Are Fans Hurting Themselves When They Pre-Order And Buy From Hasbro Pulse?

I would like to discuss something that has been on my mind for a while, in fact, some of the points I will bring up here were mentioned by me before when I spoke about HasLab previously, i.e. that HasLab is – among other things – primarily a profit margin protection scheme, guaranteeing that something will never ever be submitted to the free market mechanism of supply and demand and thus will never see any discounts or mark downs. But today’s article is based on something UK etailer Kapow Toys wrote on X (still a very silly name, what is Elon Musk thinking?) earlier this week. They complain bitterly about Hasbro in a lengthy post. Click through to learn what Kapow Toys has to say and for a discussion about Pulse!

Collectors among themselves

Buying habits of consumers have changed in the past years, it’s no secret that more and more people buy online and thus it is no surprise that Hasbro’s strategy in recent years puts digital first as well. Hasbro launched their own Pulse platform a couple of years ago and what started out as something of a hobby almost or side business to them is becoming more and more important to the company, with sales on Pulse growing according to Hasbro’s financial statements and becoming increasingly relevant. In fact, even last year, despite terrible overall numbers for the company, Pulse sales grew. That Hasbro is pretty serious about Pulse these days is also seen in them expanding to other territories like several European core markets, making Pulse no longer an US exclusive store.

But that also means Hasbro is now directly competing with independent etailers and stores, not so much Walmart and Amazon maybe. And earlier this week UK etailer Kapow Toys voiced their massive frustration on X.

This is what Kapow Toys wrote on X:

Transformers Legacy Titan Tidal Wave is due to go live on pre-order tonight, here is why you should vote with your wallets and not pre-order it.
Over the last 3 years Hasbro have done everything they can to steer people to their direct sales channel and away from established independent retailers. In trying to do this they have managed to flood the market with products that people either don’t want or just don’t want in the quantity they think they do ignoring all advice and feedback from fans and stores alike.
Transformers Titan Class figures have increased slowly in price with Tidal Wave coming in at a suggested retail price of £219.99.
Hasbro want you to pre-order this item in abundance because we are ”fans” and in their eyes fairly gullible because the last few releases
Black Zarak
Cybertron Metroplex
Decepticon Nemesis
The Ark
Autobot Guardian
have all appeared at half price or less in under 6 months of their initial release with Black Zarak being as low as £69.99 from the Entertainer.
Vote with your wallets, don’t give Hasbro the satisfaction of continually preying on your support for an intellectual property you love.
We won’t be pre-selling Tidal Wave, if it’s available at clearance which is highly likely then we will carry it and bring it to you guys at a reasonable price whilst saving you the pain of finding it on Pulse for next to nothing in a few months.
Hasbro thought we were going to be able to presell 200 units of Tidal Wave to you guys even though we communicated the last 2 releases were horrendously overpriced with little to no interest outside of completist collectors.
It’s fair for a company like Hasbro to want your money, what isn’t fair is the continual abuse of fans goodwill.
Enough is enough!

Now while this is about Transformers, this may still sound all too familiar to Star Wars collectors too, because overpriced deluxe figures or playsets and other items almost inevitably can be purchased for much, much less a few months after release. Unless of course it is a Pulse exclusive item you can buy nowhere else.

What Kapow Toys are revealing here is that Hasbro wanted them to order a pretty high mininum quantity of Tidal Wave, something that, if you read between the lines, would have meant a financial loss for Kapow Toys, because most people would not buy the figure at full price from them and Kapow would have to eventually offer discounts, destroying their own profits and in conclusion even giving them a loss, and that is something an independent etailer cannot afford, they are neither Amazon nor Walmart who can have loss leaders (things that do not make any profit, but with the stores hoping you buy other stuff in addition which in return will give them a profit) and who also almost certainly do not have agreements with Hasbro about sharing the burden if something has to be sold at a loss because it would not sell otherwise (and they have to empty the warehouse), but which is something giants like Amazon or Walmart certainly do have.

The general question is if collectors are actually hurting themselves when they buy from Pulse and even more so when they pre-order at full price from Pulse.

Pulse is not only directly competing now with independent stores and etailers, Pulse is also an excellent profit margin protection scheme, just like HasLab. And on top of that Pulse is also giving Hasbro’s margins a massive boost, so it’s also a profit boosting machine.

Collectors pay full MSRP on Pulse. But with Pulse Hasbro does not have to sell their toys at wholesale prices to etailers and retailers. In short: when Hasbro sells a figure through an etailer like Kapow Toys they have to share profits with Kapow Toys, the store wants to make some money too, after all, but when Hasbro sells something on Pulse they not only get 100% of the profits, they also get much, much higher margins, because there never was a need to sell something at wholesale prices to stores and etailers. Hasbro gets its cut and the cut the retailer would have gotten on top of any synergy and cost saving effects selling something on Pulse may have.

