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June 30, 2013

Why I'm Canceling My Wholesale Kidrobot Account

Last week I had an interesting conversation with a high-level Kidrobot employee regarding their products which I can (or cannot) purchase from them. The end result was that I decided to stop supporting Kidrobot by being one of their retailers. Or, in other words, I asked them to cancel my wholesale account.

I can imagine this statement would inspire a range of responses:
"I'm not surprised," some of you are thinking.
"That's insane" might be a response from die-hard KR collector.
"Who cares?" is probably what many of you are thinking.

See, as a retailer, canceling your wholesale account with a vendor is pointless- you never need to do this. You can keep your account open and just never order. It would have the same effect: no new products from that vendor in your shop.

So what's the point of me doing this, and why am I telling all of you in a blog post?

The act is symbolic. I need to make a statement which shows Kidrobot that their actions over the past 5 years or so have negatively impacted active members of our art toy community.

We were granted a Kidrobot wholesale account just prior to the release of Dunny Series 2. At that time, there were not very many store stocking Kidrobot toys, or art toys in general. The market was wide open, lots of interest from collectors, not much competition for my new business. For several years, Kidrobot was my bread and butter. I sold a whole mess of 3" and 8" Dunnys and the sales of those products allowed me to stock other, less well-known products. It led to my support of emerging brands and emerging toy artists.

Dunnys also acted as a gateway drug for toy collectors just getting into the scene. They could go on the forums, read about how cool everyone is, and figure out which artists to collect. Dunnys led collectors to new artists. I owe a lot to Kidrobot. I think we all do. If you sell art toys, many of your customers started out collecting Dunnys.

Everything was copacetic for a couple years. During 2007 & 2008 I made enough money selling stuff online to allow my wife to stop working for 2 years and attend school to get an advanced degree.

Things changed a little in there somewhere, though. Lots of competition sprouted up and Kidrobot's sales increased dramatically, and they started making decisions about the direction they were heading. I am told that they had numerous high-level meetings about how to control and advance their brand, and the end result was Kidrobot decided to focus on their brick & mortar retailers, giving them an advantage over their online retailers. I assume this is because they felt the online marketplace was diluting their brand, and that it took a lot more dedication to run a brick and mortar. Owners of physical shops have a heavily invested interest in the Kidrobot line. (The sad thing is: so did I.)

And so around that time began a series of retailer rule changes that systematically deprived me of being able to turn a profit on their products:
  1. Wholesale accounts cannot sell Kidrobot products on eBay.
  2. Wholesale accounts cannot sell the Kidrobot blind-boxed items as open-box.
  3. Online retailers only get access to certain designated items. No more sales of 8" Dunnys to online-only retailers.
  4. Brick and mortar retailers granted a free "case exclusive" Dunny to give to buyers of Dunny cases as a reward for their purchase.
Initially as I was thinking about creating this post, I thought I would be focusing on how each one of those rules affected my business, and really how ineffective each one was. But I am not here to judge Kidrobot- these are, after all their products and their business model. We can all agree or disagree on the effectiveness of each of their decisions, but really that's not the point.

The point is: my business was affected negatively.


In speaking to the Kidrobot employee, one who has been there a long time, is extremely friendly and personable, and was genuinely concerned about this issue, it became apparent that he would not be able to change any of these retailer rules, and that my own personal experience with my shop's diminishing KR sales was in fact the eggs that broke when Kidrobot made the omelet.

Translation: "Sorry, dude. I wish I could help you but the rules are the rules."

That's fine. I had a feeling he'd say that, and I knew what my response would be: to cancel my wholesale account.

I got into selling art toys as a collector in 2004. We started on eBay. I knew nothing about building a website, branding, accounting, fulfillment, sales, html or anything a normal businessman would know. I learned everything on my own. I started a (shitty) website to direct my eBay customers to and eventually 98% of my products left eBay and were sold instead on TenaciousToys.com.

I live in Manhattan. Rent is extremely high here. So while I have been dreaming of opening a storefront shop here, I can't afford it. $2500/month rent minimum, plus other expenses, means it'd cost me $3500/month just to have it open. Due to the sometimes not-so-great margins on art toys, I'd have to make $126K in sales per year just to BREAK EVEN. Without being too specific here in public, I feel comfortable telling you that I have only made sales like that in one year of my 8 years in business, and that was a year when I could sell whatever KR product I wanted, wherever I wanted.

My point is that I am, in fact, fully invested in the art toy business, at least as much as any other shop out there, brick-and-mortar or otherwise. My own personal feeling is that I should be given an equal opportunity as any other Kidrobot retailer to try to make a profit off of their products. Kidrobot feels otherwise.

So in these 8 years, as I have transitioned from an art toy fan into a businessman who sells art toys, I have become much more aware of watching my bottom line. And when I find that a product line is simply not profitable, no matter how much I like it, I cannot keep selling it. I've abandoned dozens of product lines over the years. Kidrobot just happens to be the biggest, most obvious, most pivotal of these. I didn't write any blog posts about the others because it wouldn't have mattered.

But you, as an art toy collector, or a shop owner, should know what I'm doing, how this situation has affected Tenacious Toys.

I have noticed a decline in sales of Kidrobot products for the past 4-5 years. It's been steady. Every rule change forced my KR sales down. It became intolerable to me when I received my shipment of the 2013 Dunnys and did not sell ANY to my regular customers. When I complained about this on Facebook, two artists took pity on me and bought a few blind boxes. That, to me, is just sad, and it indicates to me that the Kidrobot product line isn't a safe bet anymore like it used to be.

This year I began selling hand-made custom and resin mini series on my site, a schedule which I've branded "Super Series Sundays." Today I released a resin figure called "Little Ox" which was made in Scotland by Creo Design. Several of my Super Series Sundays releases have sold out. This is what I want and need as a businessman- special, exclusive items that can only be found on my website. I cannot pay money up front to a company whose products do not sell on my site.

As a businessman, I had to make what my dad calls "a command decision" and so I did.


I still do have Kidrobot products in stock (2013 Dunnys still haven't sold!) but as I phase these out, they will not be restocked.

To my customers: I am sorry, but in the future you will have to purchase Kidrobot products elsewhere. There are tons of other great retailers that sell Dunnys.

To the other shop owners: Congratulations. I just reduced your competition by one.

To Kidrobot: Sayonara. It's been fun. Good luck.

To the toy collecting community: I am honestly not sure how all of you will take this. I'm too close to the issue to look at it objectively. But no matter how you feel, leave a comment about it under this blog post. I promise to publish all of them, whether you agree or disagree with me.