Amazon's top brand laid off more than 700 people!

Amazon's top brand laid off more than 700 people!

Another Amazon brand laid off more than 700 employees!

The toys category is selling well and employees are being laid off frequently.

As a key category on Amazon, toys have always held an unshakable position in the hearts of consumers, and even without promotion, sales are still very impressive. Especially during peak seasons, toy brands always deliver impressive results.

At the height of the peak season, the parent company of Playmobil, a world-renowned Amazon combination toy brand, has begun to lay off employees. Prior to this, Funko, another frequent Amazon BSR customer, also fell into trouble, losing more than 100 million US dollars in half a year.

Which toy products are the most popular at the moment?

Playmobil's parent company lays off employees

When talking about hot-selling categories on Amazon, toys are definitely one of them. During last year’s Cyber ​​Monday, online sales of toys alone increased by 383%. The hot sales of products including puzzles, Rubik’s cubes, assembly toys, and Lego blocks are enough to prove the popularity of the toy category, but the situation of many brands has changed recently.

Affected by the continued decline in sales, Horst Brandstaetter, the parent company of the global best-selling toy brand Playmobil, suddenly announced that it plans to drastically cut 700 jobs by 2025, accounting for about 17% of the company's total headcount.

When it comes to Playmobil , some people may not know much about it, but this company is a real giant in the toy industry.

In 1974, Playmobil was officially launched; it was sold globally the following year; in 2013, sales exceeded 550 million euros; in 2014, it surpassed Lego and became the top combination toy brand in France; in 2015, no less than 2.9 billion Playmobil dolls were sold all over the world. If these dolls were held together, they could probably circle the earth 3.6 times, which is enough to reflect the popularity of Playmobil products.

With the ability to freely create game time and scenes and allow children to give full play to their creativity, Playmobil has captured a large number of children and even adults. Its products have also extended from the original knights, Native Americans and construction worker sets to a variety of characters, accessories, buildings, vehicles and even animals.

On platforms such as Amazon and Walmart, Playmobil is one of the well-known leading brands. Not only does it have a wide range of products, but many of its products are also best-sellers on Amazon. Consumers also speak highly of its products: "It is more cost-effective and durable than Legos of the same price", "Children can go on mental adventures", and many families not only buy them for their own children, but also buy them as gifts during holidays.

In 2017, Playmobil produced 34,000 Martin Luther statues, and the original batch sold out in three days. To expand the company's products, Playmobil also cooperated with well-known brands such as "Ghostbusters" and "How to Train Your Dragon" to produce related toys. The popularity of Playmobil products has remained high.

However, like many brands, Playmobil has also been affected by the overall environment. In the 2021-2022 fiscal year, the company's operating income fell by 2.8% to 7.36 euros. In order to save the company's business or transform it, the parent company began to lay off employees.

The decline in revenue and profits is reflected in many categories. In the toy category, in addition to Playmobil, Funko is also a representative of losses.

With losses exceeding 100 million US dollars in half a year, can Funko maintain its stability?

It took Funko five years to go from obscurity to fame. In 2021, Funko's annual net sales reached US$1.029 billion. Although it is far less than many top toy manufacturers, Funko was once considered by industry insiders to be the toy brand with the most potential to catch up with the top players.

As a company whose main business is to produce trendy toys, Funko holds multiple IP licenses. Relying on its collaboration with movies such as "Squid!", "Golden Girls" and "Transformers", Funko has developed a number of licensed action figures. Due to the popularity of the movies and a strong fan base, the sales of these products are also considerable.

Funko products are not only popular on independent websites, but also on Amazon. On Amazon, many of Funko's toys are ranked at the Amazon BSR, and the product reviews are basically over a thousand, and some even have over ten thousand reviews. Many fans love Funko products.

But Funko's recent report card is not ideal. In the first half of 2023, Funko's net sales were US$492 million and its net loss reached US$137 million. Compared with the net profit of 30.311 million in the same period last year, the performance was dismal. You know, in 2022, Funko's revenue and net profit were already in a state of rapid decline. It can be said that the first half of this year has not reversed Funko's decadent performance.

Looking at the trendy toy category, sales in the first half of the year accounted for 72.6%, reaching $357 million, a year-on-year decrease of 24.4%. The financial report was lower than expected, and the stock price was also hit hard. From 2023 to August, Funko's stock price fell by more than 50%. The high inventory also strangled Funko's throat. As of the first half of this year, Funko's inventory was as high as $187 million.

Like Playmobil, Funko began to lay off employees in order to change its current revenue situation. The July report showed that the number of layoffs submitted by Funko was about 180-200, accounting for 12%-13% of all employees.

The two toy giants’ revenue and profits are both disappointing, which makes industry insiders wonder if the toy category is no longer viable?

This is not the case. According to relevant data, the global toy market is worth $103 billion in 2022 and is expected to reach $143.6 billion in 2028. Many Chinese sellers have targeted overseas markets and have also made a name for themselves.

Google Trends shows that in the past 12 months, the search popularity of words related to "Children's kitchen toy" has remained between "25-100", and the popularity of related words including cooking, Game house, children's wooden kitchen, etc. has continued to soar. At the same time, the demand for children's kitchen toys in overseas markets is also increasing.

Among them, demand in the United States and Europe is growing rapidly. Take role-playing toys as an example. The overall selling price of toys such as doctor consultation and kitchen cooking on Amazon is not high, mostly between US$6 and US$50, and the order volume is mostly in the thousands or even tens of thousands. A seller selling children's role-playing toys said that his monthly sales are stable at around US$700,000, which is not bad.

Searching the term "role-playing toys" on Google yields 515 million results , which is enough to show the hot-selling trend of toy categories, such as kitchen cooking toys, medical set toys, children's supermarket sales set toys, etc. Toys that can train children's living skills and give children close to real-life experiences are highly praised by overseas parents.

In short, the categories of toys and games are quite broad. In addition to focusing on movie-related theme toys, sellers can also pay more attention to educational and general toys, which are relatively popular. Trends are constantly changing and updating, and sellers also need to choose more creative and educational popular toys to bring a high return on investment . Of course, sellers also need to pay attention to infringement and related products that Amazon prohibits from selling.

Amazon

Toy

Playmobil