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Buying and Merchandising, what happens when a line is going to go out of stock

Discuss vintage Kenner and Palitoy Star Wars toys from the 1977-1985 era.
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Buying and Merchandising, what happens when a line is going to go out of stock

Postby SAVORY100 » Sat Sep 01, 2018 7:50 pm

There is so much concern, suspicion and red flag discussion circulating on SWF.uk, Facebook and other media outlets that I thought I'd chip in with some insights as someone that has spent the last c20 years involved directly in design, manufacture, purchasing and production of goods.

To clarify this, my CV, which I'm happy to share if ever requested has seen me working in the UK retail industry, as well as the UK and Far East manufacturing industry and now, currently running the Buying and Merchandising team for one of Europe's largest tourist / historic properties organisations, so I feel that I can speak with a certain level of authority on how things actually work in the world of designing, manufacturing, buying and supplying items to the UK from the far East as well as across Europe.

I am openly writing this with a high level of concern at the potential destruction of hobby history, as one or a handful of people, who have done what they consider due diligence and some form investigation over as much as 6 months or even a year and made a decision that red flags need raising on certain items. These people are indeed experts in part of what they are saying and the knowledge they have is not in anyway being attempted to be diminished by some facts that I am going to outline, but it will, I hope at least start to have some people that are still open to other opinions, think a step before destroying something suspect and in turn calling it fake.

Here goes...

In the current UK buying world and I'm talking to supply multiple shops (100+) or to wholesale and sell onto smaller independent shops there will be a team of buyers and merchandisers. The buyers don't actually buy anything despite the title, they chose and select items and create collections and work with designers to have lines manufactured. They negotiate the price too and in principle outline a potential order size or breakpoints of how much for how many.

Within this, as many of you will know, there is a multilayered sampling process. Sampling can be simply having pre-produced items sent in from a factory or supplier, or of course sending out designs and specifications to a supplier/factory to have something bespoke made. At this stage finishes are agreed, tweaked and signed off. These samples are usually stored for the lifetime of the product or disposed of as newer iterations are created and subsequently signed off. In a very organised organisation, the samples are labelled, dated and actually signed, in others they'll be stamped or sticker or of course, they are just shoved, unmarked in a box that someone has written ' 2018 samples' on it... it really is that loose and it always has been no matter how big a company you work in or which field of retail it is too.

Many Buying teams do not keep the pre-production and amend samples at all, they're taken home, given to charity (if safe of course) or sold in staff sales and monies given to charity etc. There will though usually (but not always) be a production item pulled for warehouse stock on delivery and that is stored or at least checked.

This in itself allows a number of ‘one off’ items to exist in many stages of the pre-production process, right through to potential one offs that were of production look and feel at first glance, but actually hold minor differences that over 30+ years would look the same until properly analysed and appraised and in turn ‘red-flagged’.

So, the product is signed off, time for delivery... this is where the actual buying takes place and this is done by the Merchandising team (some environments call it Distributors or Allocators), essentially though the Merchandising team hold the money and are the ones who spend it. They are also the ones that are tasked to protect the business' profit line by buying the right volume at the right time to manage and fulfil the demand of the consumer as well cover stock for any online offering sale/promotions etc. They also hold the main responsibility to ensure that dead or toxic stock exist the business ledger in good time at a price that doesn't overly detract from the profit (margin) they have accrued through careful purchasing in the first place.

OK... so how does any of this link to suspect items or red flags? Well this is where it gets interesting...

So, we have a teddybear (I'll stick to a toy product for the example as I was working on one last week), it launches in April 2018, it took from the previous May to develop, goes back and forth from the Far East (FE) in design concept, basic samples have come over, nose shapes have changed, different labelling has been chosen and then the bag and header card is selected and agreed. The price is agreed and in late August it is finally signed off as a product. The line goes over to the Merch team, they discuss at length with the Buyer how much to invest, forecasts are completed and again signed off the cash is set aside from the open to buy (a term applied to the amount of cash available to the team both in stock on hand and in live / placed orders), then the Purchase Orders (POs) are sent to China and the manufacturing starts.

Broadly speaking the manufacturing process across most items (toys, ceramics, clothing etc) is 10-12 weeks, followed by 4 weeks 'on the water' and the a week allowed for customs and delivery within the UK to the distribution centre or warehouse (the first one stock barely touches the sides of these days, delivered in allocated out, the latter is a longer term holding system). This stock SHOULD be cycled by the teams on a first in first out system, but in all honesty it rarely does outside of food and drink when a line is in high demand.. "its in the loading dock, book it in, put it away in its pick location and instantly pick it and send it, we can worry about finding the older version later" or something similar is always happening, so timelines are never clear or clean.

