TMX Elmo could be called “King Elmo” after claiming the throne as the must-have toy of the 2006 holiday shopping season.
The 10th anniversary edition of the fuzzy red doll was in such demand at the peak of the Christmas rush that it was selling on eBay for as much as four times its retail price of $39.99.
Perhaps that’s why Elmo, when activated, falls down, kicks its legs, scoots across the floor on its back and rolls over in laughter. He is chuckling all the way to the bank.
He costs an estimated $8 to make, and stores get to keep $20 per Elmo, according to Carol Rehtmeyer, president of Rehtmeyer Inc. - an Aurora, Ill.-based toy design and production firm. That means most consumers are paying a whopping 50 percent markup.
The manufacturer, Mattel’s Fisher-Price unit, pays 15 percent of the wholesale price to Sesame Street for use of the Elmo brand. It costs about $1 per unit to market the toy, leaving revenues after expenses of about $8 per doll for the manufacturer, Rehtmeyer said.
Ellie Bagli of Freeman Public Relations, which helped launch the toy, said the phenomenon reverberated throughout the retail industry. “People were referring to it as the Elmo Effect, because it got people into the stores way ahead of what is normally seen as the kickoff to the holiday shopping season.”
Photo by Fisher-Price.
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