>First Mover Advantage</b><br>
As we alluded to earlier, there was a time when we literally could count the days and sometimes weeks before a new product was announced. Not so anymore. In today's diecast military market, there doesnt seem to be a shortage of makers and shakers all-too-eager to fill the niches and voids left by other manufacturers. Initially, most companies enter the fray pumping out the usual suspects of small arms: Tigers, Shermans, T-34s and Panthers on the ground, P-51s, Spitfires, and Bf 109s in the air. Once they realize these very same pieces of hardware have been replicated to death by other companies, they eventually learn the error of their ways and move on to other weapons platforms that might prove more lucrative.

At first blush, this paradigm shift is certainly welcome news for the collector, who, in many cases, may have been waiting years for their favorites pieces of miniaturized hardware to come out. Unfortunately, it also create an atmosphere where a "first mover" advantage sets in, whereby the first company to market usually reaps the greatest rewards even if their product may not live up to expectations. As a result, other manufacturers oftentimes get cold feet releasing a similar item, fearful that their replica wont sell as well since it was already modeled by one of their competitors. Thus far, there have been plenty of instances where a company has announced a new item, only to cancel it outright before the mold was poured once they learned another company was planning on doing the same subject.

Going forward, it will be interesting to see if this trend continues, as the cost of manufacturing rises and the number of players dabbling in the military market picks up a head of steam.

Agree or Disagree?

Lightning2000
www.themotorpool.net

[Col.Pickle]

wow fantastic, lightning. Very thought provoking, I had really no idea the depth of all the problems manufacturers are now facing.

[Rowsdower]

I'm thrilled by the increasing variety of the market, frustrated by the difficulty in obtaining pieces locally.

That right there is exactly how I feel as well. I also agree with the rest of your post.