So, our teddybear has arrived in the UK, its in the warehouse and now waits to be allocated. The merchandising team see its there, they have created a forecast based on previous sales of similar (like-line) items and they arrange an initial allocation. Depending on the individual shop's capacity and sales history, each shop in a retail estate will receive a different (or tiered) package. That package once sent is unlikely to be moved around shop to shop UNLESS something goes very awry.

April rolls around, the teddy is selling really well in the first couple of weeks, everyone is happy, the shop is happy as the teddy is helping hit their sales target, the buyer is happy because the product they spent 8 months or more working on is a success... oh wait, not everyone is happy... the merchandiser is shitting himself... he can see there is, thanks to the great sales line, already only 18 weeks of stock left, they hastily sent over a new PO, even larger than the last one to the supplier in China to cover a longer sales period (due to the re-forecast demanding even more stock per day too) and beg for a slot in production to gat more teddies ASAP so the consumer, buyer and shop manager all stay none the wiser of the pending loss of sales and out of stock that is looming.

The factory in China though is fully booked, the teddy can't be delivered in the normal time line, there's going to be a 3 week delay, so as much as a month OOS. The Merchandiser stresses how important the company business is and agrees to discuss how they can cut the time with the supplier. The supplier offers three options:

1) use a stock item (so normal rather than bespoke nose), its literally 3mm difference, will anyone notice; it will only be 1,500 units of a line that it turns out in hindsight, will sell 10,000 a year for the next 5 years.
2) let the Chinese factory subcontract the bag and head card to a sister company, again its a tiny difference, the black ink will be a little greyer, but no one will notice as its just packaging, the item inside is the same, it will only be 1,500 units of a line that it turns out in hindsight, will sell 10,000 a year for the next 5 years.
3) airfreight the item at the Merchandiser's cost, reducing margin

There is always a fourth option, resource an interim version in the UK or Europe to reduce lead time, but this drives down margin again and of course would have significant differences.

None of the above produces a fake, but the ones that have had changes (4/5 options) would all raise a red flag, circa 30+ years later...

so, and I want to be explicitly clear here, across 7500 lines there will be at least 5-6, but usually over a dozen lines that this happens to every year in an average company that is dealing with c100 stores. This is today, with exceptional IT, communication, and by the nature of being 30 years or more later, more experienced teams of staff... things sell at different rates, weather means ice-cream sell one day and umbrellas the next, that’s retail.

Now go back 30-40 years, does anyone actually want to tell me factually that Kenner and Palitoy never had these issues, issues that for the last 20 years of my career I have seen again and again across multiple different retailers, had to deal with as a manufacturer etc. Can anyone actually prove without any doubt that Kenner and Palitoy never had a factory openly, or (and lets be honest here) unknown to them subcontract to another factory when stock ran low or the original factory was massively oversubscribed.

How many of these subcontracted items might have survived out of the entire run, how many oddities are we seeing as a red flag rather than their true history?

A sticker on a baggie like the Woolworths ones will most likely have at least two if not a dozen different versions in its lifetime of production; in my company we reprint our 'great value books' corner flash stickers (they fit top right on a 'The Works type book to show the bargain price) at least 3 times year and every time we use the same printer, but every year at least one batch is slightly differently type set, the colour isn't a perfect match; they're the cheapest stickers we can get to see the cheapest products at the highest discount while delivering the highest margin.

I'm not saying in writing this, for one minute, that everything written by Frank Mewes is wrong, it's absolutely not, broadly speaking the baggie guide was invaluable for me when I started collecting again and had some to identify, I'm not saying that everything in the Woolworths pack thread is wrong either, but I am being very open in suggesting that things happen in production, things that are known, things that are unknown, things that can affect small volumes, one of (or 5/6 of) a kind items, things that could affect a whole batch of items, that are different from all other known examples can appear in a lost shipping case or a blackhole collection…

I would suggest that in all cases some are most likely fakes, of course they are, but I would also state that they are absolutely not all fakes just because they are not what has been seen before, in a known example (production or pre-production) in the same way that a Palitoy 12c recently discovered isn't fake either, if it were a baggie though... might it be?

Please be careful in the decisions you make, the conclusions you come to and the fingers you point... most of all in anything you are actively destroying based on one or a few opinions and not maybe the fullest understanding of how the manufacturing and buying process really works,
Last edited by SAVORY100 on Sat Sep 01, 2018 8:22 pm, edited 1 time in total.
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Re: Buying and Merchandising, what happens when a line is going to go out of stock

Postby Leemcl » Sat Sep 01, 2018 8:22 pm

A great thread. And a lot of well observed points. My wife works in Design ( alongside buyers and merchandisers) and the process you describe mirrors the things she has told me over the years. I think the points made are absolutely valid.

