Small Scale Military Headquarters

If I'm reading between the lines correctly, it looks like Corgi's price fixing policy requiring dealers to sell at retail has hit a bump.

http://www.badcataviation.com/prdiai.html

I like this move by BC. Next Corgi will be telling the retail outlets which planes and tanks they will send them or set minimum order quantities.

Mark

I think it is a good move also. It doesn't bode well for Corgi.
Todd

I'm sure it's just a small dent for Corgi.

Your right FootBall. Let's go kick their dog and pull up all their shrubs!

Mark

Hi Everyone,

I hate to tell you guys this and bust on your parade, but most companies do set minimum order quanities and do have some say as to what price to charge for their products. This is nothing new being done by Corgi though it may be something new for the hobby/collectible world.

I know from talking with upper management in the grocery store I still work at as a second job that when they sit down with producers, price is one of the key points in the discussion. Usually the company wants to sell the good to a store for a certain price, and likewise then the store decides what price to sell it at. Some companies support sales and promotions, and I was even shocked to know that our company actually gets in contact with the prodcing companies to ok discounts, sale items, etc. It's also why you see certain items never have coupons while some do, it's all what the company decides, sometimes in conjunction with the retailer and sometimes not.

What happened here I think was that Corgi obiviously was concerned that profit margins were shrinking because of internet deals, hobby deals, etc. They have a right to be concerned. Many companies refuse for example to support discounts because the profit margins are already low. There was a recent article about diapers of all things and how the profits for diaper companies are shrinking due to increase in costs, yet, retailers like Target and Walmart sell them at such a low cost. So it does have an affect on the prodcuer of a product. Corgi was obiviously concerned about that.

Corgi is a high end, collectible producer. Their items are not available everywhere in the world. They depend on the sales of their product at correct market price to make a profit and cover their own cost. I also think the interest in the hobby is growing, and they are being hit with demand. I don't think Corgi did this to offend it's retailers, but to keep their prices in check.

BC has a point, and I can see where this move would anger some retailers who have sold Corgi cheaper than retail in the past. What Corgi should have done is had a suggested retail range, and told the dealers to sell somewhere in the range. That way the dealers could sell low range or on the high side, and not be forced into a price.

I don't think any of this will affect anyone greatly, there will still be deals to be had on Corgi if you know where to find it and both BC and Corgi are good retaliers/prodcuers, they will stay in business

Wow, I'm really impressed with BC making a call like that. Now that takes a pair to boycott a popular product. Cudos!

-Ski

Corgi's list price is always 100+% over cost which is ridiculous. They try to force dealers to sell at this price because the marketplace won't hold up to that kind of price for a mediocre product.

OnWu,

A lot of companies have markups of over 100% their cost to make something. Take for example McDonalds, what is a Big Mac sandwhich now. I think around here it is like $3.25 or something like that. Not sure though. Did you know though that it costs the company only 15-20 cents to make that Big Mac. Even when they have specials, they are still turning a huge overhead in terms of profits versus cost. S Corgi is not the only company milking profits from their products.

As for Corgi offering a mediocre product, I would say some are and some aren't. I have been very impressed with the Corgi 1/32 models, as they are metal and offer so many moving parts and detail. Everyone I have ever gotten has been excellent. Also some of their smaller collections are nice, I got the fire engine set and the 100 years of flight set for friends and they loved them. I can't comment on the 1/72 scale stuff nor the tactical strike stuff as I don't buy it. But I give Corgi credit, they are able to keep toy shelf space at these stores and be a collectible company. That's hard to do these days. Although it might have to do with the fact they are generally small scaled products, not 1/18 like 21st and BBi.

BC has some guts to do what they did, but really who does it benefit. I'm sure Corgi could care less, and other online outfits are going to continue to stock the Corgi stuff or list it on ebay. BC will defintely loose that sector of their business, but will it hurt them enough to bring it back, who knows.

Bottom line is there are just so many companies out there particularly in small scale. I think they all have to have their own strategies for survival. This is Corgi's plan. I noticed Franklin Mint/Armour does similar things too by only allowing certain dealers access to their models, etc. You gotta do what you gotta do I guess>

Corey wrote:

Take for example McDonalds, what is a Big Mac sandwhich now. I think around here it is like $3.25 or something like that. Not sure though. Did you know though that it costs the company only 15-20 cents to make that Big Mac.

You can't compare food to toys. Food has tremendous amounts of waste and preparation labor that significantly adds to costs.

A lot of companies have markups of over 100% their cost to make something

21st Century XD costs about $42 delivered, are you willing to pay 100% markup? I don't think many would be interested at $84 retail.

Corgi is selling the History Channel line at Wal Mart. Do you suppose WM is going to agree to fix artificially high prices?

BC has some guts to do what they did, but really who does it benefit. I'm sure Corgi could care less, and other online outfits are going to continue to stock the Corgi stuff or list it on ebay. BC will defintely loose that sector of their business, but will it hurt them enough to bring it back, who knows.

Good point

I think they all have to have their own strategies for survival. This is Corgi's plan.

Corgi not only requires it's dealers to fix set prices, but also forces them to have a physical retail store and forbids any dealer to sell on Ebay. Also, Corgi will cancel any dealer who publicly discusses the pricing policy or sells to another dealer they have black listed.

Corgi is a old-fashioned, spoiled company that has traditionally called all the shots and bullied its dealers. With few other alternatives, dealers really had no choice but to comply. With Dragon, Witty, IXO, Matchbox, and a host of others recently on the scene, I think the competition is going to get very tough. Expect to see better products, lower prices and aggressive sales reps from the other companies quickly jumping-in to replace Corgi's burned bridges with their company's superior merchandise.