Christmas in February?
By HAROLD UIBLE
Vice President
Wells Manufacturing Company, Inc.
Yes, in the American toy business, Christmas does come in February, for traditionally the second and third weeks of February are the show weeks of what will be selling the following Christmas season in our nation's retail stores.
Each February, the Toy Building at 200 Fifth Avenue, New York City, has over 1,000 manufacturer's exhibiting their wares. Buyers from throughout the world will place their orders for this merchandise. This time lag between February and the Christmas selling season is necessary to enable the buyers to place their commitments and the manufacturers who make the merchandise, ship it to distribution points and their stores and, in turn, give the consumers time to make purchases for the Christmas holidays.
Since 1945, Wells Manufacturing Co., in New Vienna, has been in the toy business. It is the company's work to make things that other people play with – the manufacture of everyday toys such as sponge balls, jump ropes, jack sets, baseball bats and balls, soap bubbles, chalk boards, pinwheels paddle balls and yo-yos.
We all take for granted the presence of the thousands of items on the shelves in our retail stores. In a casual observation making these items appears to be "simple". Yet, the making of a sponge rubber ball includes the blending of 10 items to the rubber, in quantities ranging from a few grams to several pounds, followed by cutting, tumbling, a "curing" process and three coats of paint.
After the product is made, our merchandise is sold throughout the United States and Canada to retail units, jobbers and exporters and companies that incorporate our products into their items.
In 1982, the toy business in the United States amounted to about 5 billion dollars, of which 25 percent is represented by imports from such countries as Hong Kong, Taiwan, and other low labor cost countries. Imports continue to be a growing factor in the toy business.
The electronic age has hurt the conventional toy business. And yet in 1982 hand held electronic games were being sold at distressed prices to reduce inventories. An estimated 6 million American households own video game attachments, providing for an expanding market for cartridges. Since 1980 there has been a gradual evolution from sports games to space games and now to arcade licensed games.
It is necessary to have people with skills in many areas to make and sell our products at a profit. Like everyone, we have seen costs sky-rocket. And yet, selling prices have not increased enough to compensate for today's cost of business Competition does keep a tight rein on prices, and the consumer benefits from this fact.
Another trend of recent years has been the proliferation of licensed items. It has recently been observed that more than 80 companies are marketing on the "Smurf" license.
Virtually every week we receive a print or sample of an inventor's "hot idea" for us to manufacture and sell. Unfortunately, most toys today are sold on an impulse base. For an item to be in a store, that item must earn a minimum amount of dollar sales per year. Professional buyers demand a satisfactory amount of sales per square foot, that the item offer a price value ration, a satisfactory gross margin return on the inventory investment and that it complement the objective of the business.
Yes, toys are fun, but work comes first in making the items, selling them at a profit and getting paid. That is the marvelous economic cycle.
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