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Re: Buying and Merchandising, what happens when a line is going to go out of stock

Postby Snaketibe » Sat Sep 01, 2018 8:36 pm

Thank you for taking the time to share your experience and thoughts. It was quite a long read, but an interesting one which provides food for thought.

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Re: Buying and Merchandising, what happens when a line is going to go out of stock

Postby Cardbackkid » Sat Sep 01, 2018 8:39 pm

Agree great thread it’s definitely got me thinking .

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Re: Buying and Merchandising, what happens when a line is going to go out of stock

Postby itfciain » Sat Sep 01, 2018 8:42 pm

Steve - I think this is a great post and is clearly well written from a very knowledgeable background

I can see where you are heading with this and agree that caution should always be applied before calling out something as fake.

However, what has amazed me about the current situation and this was exactly the same with Toni as well - everything seems to trace back to one place. And not only that but everything that has a remote suspicion also traces back to that one place.

Now I agree that during production packaging and other materials can change - for example there was a fad recently for Purple Stitch Jawas - now lets not kid ourselves here, this was a factory that ran out of the regular stitch so just substituted in something close - they weren't to know that years down the line us nerds would be pouring over something so small. However, those Jawa's came in from different people and different countries. Another Jawa related variant that I have seen recently is the tag inside the cloak - now I know of three different examples of these - and they literally turned up all over the world (one was Aus, one was California and I can't remember the other) - this is how wide the net is with variants

So if that is the case, when it comes down to the items that are currently under suspicion why are we only seeing one starting source ? The origins of these items from said source seem to be pretty sketchy but as I understand some of them came from years old US purchases. Now why have none of the other US dealers (some of these guys - like JakeA - have been doing this for many years) not come across any of these. Why do none of the Palitoy/UK products trace back to any of the UK sellers - people like Jim S who were buying up store stock when most of us weren't even thinking about collecting toys ?

I just can't seem to find an answer to these questions. I buy and sell toys and know that there are finds out there - but I rarely if ever find something that no-one else has ever seen

I think that Laurence did an amazing amount of work on the Woolies baggies and I think he was literally trying to cover every base. Weighing cardboard and analyzing plastic folds on their own would never be proof enough for most - and I agree that they shouldn't - but when everything is presented in one go then even the most un-suspicious minds should be pricked
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Re: Buying and Merchandising, what happens when a line is going to go out of stock

Postby Palifan » Sun Sep 02, 2018 10:04 am

Great thread Steve and thank you for taking so much time to write up your thoughts. It's a fascinating read and gives some great background to the way things are produced and why certain items can have changes to them.

All the areas that have been under suspicion over the years on here are not something that I've actively collected (although I do think I have a TT Hoth Trooper that I unknowingly bought at some point), but I've always read up on everything presented on this site as it's always an interesting read and also I find it's best to educate yourself about all areas of interest you have. It certainly makes sense that items can change for a number of reasons in their lifetime but I also see Iain's point about all the items under suspicion coming from one source, it's very hard to ignore that fact. Saying that though what I got the most from what you wrote is that people probably shouldn't be destroying things just yet. I know each collector has their own thoughts on how and what they want to collect but with the TT Hoth Trooper I have for instance, even though I'm pretty sure it didn't come out from a factory all sealed the way it is now I can see it's all vintage and would never be able to destroy it. For other collectors like say Mr Palitoy, any moc he had that he suspected of being a Toni he had to get rid of from his collection, these mocs were something that tainted his collection form him and I can understand that also. It really is up to the collector to decide what they're happy with in their collection but it does seem to make sense to not rush into binning everything as there could be something real in there that you have.

I must admit I haven't personally read anything about people destroying items and I'm reading between the lines of what's been written here but it does all make me think about everything that's come up recently. Hopefully this mess will all be cleared up once and for all at some point as it really is damaging areas of the hobby which is such a shame for something that's supposed to bring us all enjoyment. If some of these things we collect didn't have such a high price tag attached to them I'm sure things would be a lot simpler but unfortunately that's not the world we live in.

Great work though to all of those people who have invested so many hours trying to get to the bottom of all of this. I do think it's worth bringing up when some suspicious seems to be going on as it effects us all in some way but as ever we have to wait to see what other information comes along over time.

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Re: Buying and Merchandising, what happens when a line is going to go out of stock

Postby spoons » Sun Sep 02, 2018 3:21 pm

A really interesting read Steve, and excellent points. But I echo Iain in that when all red flags originate from the the source of paint touch ups and clearly faked baggies, it’s difficult to believe that the hobby’s latest scandals can be put down to changes in vintage suppliers.

What’s really sad is that any real differences in printing etc on baggies will always be disputed now.

