FUNKO POP! IS SET TO THROW AWAY $30 MILLION OF ITS OWN TOYS IN THE TRASH
Supply and demand is the dynamic that dictates the success of most of our capital markets. And when the demand for something drops precipitously, usually that means that the price of that something drops to a level where people are again willing to buy it. But not always! And this is a huge instance of that very situation. So much so, that the toymaker Funko Pop! is about to literally throw away $30 million of its own toys in the trach can. Sometimes, it seems, a company’s own products become such a cost to even store that it’s cheaper to simply throw them away.
YOU MAY NOT KNOW FUNKO POP! THE COMPANY, BUT YOU DEFINITELY KNOW THEIR TOY FIGURES
Funko Pop! figures may not be something you recognize by name. But it’s almost impossible that you’re not familiar with them. They are those big-headed, vinyl pop culture dolls you have seen in toy stores, grocery stores, pharmacies and pretty much everywhere anyone selling stuff might include some temptation for buyers of all ages. I have at least three of them, and I’m technically middle aged. But to be honest, until now I wouldn’t have recognized the company’s name that makes them, Funko Pop!
FUNK POP! FACED WITH HUGE SURPLUS OF TOYS WORTH LESS THEN THE COST TO STORE THEM
And that could very well be a part of the company’s problem. Funko recently reported in its 4th quarter earnings report that the combination of low demand for their toys with an ever-growing inventory was causing them financial trouble. Mostly, what that means is that they had so many of their toys piling up in storage and not selling in stores, that they were having to spend too much money renting more storage space to keep them. In a nutshell that means that the cost of storing them is more money than it’s worth to keep them.
And no, giving them away would be even worse. If the market is flooded with free Funko Pop! toys, who would bother spending any money on the ones actually in stores? A sad state of affairs indeed. And what a waste!