Ultra Pro adjusts pricing model
Team,
It appears that Ultra Pro is switching to a variable-cost/market-based pricing model for their evergreen products like toploaders, soft sleeves, and binder pages. Others products like binders and licensed-products are assumed to retain their MSRPs, but that could always change.
This should not be a cause for alarm -- Ultra Pro is not becoming a primary market scalper -- but it explains why prices have gone up in the way they have and why they might fluctuate in the future.
Ultra Pro hasn't made an official statement on this, but some things over the last few months made me go 🛸🧐. Specifically, those things are:
- MSRP bumping up on evergreen products over the last year
- Prices on some evergreen products on Ultra Pro's eCommerce site slowly moving up and over MSRP over the last year
- Ultra Pro removing MSRP notes from product pages on their main website
- Distributor costs going up sharply over the last few months
- Distributors recently listing MSRP of certain evergreen products as $0.00 in their procurement systems
- Cardboard Gold recently stated that they've seen a 6x increase in their freight costs, as well as sharp and sustained increases in material and labor costs over the last two years.
- [update Oct 9, 2021] I found an article on Mayday Games' website that corroborates the Cardboard Gold's numbers here.
Given all this, I reached out to one of my distributors for comment and they confirmed that Ultra Pro was no longer setting MSRP prices for their evergreen products.
Why is this happening?
In a word, uncertainty. If the volatility of manufacturing and shipping costs reported by Cardboard Gold are accurate, and I believe they are, then those costs have become a majority liability for companies like Ultra Pro because they likely cannot predict with any degree certainty what manufacturing costs are from quarter to quarter. This gives companies two choices: eat costs or raise prices. Eating small, temporary cost increases is one thing, but doing that with large, sustained increases over an undetermined period of time cannot work.
It stands to reason that if Ultra Pro doesn't know with any certainty what their manufacturing and shipping costs are being to be, then they can't know with any certainty what their retail costs will be. Removing the constraint of MSRP gives them (and their customers) some flexibility to deal with this volatility and price things on the fly.
In the larger picture this turns uncertainty on its head and creates certainty. After all, knowing something will always be unpredictable is a thing that can be predicted and planned for; a known unknown, if you will.
What does this mean moving forward?
This is will likely cause prices to fluctuate over time and I would expect other manufacturers like Ultra Pro to follow suit. It also may result in temporary shortages at stores if costs spike too high. For example, if my costs on toploaders double, I'll probably pass on a restock because I won't be confident people will want them at that price. In the long run, however, I expect everything to even out and go back to MSRP pricing or some proxy of it.</p>
I can say this with certainty, however. I won't ever engage in predatory pricing and I'll be taking my pricing cues from Ultra Pro and my distributors, not the secondary market.
Rock on, dudes.
-Tim