The baggie side of the hobby is forever tarred
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Re: Buying and Merchandising, what happens when a line is going to go out of stock

Postby SAVORY100 » Sun Sep 02, 2018 5:44 pm

Just want to reiterate this; I'm absolutely not trying to suggest that I believe the recent spate of red flag raising is completely incorrect, all I'm trying to do is share knowledge on how Buying and Merchandising actually works in big companies.

To add meat to the bones, my career includes WHSmith, English Heritage, Next, Homebase, Asda and funnily enough before it went pop; Woolworths, so proper, big, blue chip retailers and importers of own brand lines as well as big brand items. My work with Asda, Next, Homebase was as a Far East supplier, so the other end of the chain, with office based in Hong Kong and factories in Shenzhen; hence some of my insight to subcontracting and product materials and packaging changes mid-run of any given line. I only wrote the above to try to help people without this knowledge to make a fully rounded decision.

For all the great information in the Woolies thread though, my evidence and experience above could counter that they're not fake and suggest that these are all potentially OK.

I'm absolutely NOT though suggesting that it does by any means

To my mind its all still very unclear and as is very clearly noted in your responses, Iain and Spoons, one source that has been identified as selling all (or most of) the items in question, is highly suspicious, but that still does not prove that the Woolies packs are fake at all, they are different and currently under review for most folk. I actually think the Woolies post basically makes this observation, but it seems to have been construed as a statement of them being fake rather than what it is; a very detailed account of two different type label/packaging variants, one of which is worthy of additional review and attention due to the link at source.

It is still at this stage highly possible that they are from a different sticker batch in production, they would for their entire number in existence be a small portion of a batch at that... anyone thinking of destroying them or calling them out right fakes is wrong at this stage, I'm just asking for patience and caution before something that might just be different might actually be lost to the hobby in what are currently divisive and heated times.

I would also note (as it appears to have been brought into the thread) I'm not trying to defend the accused at all with my post, I've met the guy 3 times at FF, spoken no more than a handful of words to the him. Unlike many in those particular discussions (I specifically wrote this in a new thread as I have no dog in the fight), I'm trying to stay purely objective and share actual factual information about how things actually work in the industry and how and why batches can be different... variants appear everywhere and many if not all (thank you Iain for mentioning purple stitching as a very good example), they still happen in modern lines too with longer sabres etc.

I'm not placing my bets on any side of the dice, just sharing 20+ years of knowledge in the field being reviewed so people can know a little more and maybe not be so hasty to make a final decision and if and when destruction of items is eventually mooted as an action plan a little thought is given... what really scares me personally is that something precious could be lost because its not been seen before and the source currently is under suspicion and scrutiny for other questionable items.

I reiterate, hopefully people can read an learn and make informed decisions on any current or future items that appear to be different to known examples, whoever is selling them...
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Re: Buying and Merchandising, what happens when a line is going to go out of stock

Postby Mini99 » Sun Sep 02, 2018 6:17 pm

my career includes WHSmith, English Heritage, Next, Homebase, Asda and funnily enough before it went pop; Woolworths

That is certainly an interesting CV!

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Re: Buying and Merchandising, what happens when a line is going to go out of stock

Postby Palifan » Sun Sep 02, 2018 6:38 pm

All well said again Steve and it's the way I took your first post so no misunderstanding from me and thanks again for making everything so clear. :D

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Re: Buying and Merchandising, what happens when a line is going to go out of stock

Postby SAVORY100 » Thu Sep 20, 2018 8:06 am

Palifan wrote:All well said again Steve and it's the way I took your first post so no misunderstanding from me and thanks again for making everything so clear. :D

Ian


Cheers Ian 8)
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Re: Buying and Merchandising, what happens when a line is going to go out of stock

Postby edd_jedi » Thu Sep 20, 2018 10:58 am

Very interesting read Steve, and you make many valid points. As you specifically mention the Woolworths packs though, I have to agree with Iain and Spoons. These items do not have one or two red flags, but many. For example, the fact that these round offer stickers appear on many other items including boxed vehicles, monsters, playsets, mini rigs, special play packs, and non-figure baggies like bandolier straps, yet NONE of these items have ever been found with a sticker using the same font, paper type and ink as the suspect 8 packs. Again this is just one red flag, there are 9 others including what Iain and Spoons mention above.

Although much of what you say is true and as you point out is not specific to this example, I worry it could potentially undermine some of the research done or exonerate the accused. However I agree that people should not be too quick to cry fake when something looks slightly unusual. I suspect the items that have recently been faked were chosen exactly for the reasons you point out, they were loosely designed and manufactured making them much easier to fake than say a MOC and it's taken people years to notice.


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