It never rains, it pours…literally in the case of the Zhengzhou region of China, where biblical floods have created further havoc with the global supply chain this week. Thankfully, there are very few toy factories located in the area (it’s mostly furniture manufacturing facilities), but I gather some factories making toy components are based there, so there could yet be a knock-on effect on toy production over the coming weeks. Plague, floods, record temperatures, burning seas…it’s all getting a bit apocalyptic. And is it just me or does Dominic Cummings look like one of the Four Horsemen…?
Elsewhere, those modern-day highwaymen – shipping companies – have decided that despite making record profits, it still isn’t quite enough. Posting on LinkedIn, Zuru’s Nick Mowbray highlighted an email he had received from Hapag Lloyd, informing customers that it would be introducing value added (VAD) surcharges of up to $5000 per container as a result of “operational challenges”. Come on guys – at least Dick Turpin wore a mask. The random surcharge currently applies on the Far East to US & Canada routes, but it would be the least surprising thing ever if it was applied to European routes as well. For context, this random ‘extra’ charge is almost double the cost it was to ship the entire container a year ago. If there is any value being added, three guesses where it is going (checks to see if any pension funds are invested in shipping company stocks…).
Of course, there are two sides to every story: some people associated with the shipping sector have pointed out that shippers have faced huge losses over the past few years and suppliers weren’t exactly complaining at the cheap rates they were getting then. That said, the majority of the comments from the toy community on Nick’s original post were a mixture of outrage and weary resignation.
Governments seem reluctant to step in as yet, but if – more likely, when – this leads to global inflation, perhaps they will feel they have no choice but to intervene? When the cost to ship the container is more than the value of the goods inside (as can now often be the case), surely we’ve reached a tipping point? In the end, it’s all about balance and finding an acceptable via media: it was clearly unsustainable for carriers to operate on rock bottom rates, but now the pendulum has swung to the point where it’s unsustainably high. Undoubtedly, shipping companies are facing increasing costs themselves (fuel, warehousing, advance costs of ordering new containers and vessels to increase capacity); however, announcing multi-billion profits before jacking up prices even further does seem a bit tone deaf.
Another company which consistently fails to read the room (and loves to take the p*ss) is our old friend Amazon. We were contacted this week by a seller who had found themselves in the unfortunate situation where Amazon took the decision to place one of their lines on clearance, then informed the business that unless it lowered its own price to match – which would have equated to just half its cost price – it would no longer be able to sell the toy on the site at all. Manipulating the market or what?
Even more frustrating, the situation arose because Amazon wanted to clear a product that it deemed wasn’t selling – but it wasn’t selling due to Amazon disabling the listing due to a lack of compliance information (although the manufacturer uploaded it multiple times, ‘computer said no’ apparently struck again). But rather than them realising that it was a product they sold and contacting the manufacturer to resolve it, they just kept cutting the price. Madness.
There are rumours that the CMA (Competition and Markets Authority) is planning to investigate Amazon over price manipulation: if such an investigation does go ahead – as I believe is already happening in the EU – then I have no doubt there will be plenty more examples of this kind of activity. Whether deliberate, inadvertent or a bit of both, it does seem that Amazon is beset by problems, many of which are of its own making. Take, for example, the fact that nestling in the Amazon toy top sellers list currently is the charming “Notorious Serial Killers – A Killer Trumps Card Game.” Imagine a child going through the Amazon toy list and coming across that: “Mummy, who is Jeffrey Dahmer?” You wouldn’t get that in the Argos / Smyths / Toymaster catalogue, because these retailers take their responsibility seriously and exercise control over their toy offerings. It is the same lack of control or shirking responsibility that we have previously seen with Amazon on unsafe toys and fake brands – “not our problem guv’nor, it’s down to the sellers.” Except, it shouldn’t be, not really…
This is yet another own goal from Amazon…. they’ve scored more own goals in recent years than all the teams at the Euros put together (and there were plenty of them). One wonders how this product has not been auto blocked under Amazon’s Offensive and Controversial Materials Policy, which includes the specific line: “Amazon does not allow products that promote, incite or glorify hatred or violence.” Strangely, from what I hear, the algorithm mainly ends up blocking legitimate products that don’t present any issues, rather than ones which really should be removed. Using robots is fine, but maybe best for a human to check occasionally to make sure they’re working correctly, eh?
Finally, though, some good news – after decades of American cartoons coming over here and corrupting the way our kids speak, the UK has struck back…and we have good old Peppa Pig to thank. A truly heart-warming article in the Wall Street Journal this week reports that as a result of binge-watching Peppa over the past year, scores of American kids are now speaking with a ‘posh’ British accent and using words and phrases their parents have never heard. They think their parents are drinking tea (not coffee), they want to bake mince pies for Father Christmas (not Santa), go on holiday (not vacation), push a shopping trolley (not cart), go to the optician (not eye doctor) or petrol station (not gas station), eat biscuits rather than cookies…. one child even referred to a power cut instead of a power outage. Americans, you’re welcome. It is, after all, the Queen’s English…