“Steve AKA: Poppa” pointed in a recent comment that the HK couple seems to be taking pre-orders for another 28-ish Motor Speedway of the South set.

Most interesting.

Real, Fake, Counterfeiting or Something else?

As we noted in our Top 10 Rarest Post, this is an interesting new phenomenon in collecting.

Back in the old old days, pre-1975, no one really bothered to counterfeit toys. It would be like counterfeiting a grapefruit or counterfeiting a $1 dollar bill – why bother? The “fake” you create would take you tens or hundreds of hours for a miniscule return.

After the mid 1970’s when some older baby boomer toys from 20 years prior in MINT condition or a MINT box might start to fetch thousands – people would try and fix up older figures (GI Joe, Barbie) by pulling together a mint box with a fake outfit or even make new accessories because some particular Joe or Barbie was worth hundreds and later thousands but these were one shot deals – while there were small companies that might try and knockoff the latest Batman or Superman action figures by altering the logo slightly, etc … but it wasn’t cheap to make a mold, inject plastic and paint it so the knockoffs were easy to spot.

And without a WORLDWIDE market like eBay, while people who worked at the factory could collect prototypes that thrown away, or the first few off the assembly line that got rejected and tossed, without the eBay/online auction marketplace, you had to work pretty hard to sell anything and conversely, only a small rabid core of collectors could even keep track of what was out there. For instance, pre eBay, a company might release a special variant in US shipments that was 1 to 10 boxes … so maybe you could get lucky – you knew it was valuable but how much value? Unless you went to toy shows and swap meets and read all the fan mags sometimes literally stapled together, value is only determined when there is an on-going marketplace …because if you can’t readily find someone to sell it to … though conversely, that same action figure 1 to 10 boxes may have been 1 in each box in Europe so in the US, it might’ve sold for $25 but in Europe, maybe $2? Now, it’s totally different. The world is one big auction click away.

So – the shortcut to making toys is. Client approves design. You make a mold – you do some test ones to make sure mold is correct and client approves final, final including not just design but color and accessories, etc … now, of course, you don’t fire up a machine to make one – the natural course is once it’s fired up, you make a couple dozen or even hundreds and you shut off the machine. Some will just look like lumps of plastic or lumpy metal – after a few are churned out, they start to look right, you pick out a few to forward to the client. The rest get tossed back to recycle or the garbage and of course, some get plunked out of the garbage and onto the world auction markets. These are unpainted or whatever color is in the paint area, etc, etc …

So, back tracking a bit – as toys and eBay leveled world pricing, you had more customs. A toy line sometimes doesn’t get around to a crucial figure before they stop selling or it’s just fun to have (I have a Homer Simpson painted like Captain Kirk). While these could be an infringement, with “art,” there’s a fine line between a soup can and an Andy Warhol painting.

While corporate lawyers like to believe everything is a trademark violation or requires a DMCA takedown (well at least in the US), the truth is that a trademark violation is more narrowly defined, it’s only a trademark violation if it causes confusion … for instance, I can draw or photograph my own Mattel Disney Pixar CARS because there is no LEGALLY DEFINED confusion between a 3-dimensional diecast toy car and a 1-dimensional representation of it. But of course they usually count on the fact that their legal department is better funded than you are so most people are quick-twitch to pull down anything down.

So customs that you see people handpaint are generally ignored because a) small potatoes, b) quasi legal under doctrine of first sale for most items (you buy it, you can re-sell it – there are some exceptions) and c) as long as there’s no misrepresentation and clearly stated it’s a custom …

So, why do I bring this up?

Because the overseas auctions for the Mattel CARS are not quite counterfeit (not created in a different factory by reverse engineering the items), not prototypes or test rejects and not officially stolen.

Perhaps we need a new name for them – Unauthorized Factory Versions.

Creating a diecast car is not as easy as it looks. It takes a myriad of steps from making the metal base, painting (dipping or electrostat), drying, cleaning, applying tampo decals, painting, adding parts, riveting and finishing (drying, cleaning, etc ). Even if you owned the factory or ran the assembly line, would you be able to do all that? Now, once you get started, if you make 500, you might as well make 25,000.

So, this is definitely not someone picking up an extra shell of Lightning McQueen and applying some paint and stickers for his eyes … no, this requires real work.

Just as with the extra and different color of McQueen – it’s one thing to dip or electrostat (Ransburg) of a color Mattel ordered but it’s another to be able to switch out from the Chuki paint to doing a few dozen Lightning McQueen’s … is it someone who works at the factory?

If it was – I would say they are pretty brazen and they are obviously not just an assembly line schlub. They clearly need someone who can approve and order a few dozen or more employees to continue the assembly process. After all, the guy who rivets is probbaly not skilled enough to paint Dale Jr’s stripes …

So, in theory, the evidence points that the two sellers do NOT work at the Mattel factory but merely have access to a higher up who works there … and a higher up they don’t care if they get fired – because it would seem that by looking at this couple’s FLIKR site, you should be able to pretty much determine which factory is assembling the specific lines but Mattel might not care or maybe they are not willing to antagonize that factory. After all, they are literally cranking out millions of CARS, Hot Wheels & Matchboxes for Mattel – what’s 50 or 100 that tumbles out the front reception area?

And of course, now we cycle back to the new Factory Unauthorized Motor Speedway Sets … what does it mean?

You could argue many things:

MATTEL IS GOING TO RE-RELEASE THE SET?

Yea, I said it.

