Yeah, to make it more elusive. People want what they canât get. As long as it is still attainable (not too insanely priced) people will find it cool. Everybody always freaks out over Ferraris and Porsches. Why? Because not everybody has one. Everybody could have one, but most people canât afford it, so that makes it really special.
Consider the marketing design (intentional or not) behind boutique companies. Take CLYW, for an example. The return tops had a set retail price, sold out, and then were resold at a much higher price on the BST. Economics 101 dictates prices will rise to created an equilibrium with demand. Prices were increased. In my experience, during this time I was only finding CLYW at YYE with very limited releases and colors. This increased the desirability of the brand. (I waited 6 months to get a wooly, because there were no releases and they almost instantly sold out.)
Fast forward to CLYW being a full time position. The brand is well established. CLYW expands to more stores increasing supply. However, perception remains that these throws are limited (and are by some extent through color way). Prices will remain high as long as demand does. However, I can now go to 2 other US retailers and grab model âXâ.
Perception is everything.
Anyone else buy a FG last release? I did, I spent 75each on two B grades. This was due too: brand is desirable to me and, I know I can turn around and BST for what I paid 7 days a week.
Meanwhile, if the 50%, 50% mark up theory is true, the retailer is not getting a cut of profits, but manufacturer is getting the same amount of profit as if sold to said retailer. i.e. 150 chief at retailer bought from manufacturer for 75, same price as FG to public. However, the customer is euphoric because âOMGâ we got a steal of a deal because of a minor defect. The Manufacturer looks good for offering such a deal while maintaining profit margins. Perception maintained, customers happy.
I am not saying that any particular brand is good or bad. Cost is this example is tied to perception (competitive advantage). Very easily to subconsciously think a sub $100 is no good. Just as many throws over $100 are bound to displease.
My opinion is that this is good for the yoyo community. High prices will attract new entries into the yoyo market as noted by the influx of companies in the past year or two. There will always companies who sell at a higher price point based upon an competitive advantage like CLYW (in this case reputation) and on the opposite you will have the cost leaders who pump out product at the lowest price possible and make a profit through quantity like Magic Yoyo. There will always be customers for both.
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Please tell me which sport car I can buy on the cheap? Sport cars arenât expensive to make it elusive, theyâre expensive because theyâre well finished, well tuned machines that have a lot of expensive parts and materials, expensive research and development and a lot manual labor into making them.
Yoyos are not clothes that have expensive branding in them, you donât wear them for other people to see your status, you use them to achieve performance, if you want to compare them with anything else, compare them with sport goods like running shoes, roller-blades and bicycles.
You are discounting the entire sub genre of collectors.
How many people play yoyo? Not many. How many people play and collect yoyo? Very few. That market is too small to base an entire business on. Sure, some very small manufacturer will have a higher success at that market, and pretty much all of them try to target it, but the bulk of the money is in selling more yoyos to more people. How much does 100 limited yoyos at $150 each cost? 15k, business wide, thatâs not much at all, specially when we consider the retailer piece of the pie and the costs involved to making them.
Sports cars are not practical for everyday use. The only reason people purchase them is for status and because they are cool. High end cars are a quality product that increases the manufacturers costs, but they do have a substantial price markup above regular cars for the purpose of maintaining their high end status.
Yo-yo branding is a huge deal to alot of people. We had a post earlier today where someoneâs shocking news was that they had decided to get a YYF when they normally donât like that brand. There is a group of people who only use General Yo. Some people wont buy anything made outside the US. A kid throwing a chief has a higher perceived status then a kid throwing a DV888. There are companies that have alot more prestige then others even though the actual product isnât that much different.
At the end of the day, quality yoyoâs are all about the same, and any one of the major companies has a quality yoyo that will fit your preferences. No major company out there is getting trashed in their product reviews, and they all do a good job of bringing great toys to market. If the products are equal, then it comes down to marketing.
Product lust is an important marketing goal and yoyo marketing is based on that. The whole reason for signature yoyos is to associate love for a great player with a product. Even though DMII is a great throw, would everyone love it as much if it wasnât Andreâs signature yoyo? I wanted to get a superstar after watching John Ando in 2008 (I did and I loved it :)) So we definitely make our yoyo choices based of brand preference and perceived value.