And Hasbro can control prices on Pulse however they see fit. Even more so for Pulse exclusives. Now as long as you can get the toys also from etailers Pulse has to compete unless Hasbro wants to sit on a stockpile of unsold toys if they don’t eventually offer some discounts too.

As you can see it would be in Hasbro’s own best interest to get fans to buy from Pulse, instead of buying from independent stores. It’s more money for them. And they are in complete control over pricing and discounts.

So they now offer time exclusive windows of opportunity to pre-order from Pulse, where you can only pre-order from Pulse, they even offer a premium program for that where you pay Hasbro for the privilege of having first access, hoping they induced enough FOMO in collectors during the livestreams and fan events that fans pre-order the instant something goes live. And stores like Kapow Toys eventually sit on stock they cannot move because everyone else is not as crazy and would ever buy a 220 pounds Transformers figure and patiently waits for the inevitable discounts.

This brings us to the big question: are collectors hurting only themselves by buying and pre-ordering from Pulse? An argument can be made that yes, absolutely, fans will only contribute to ever increasing prices and more and more Pulse exclusives if they keep buying directly from Hasbro. And they may very much contribute to the elimination of the competition.

In light of the upcoming Star Wars livestream on Tuesday you can bet that most (non store exclusive) items will be available for pre-order on Pulse first, at least for a short time. Hasbro is counting on collectors with too much disposable money to buy at full price. When the smarter strategy is to just play the waiting game and to wait for discounts… of course this always has the risk of something actually selling out, FOMO at work… and Hasbro knows this. Now some people make the argument that you should “support” a toyline by buying full price, which, in my opinion, is delusional nonsense. You do not have to “support” anything. Either Hasbro makes good product at compelling prices that can sell… or not. But to buy overpriced nonsense in the hope that Hasbro may make that thing you want further down the line because you bought all the full price nonsense before is peak self harm and stupidity, if I may be so blunt. I do not want to insult anyone here, but this argument really is stupid. But Hasbro sure are counting on people like that, especially with Pulse. Their brand managers and other people in charge are not fools, they know very well how the psyche of the (hardcore) collector works. Do not let FOMO fool you. Your life would not be worse off if you didn’t get some plastic toy.

In my opinion both HasLab and Pulse actually hurt collectors and do more damage than good. A 5 billion USD company should not require fan funding first to make a toy, they should bear the full risk of making something, But they don’t want any risk, they want profit. And a 5 billion USD company should not screw over their retail partners so that Pulse comes out on top, making fans pay through the nose for something. We can still get almost all things from regular etailers… but what happens once a few more etailers go out of business or more and more items become Pulse exclusives?

Using Pulse also supports Chris Cocks’ insane strategy to increase margins to over 20% across the company. And as mentioned using Pulse will inevitably also hurt independent stores. But most of all it will hurt your own wallet.

So I think Kapow Toys, even if they have an agenda of their own, they want you to buy from them after all, instead of Pulse, is in the right, it would be best not to pre-order overpriced plastic toys from Hasbro on Pulse. Do not let Hasbro circumvent the free market and rules of supply and demand, everyone is in agreement that Hasbro’s prices are way too high these days, inflation or not. But the only way to get Hasbro to adjust things is if you do not pre-order overpriced things no one really needs, and doubly so if you do not pre-order directly from Hasbro themselves by using Pulse. And Kapow Toys is also doing the smart thing by playing the waiting game, maybe buying that Tidal Wave Transformers figure once it’s available at clearance prices from distributors or Hasbro themselves so they can sell it at a realistic prices and make a profit. If all etailers were in agreement here and fans also stopped buying directly from Pulse Hasbro would have to change their strategy again. They would not ever cancel something like Transformers or Star Wars. It could result in lower prices again, however.

Last time I checked something like the “deluxe” Black Series figure Cobb Vanth can be bought on Amazon US for $22, down from an original MSRP of $34. The Saw Gerrera “deluxe” figure is even a ridiculous $8.54, instead of $34. Anyone who pre-orders anything anymore, especially from Pulse, should remember this. And if it’s a Pulse exclusive? So be it. Do you want Hasbro to change strategy again for the benefit of fans? Or are you ready to cough up more and more money in the future? As usual the decision solely lies with the consumer.

What do you think about all that? Leave your own thoughts in the comments!

Addendum: isn’t it peculiar how the champion of low and fair prices, McFarlane Toys, recently revealed a wave of McFarlane Toys online store exclusive DC figures that cost $40 each? When a regular DC figure from them is still usually just $25? And the new figures are not even really new, most of them are kitbashed and reuse parts from old figures. Fans of the DC multiverse line are also not amused and they too discuss a boycott. This can still all be stopped by simply not pre-ordering and buying something.

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