I was thinking how it’s amazing it is that yoyo companies that only make yoyos survive. When you think about it, hardly anyone buys yoyos.
If you ask almost anyone you know when the last time they bought a yoyo was, most would probably say never or ‘I bought some plastic thing once when I was a kid’.
Not only that, its amazing that they can release many different kinds of yoyos without customers thinking ‘There’s another one? I just bought one of theirs and it’s round and spins like the new one. Why would I need the new one?’
Yet we have companies surviving. This is amazing seeing as so few people take yoyo seriously.
Well, you have us people in the community who buy lots of yoyos. That leads to companies getting money to make more yoyos. For somebody to buy it, it has to be a good yoyo. No one is going to buy a bad yoyo. Successful companies make great yoyos that a lot of people buy. The company becomes popular and lots of people will want to buy yoyos from that company. (I’m not good at explaining. Sorry if this isn’t helpful.)
Yeah I wonder how many you’d need to sell yearly to support yourself. A few thousand? Depends of a number of factors of course but I feel like that would be close to a bare minimum
Not all companies need to pull in a lot of revenue to stay in the game. Some only need to make enough to cover their costs and make it worth their time (e.g., G2). Others like Duncan and YoyoFactory have such a large, worldwide retail footprint that they can sell enough yoyos every year to keep a large-ish operation going with lots of employees, in-house designers, sponsored teams, etc.
Still, plenty of companies fall by the wayside as the economics of it all cease to make their operations viable (for whatever reason). In such a niche industry you have to keep a very close eye on all your costs, and operating “lean and mean” is surely a necessity.
True but what you’re talking about is more of a sustainable hobby within a hobby. I hadn’t ever thought about it but if you were to do nothing but make yo-yos, what would it take? Not just a side gig
I’m sure you could work up a spreadsheet that tells you what you would have to take in to earn a livable income strictly from yoyo sales. It will be different for each person depending on where they live, how many mouths they have to feed, etc.
Profit margin is part of the equation, but not the whole equation. Even if I can make $100 profit on a yoyo I sell for $110, that won’t help me make a livable wage if I can only sell five of them a year and I live in an expensive city like Manhatten or Los Angeles.
Assuming someone could live off of a minimum wage of $10 per hour, that means 40 yoyos per week sold, 160 per month, 1920 yoyos per year.
My numbers above don’t account for bad runs or unexpected costs or overhead of running the brand (advertising, team yoyos, yoyos to reviewers).
So lets say 2500 yoyos per year.
For reference in the year between my first Rain City Skills release and present I’ve sold a total of about 600 yoyos. Profit margins ranged between $0 and $25 depending on direct vs. retail and rate of b-grades. That’s a remarkably high number for a small brand that I attribute 100% to the good luck of hitting the top of a fad (slimline yoyo - Gamer).
The magic number to make yoyo profitable is 500 yoyos per run. After 500 your cost for the actual yoyo are cut almost in half compared to 100 or 200. That’s why Yoyofactory is a viable business, they can make big runs so their per-unit cost is low. Brands like Rain City that make 100-150 per run pay twice as much to compete in the same market, so have lower profit margins. There’s a tradeoff though, Yoyofactor has a much higher overhead, covering costs of employees, big name sponsored players, etc.
Keep your eyes peeled in 2019, this is the focus of one of the chapters in my book on the Modern World of Yoyo that I’m determined to have published in time for Cleveland worlds.
Nobody could do that where I live. That’s why it matters where someone resides and what their cost of living is. $10 per hour might work out okay for someone in the sticks of Montana, but it wouldn’t be a fraction of what they’d need to live in NYC or LA. And it would be a serious struggle for anyone with a family living in a decent suburban neighborhood almost anywhere in the US.
I just think that if one is going to do an analysis like that, it makes more sense to find an actual scenario where the assumptions make sense. Assuming that $10/hr is a livable wage makes me immediately skeptical of any conclusions you can draw from the results, simply because $10/hr is nowhere near a livable wage, and therefore an invalid assumption to right from the start. The entire analysis becomes invalid as a result.
most people do not live in the biggest most expensive cities.To assume (for ease of conversation and his argument) 10$ an hour is not unreasonable at all. Its not ideal, but its not impossible. Ive had very few jobs that paid more than that, and Im still alive and well.
I would love to hear about anyone who makes their entire living running a business which only clears the equivalent of $10/hr. Health insurance premiums and self employment taxes alone makes that nearly impossible these days.
I think the reality is that anyone who wants to make and sell their own brand of yoyos has to do it as a side venture.
The actual ‘living wage’ number would be different in every city in the country. It would be irrelevant whatever number I chose. I suppose I could have gone the other way and named a ridiculous number. Where I live the CAD equivalent of $10 USD isn’t a livable wage, but there are places in Canada where it is. Likewise the numbers I’m giving on making yoyos are rough numbers, as The design, machine shop, material, etc that goes into the cost of the yoyo will vary. The ‘analysis’ is a thought experiment, not actual fact.
I do agree with your statement, making yoyos as a small brand isn’t a way to make a living. I think if anything you stating that says you agree with my ‘analysis’ as it pretty clearly shows that selling enough yoyos to live off of, even at the imaginary $10 per hour rate is unrealistic.