Unlikely but possible. Mattel made about $300,000 ($299 sets, 1,000 sold) in about 2.5 hours … they probably easily left another $500,000 on the table (presuming they could easily sell another 2,500 sets – though probably requiring a few extra days).

Of the 900ish sets out there (I’m presuming 50-100 were held back), how many are diehard collectors who would be so mad they would place a hex on Mattel and cast their Motor Speedway set out the window? A couple hundred? And maybe another couple hundred out of the 900 would be annoyed and vocal but would ultimately just shrug? What is the total CARS potential audience for this set? Whatever that number is, it’s much greater than 200-400 mad/annoyed current collectors versus making how many more people happy? (and by happy, I mostly mean putting $500k into Mattel’s coffers … you know, that kind of happy 🙂 )

The bad news is that it’s definitely not going to be $299 and it will be priced higher.

Sure, Mattel said that it might be some of sort of exclusive but then they think the 6th appearance/packaging version of the Al Oft the Blimp qualifies as “new.”

So, maybe there’s no track or there’s a sticker that now reads HOLIDAY VERSION.

I should point out that I DO NOT KNOW ANYTHING. If I did, I would tell you. I paid $299 for mine – a high price but the other day in SF, I spent that on lunch & dinner … so, hey whatever. I didn’t buy it for investment so I don’t really care all that much – whether it goes to $2k or falls to $99, it’s all pretty much the same to me … okay, if it goes to $5k,  🙂

But why do I bring up the possibility of a second appearance?

I find the whole two-month period for pre-sale kind of odd (term of auction – buy set, pay now – get it in 2 months) … because if I had access to the factory where I could “order” dozens of people to:

“… making the metal base, painting (dipping or electrostat), drying, cleaning, applying tampo decals, painting, adding parts, riveting and finishing (drying, cleaning, etc ) …”

FOR 36 DIFFERENT CARS and re-create the base & display case AND the outside paper box EXACTLY as Mattel ordered it – why stop at 28? Why not 100? Or 200? That’s 28 x $1,000 or $28,000 in revenue!!! …You can do the math if you continue their putput number to 200 🙂

Why stop there? Once you start up the factory process like the paint dip, it’s hardly worth the time to mix & blend paint for 28-30 CARS and then switch to the next CAR, and so on and so on. Creating 200 doesn’t take that much more time …

And why two months from now – if you have access, why not now?

Because it’s costly to launch your own “export” business?

Okay, let’s say you had complete access to the factory – you could order people to assemble CARS at your will – you can start each speech with a bwahahaha evil laugh … so let’s say you decided to make 30 Motor Speedway sets … first, you would need to mix and blend 20-36 different base coats – even if all the colors are pre-programmed, you’d still need some skill to turn on the machine or bring in the guy who does that. Then you need to have enough metal to make some 90 versions of each of the three body types … plus borrow a few McQ, Chick Hicks and King (the oddball body types) – then assemble some 1,000+ SETS of tampo decals, eyes and prepare the proper paint for the areas of the body that need paint by hands. Obviously you need the regular employees who can slap on, coat and finish just the eyes portion properly – not to mention the rest of the CAR. You need a person who can rivet and then have all the CARS stamped properly. You need 30 acrylic bases and the sticker of the race track surface … see where I’m going? Even if you or I had total access to the factory with no chance of getting caught, I’d bet we’d spend an hour just gluing one set of eyes on properly … it’s hard work to build this mini “unauthorized” venture … so maybe, they’re just waiting the 2-months because Mattel is going to have the assembly line cranked up ANYWAY?

If Mattel is making another 2,000/3,000 sets in 4-5 weeks from now, what’s another 30? Or 50? If Mattel orders 2,000 sets, they are not just going to print up 2,000 Mood Springs tampo decals, they’ll print up 2,500 just to safe … so who’s going to notice if the factory workers spend another 30-minutes on the line making a total of 2,030 sets or 2,100 sets – they just know they’re supposed to keep applying these tampo decals to this blue car until the blue car stops arriving at his assembly station?

See where I’m going?

Again, I have ZERO PROOF of anything.

All I’m saying is a lot of things don’t add up – if you have full access to the factory, why wait two months? Why not strike while the $1,500 “iron” is hot? But to do it now requires you to act like a legit business – paying for supplies & wages? … But what makes 2-months better than now? Mattel paying for nearly everything? You just tag on a little payoff at the end?

I should also point out that if this becomes true, then would Mattel really brazenly release a second version of this virtually the same set – with race track base, with cover & the exact same artwork? (with some just other tony feature to indicate it’s not V.1? No hologram sticker?) Because this presumes this ‘unauthorized venture’ is unwilling to spend “real” money to re-produce anything separately but is just grabbing 5% extra/leftover from Mattel’s actual versions?

I DON’T HAVE PROOF OF ANYTHING!

For those in my boat – you bought the set because you liked it, have opened it – playing with it – etc … if Mattel is coming back with another version much like it but NOT exactly the same … will you be furious? Will you be mad? Will you be annoyed? Will you just shrug?

What if you bought this as an investment – what does a few extra thousand mean to you? Betrayl? Just Business?

Again, I have no idea if these guys are just launching some ‘unauthorized version’ because they could scrap up enough capital to fund making just 30 sets or is 30 a number they feel they can tag onto Mattel’s next run without too much notice?

All I can say is that CARS is never dull.

There’s always something going on or in some cases, something not going on.

In the words of Hunter S. Thompson, “When the going gets weird, the weird turn pro.”

This is a playtpus eating a land shark and singing.

Stay tuned … lots of more interesting posts coming … 🙂