According to several sources, Mattel has upped its annual minimum order requirement from $25,000 to $50,000. That is a significant increase (100%) and a considerable number for independent retailers to meet. Not many of them have the customer base, warehouse space, and dollars to make that kind of commitment, particularly with what appears to be no notice.
Why is Mattel doing this? Here is what I think:
Mattel is becoming a different company that needs to manage major event roll-outs, The Barbie movie being a prime example. When you tie your product on the shelf to a movie on the screen, you need to have tight relationships with national retailers who can assure that the product is on the shelves and that the merchandising is displayed correctly when the movie hits the screen. As a result, small independent retailers are a sideshow to the big event.
Additionally, Mattel probably deems the independent toy sector unprofitable or not contributing enough revenue to be worth the company’s while. Better to deal with larger operators with lots of stores who will buy in quantity and provide disciplined merchandising.
Mattel’s management is taking this action because they think it is in the best interests of Mattel in the third decade of the 21st century. Smaller retailers must figure out how to cope with this seismic change.
What is missing in all of this are wholesalers. Back in the 90s and before, wholesalers played an important role. They bought in large quantities from major toy companies and then resold the merchandise in much smaller amounts to independent retail stores. There were quite a few of them at the time. Stanley Toy, M.W. Kasch, Distributoy, and Tash, to name a few.
Now is the time for one of the remaining wholesalers to get involved so that Mattel can meet its needs and independent retailers can access Mattel products. It could be a win-win if done correctly.
If you are a retailer impacted by Mattel’s new policy, write in and let us know how you plan to manage the situation.
VDI is a preferred wholesale partner of Mattel and Fisher Price. We have grown our partnership since 2019, meeting store needs across the country for Mattel products. We are familiar with the requirements of independent retailers, as we have serviced them since our inception almost 80 years ago. We offer various account programs, allowing each account to choose the best fit for their needs, including a specialty toy account option. Our specialty toy portfolio includes not only Mattel and Fisher Price, but also Spin Master, Westminster, USAopoly, Exploding Kittens, and Bandai. Our friendly and helpful customer service team is ready to assist you in deciding which account is best for your store.
Contact Megan Reddick Waldemer at (800) 274-1095 ext. 262 or custserv@varietydistributors.com
The problem with the model is that large retailers will buy at the same price as the wholesaler. By the time a wholesaler buys the product, pays to ship it to a warehouse, unloads and stores it, and then ships out to a retailer in small quantities the retailer will be buying the product for the same price Walmart is selling it for or more. The retailer will be mad at the wholesaler and Mattel because their customers can just look online and buy the same exact toy for way less. I don’t think the business model works unfortunately.
UPD Inc is Mattel’s preferred wholesale. All customer will be directed to UPD.