Iâd have to think about it more, but I wonder if perceived extra value is the primary motivator for most yoyo selection. I will have to think on that more though. Any thoughts?
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Good point, I think with colectors the product lust element is probably increased. I think TotalArtist mentioned back up the page somewhere that most collectors have a niche of collecting, such as all nickel. Its likely that there are people who collect all Duncan, or all Bi-metal, or something; and making the choice on what product to collect has to do with product lust.
Also
We all understand that yoyo economics is a small market, with many difficulties for manufacturers. Thatâs one of the things that makes it so interesting to analyze.
Also da5id already said
So obviously the market is big enough to base an entire business on.
Most yoyoers ARE collectors. You call it your yoyo what? âCollection.â
well sure I guess weâre all collectors, but not everyone is trying to get every yoyo or every yoyo that is a <whatever brand/style>
I guess Iâm referring to serious collectors, not just those of us who like to have a bunch of yoyos. Iâm thinking about Mint in Box collectors. Sorry if I was unclear.
And also sorry for a hundred really long posts today. 
That is the hope anyway 
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Yes, the yoyo market is actually pretty big, I was referring to the expensive limited releases yoyo market, which is not that big. My whole point is that the companiesâ goals are to acquire more consumers, and they do that by having low priced products that still perform well.
Why do you think YYF does so much demonstrations, tours and presentations? To get new consumers.
your words pal.
But you bring up a good point. there is a different sub market for low end yoyos that are mass produced and cheap then for high end yoyos that are more expensive and made in more limited quantities. Its all part of the market.
I think the companies with a mass produced strategy have a broader focus then just yoyos.
Case Study: Duncan has alot of decent cheap yoyos that are mass produced and sold all over the world. but they also make tops and juggling equipment and a bunch of other toys too.
Companies that just sell yoyos, like One Drop, are probably going to get more money from selling lower volume, higher quality, higher cost yoyos then they would from releasing a million cheap plastics. Part of the OD appeal is its reputation for a quality product, Its probably in their best interest to avoid cheap mass produced lower quality plastics, and spend the extra effort to put out a more expensive high quality plastic yoyo like Rally.
Would they prefer to sell 4,000 $10 low quality yoyos or 1,000 $40 Rallys? Its the same money either way, but if they stay with the higher end product they can keep the companyâs reputation for quality and avoid the risk of a higher volume sale. Because yoyo is a smaller market, high sale volume is much less likely to be your main profit point. The way to make money is with increased profit per sale, not increased number of sales for profit.
Well, what you said is correct. They do cost more because there is more effort put into making them, and they are nicer. However, they could be priced cheaper but manufacturers donât just to keep the riff-raff from buying one. How many commercials do you see for BMWs (the higher lines, not the 3 series)? Probably zero, maybe one or two. How many commercials do you see for something like Kias? Or Fords? At least 1 a commercial break. They still need to keep it exclusive and elusive.
A couple months ago my dad went to the BMW dealership to buy a new 750Li (which is amazing, if youâre wondering). The salesman was showing my dad the car, and afterwards he asked if my dad had any questions. My dad asked the obvious- âIs there any promotions/sales going on right now?â The salesman replied âHa! BMWs are never on sale!â Why do you think they are never on sale? Because BMW canât afford some tv ads? No, they donât want everybody having one. Sure, you buy it because it has nice features, but also you want to be âcoolâ and have a âcoolâ car. How does this apply to yoyos? CLYW, TP, YYR- they all try to be kind of exclusive. Maybe they arenât trying per se, but it is happening. Then when people get one of these they post about it and people admire them for 10 seconds. If I posted about my new Yomega Maverick, I would get laughed at, not admired. And sure, it is nice to use a fancy, highend yoyo, but if everybody could get a CLYW the way they can a FH2 or Maverick, it wouldnât be as special to people when they finally get one. How many times have you seen somebody on the BST saying they are trying to save up for the newest [insert cool CLYW yoyo here] so they want you to buy stuff? Iâd say often. How often have you seen someone say buy this stuff so I can buy a Protostar? Probably not that often.
