It’s the weekend! A great time to start peg hunting.
You wake up in the morning with hopes of getting your desired Hot Wheels castings.
After reaching shops, you find dead stocks, already-opened cases with fantasies, and worst of all, shop owners asking you to buy your favorite diecasts at a higher than MRP (Maximum Retail Price).
You’re not alone. Many collectors feel that they are cheated by the whole system of shopkeepers, scalpers, and resellers.
However, Mattel has come up with countermeasures to stop these bad practices.
Check out the new Mattel notice to the distributors.
What do these mean for you as a collector? Does it mean better availability, better pricing, or an end to scalpers?
Let’s learn what it means for you.
But, before we do, let’s learn about Mattel’s position in the Indian market.
Mattel In India
Mattel products have always been available in India for the last couple of decades. If you browse social media platforms such as Reddit, you’ll see old collectors share pictures of Hot Wheels at 99 INR or lower.
In addition to a lower price, it was not hard to get Hot Wheels at all.
You can find Hot Wheels in every mall, toy store, or even gift shop. There, you can stand and admire each casting before choosing to buy it. No FOMO (Fear of Missing Out) or no stress of second-guessing yourself.
However, this changed drastically after COVID-19 hit India.
As soon as COVID hit, the world came to a stop. Mattel, sensing low demand, stopped importing Hot Wheels or other Mattel products.
However, these periods were met with the rise of importers and resellers who would import their own stock to meet the unfulfilled demand.
This continued till 2023, when Mattel decided to renew the license, only to meet the new BIS licensing for toys (first released in 2020), which requires toys imported in India to meet the standard set by the government. It is mandatory.
According to me, BIS is an unnecessary step and makes importing toys by companies like Mattel more complicated.
Bureau of Indian Standards (BIS) licensing made things complicated. The key reasons include:
- BIS certifications need to be renewed every year.
- If a toy company releases different product variations (SKUs), they need to apply to add new variants under the existing BIS registration, lengthening the process.
- BIS certifications cost money and add a burden to the buyer as companies push the extra cost to the end user.
If you had noticed, Mattel has released a plethora of different variants, such as F1 Premium, Team Transport, and Diorama set, making sure that all sub-variant products get BIS approved as they continue to commit to India, which is also reflected by their new BIS license renewal a few days ago.
What happened and why it happened
The one-page notice is a reminder to distributors about the malpractices that are currently carried out in the Indian scene.
Mattel India has to “remind” their chain of distributors of company policies and applicable legal provisions, especially reminding distributors not to sell above MRP.
But what made Mattel release the notice? What made them care?
Mattel or any company would release such a notice if things are not going legally or according to company policies.
Let’s dive deep into what’s actually happening on the ground level.
1. Hoarding of stock
Mattel releases a wide range of products, ranging from basic Hot Wheels cars and Barbie dolls to other ranges of toys such as UNO.
Not every stock is in demand when it comes to toys.
However, Mattel’s Hot Wheels brand has its own demand.
Distributors are known to hoard stock to create artificial scarcity. This happens to hyped castings or sets that came in limited quantities to India.
This happened to the Hot Wheels Premium Circuit Legends set.
The set contains 5 hyped castings with a price of 549 INR each ($7 approximately). And, the most hyped car in the set is the Ferrari 499P, a sports car, winner of the 2023 and 2024 24 Hours of Le Mans. It’s part of history and good enough to be hoarded by the DISTRIBUTORS.
Yes, you read it right. Distributors hoard the stock and only release it in small quantities.
This leads to an increase in demand, which leads us to the 2nd problem.
2. Using Proxy to Sell Stock above MRP
One of my sources revealed that distributors are using a proxy to sell their stock at higher MRP prices.
They keep the person as a gateway to sell the hyped stock, ensuring that they are not dealing with the person right away.
That’s a huge problem in the distribution network as it directly impacts the end buyer, which Mattel doesn’t want.
A distributor’s work is to act as an intermediary between other distributors, retailers, and manufacturers and ensure that the item reaches the customers. In some cases, distributors sell to direct consumers as well. They excel at managing inventory and logistics with a focus on the timely delivery of goods.
But why am I explaining all this? That’s because distributors are engaging in these illegal activities, which they didn’t sign up for. These results in the following:
- Selling above the Maximum Retail Price printed on the product pack.
- Engaging in malpractices that directly impact the image of Mattel, as they are responsible for ensuring proper distributions, and hence need to make sure that the assigned distributors follow the policies and laws.
- Breaking the trust that Mattel has put in the distributors to carry out the operations within the legal framework.
3. Selling above MRP
During peg hunting, I found many local toy or stationery shops that sell Hot Wheels above MRP.
When arguing about the MRP rule, they candidly shared their side of the story.
“Sir, we get the items at MRP, and hence have to sell above MRP to make a profit.”
They also added, “The distributor tells us to take stock if we agree. If we don’t agree, they tell us that someone else will take it.”
This sums up the current situation with the local shops.
I am pointing out that even shopkeepers are suffering from the missteps taken by the distributors, who only want to maximize profit by participating in illegal activities such as hoarding and selling over MRP.
4. Selling to resellers/scalpers circumventing the normal supply chain
The secondary die-cast market in the US is huge.
According to Market Research Future, the diecast market size is estimated at 11.71 (USD billion) in 2024, with a prediction to reach 14.90 USD billion by 2035. Even though the overall year-by-year growth is slow, it shows the strength of the secondary market that Mattel or other diecast brands cannot ignore.
I am talking about the secondary market because of how it impacts you as a collector.
Like other points, distributors in India are trying to circumvent the official distribution channels to make extra bucks by selling over MRP or bulk selling to resellers/scalpers, making it hard for end customers like me and you to get the castings.
Many shops don’t sell above MRP, but they do sell in bulk to buyers, impacting the end user.
Hamleys, owned by Reliance Retail, participates in these practices, leaving nothing for the actual collectors.
They don’t sell over MRP, but what they do is sell in bulk to resellers and diecast groups that have their own audience to serve too.
However, they don’t do it for all diecast brands. Only Hot Wheels, and that too ONLY hyped castings.
Fantasy castings, non-wanted team transports, and 5-packs are all sold behind the door to bulk buyers.
But why would they do it? Why don’t they just sell it to normal collectors? What do they benefit from this practice? Well, that’s a topic for another day, which I will soon cover on Maxdiecast.
What the Notice changes
Nothing. Yes, you read it right.
However, it’ll surely impact how distributors work with Mattel.
As for collectors, like you and me, things will stay as it is.
At the time of writing, the notice has been out for 2 months. On the ground level, there is no change whatsoever.
That’s why, I recommend to check for alternatives to Hot Wheels.
It’s not hard to believe that most of the Hot Wheels stock goes to scalpers and persons who are in close connection with the distributors.
For normal collectors with no or few connections, you need to depend on luck or wait for the hype to die down before gaining access to
Do you think that it will change anything? Comment below and let us know. If you want