The point Iâm trying to prove here is that people want what they canât have. It would be pretty tough to hype up a yoyo that will have 1000 pieces in the first run. Itâs a lot easier when there is a countdown and there are only 6 in each colorway and everybody fights like little girls trying to get one. And yes, some people might be buying that because they want a high performance, fine tuned throw, but it also makes them feel special because they got it and a lot of other people didnâtâŚ
True that. Also, people probably feel safer trying a throw they donât know if they will like if they know it will hold itâs value like the high end throws do. A lower end throw wonât hold itâs value as well, so they become worth less
You hit precisely the point Iâm trying to make. Quality yoyos are more costly than non quality one. The prices arenât more expensive to make them be a better perceived brand, they are more expensive to keep quality high and still make a profit.
Quality is expensive, no matter in what business.
You have some good writing there, but I believe your conclusions are not 100% due to the cause and effect issue: are the more expensive cars more wanted because they are better, or are they more wanted because theyâre more expensive? Chicken or the egg problem. I believe theyâre more expensive because theyâre better, cost higher to make. You canât make super high quality cars on bulk, because quality would be affected by it.
But let me leave you with this thought: who owns the Ferrari company, one of the most well perceived sports car company? Fiat, a company that makes way cheaper cars, but targets a broader market. Fiat simply makes more money than Ferrari does, and so they were able to buy them.
I enjoy reading the theories in this thread
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Ok, look, Its in literally every economic textbook that once a productâs price increases to a certain point, it makes it more difficult to get and thus more desirable without increasing quality or cost to the manufacturer. This is a fact of economics so please, just let it go.
Sports cars use this, High end clothing designers do, a whole slew of companies use this as a standard marketing principle. The discussion here is about how much yoyo manufacturers use this and other marketing practices in yoyo economics.
No one is saying that bigger companies who sell more yoyos arenât making more money then smaller companies. Duncan makes more money then Caribou Lodge, we know. Were talking about how to market yoyos.
Also you can definitely make high quality product in bulk. If One Drop wanted to they could churn out summits day and night for a year and every one they packaged would be just as good as the current smaller runs. They just wouldnât be able to sell them all so they donât. A ferrari is made on an assembly line just like a fiat, ferrari could litter the world with cars but they donât for the same reason OD isnât going to make a million Summits.
AnywaysâŚ
I like what Big Yoyo said about a yoyoâs exclusiveness. Its a good point that getting a maverick gets you scorn when a high end throw will get you some recognition. I bought a God Tricks Destiny a few months back and think its a great throw, but most people probably havenât thrown it or even heard of it so I didnât get the recognition bump that I would have if I purchased something better known.
good thoughts!
OD recently expanded their warehouse and acquired more machines, therefore they havenât hit the point where they can make yoyos to the whole world nonstop like youâre saying.
And about Ferrariâs and most sport cars, you havenât checked how they are made, they are not massly produced in an assembly line. Parts of the car are made on the assembly line, but a lot of manual labor hours go into making a highend engine and assembling the car.
Letâs do some math:
Based on the Summit documentary, it takes 7 minutes on the machine to do 1 side of the Summit (maybe itâs the whole yoyo? they just say cycle). For simplificationâs sake, letâs say that this is the longest time of their assembly line (which contains machining the bearing seat and response groove, polishing, anodizing, assembling and shipping).
So letâs say they do 1 full summit every 15 minutes in a machine, which amounts to 4 summits in an hour. They have 2 yoyo making machines, so that makes 8 summits an hour.
Letâs say that due to the fact that the machines are complex and that they aim for a high quality, that they need constant human supervision and are not run overnight. Letâs say the folks at OD work 8 hours a day. That amounts to 64 yoyos a day. Since yoyos are hard to make, letâs say that 10% of them are not on par with their target quality, and are b grades or scrap, so letâs say they make 58 summitâs a day.
Letâs also assume they donât work on weekends, so that gives us 20 days in a month. Which means 1,160 Summits a month. Retaling each at $115, that gives us $133,400 of generated money in a month, not including any costs or the retailer parts of things. Letâs say they make a quarter of that in profit, so $33,350 in profit.
This of course was a rough estimation which made a lot of assumptions, and ignored a lot of existing issues.
Remember we sell at it wholesale to the retailer who charges $115. We arenât getting $115. This changes your calculation by a massive amount.
Iâm with Jake. Itâs interesting to read the theories knowing what the reality is. Iâll break it down for you: itâs much more difficult and costs much more than what is being speculated. We certainly are not getting rich by any means.
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