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Why are hot toys always in short supply?

Beware the “must have” toy this Christmas.

Every year without fail there’s one toy on the market that every child must have.

In my generation it was a Tickle-Me Elmo. In previous years it’s been a Furby or a PlayStation.

These so called “must have” toys have a few things in common: most children want them, supply is low, and prices are usually much higher than parents want to pay.

If you’re a parent like me you’ve probably asked yourself, why don’t the manufacturers just make more? These toys will sell out in no time so the toy companies will make a ton of money if they just managed to crank out a few thousand more.

The answer to why don’t they just make more is a bit sneaky and may leave you scratching your head—in short the toy companies don’t want to sell enough of these toys to meet demand at Christmas. Yes, parents will be frustrated. Yes, the toys will be sold on the black market for an inflated profit. However, it actually benefits the toy companies NOT to sell more products.

Confused yet?

Here’s why (and see if this sounds familiar). Your child wants the toy, so naturally they ask mum or dad or Santa for it because the child has been especially good this year. The parent who wants to fulfill their child’s wants and be a special kind of hero on Christmas day says, “Of course I’ll get you the toy!”

Like most parents you may not know that millions of other parents have just said the same thing and the last Furby, Tickle-Me Elmo, PlayStation sold out at your local store months ago.

No problem, in today’s market you can go online confident that with expedited shipping you can get the toy by Christmas with time to spare.

Oh no, all the online retailers are sold out as well, and the only people selling the must-have toy are on eBay and are charging 400 percent more than what the retailer would normally charge. Common sense prevails, and you are not willing to pay $500 for a toy that your child will only pay with for a month.

Fast forward and Christmas comes, the toy is not under the tree and you’re not feeling like the special kind of hero you thought you would. The child is disappointed, but is distracted by the other toys under the tree. So does the story end?

Not quite.

You wait a couple of days and then you get into your car and drive to your local retailer. Surprise, the shelves are full of that must-have toy. Oh, happy day! You buy it and surprise your little one with the must-have toy of the season, then sit back and revel in the abundance of admiration.

But why did you have to wait until after Christmas? Was there a mechanical breakdown at the factory where the toys were manufactured, is that why they weren’t available at Christmas? No, the manufacturer deliberately held back until after Christmas.

Why would a toy company do something so Scrooge like?

Well, for toy companies their slowest time is right after Christmas. The companies still have bills to pay, so how do they increase revenues at their slowest time? How did they know you would buy the toy after Christmas? They applied something in psychology called commitment and consistency.

People want to be seen as consistent in their beliefs and actions. When people promise that they will do something, it is in their nature to follow through on it simply because they don’t want to be viewed as flaky or untrustworthy. Untrustworthy people aren’t very popular.

When you promised your child that you would get him or her the toy, you made a commitment to them. You were compelled to follow through on that commitment because you wanted to be consistent between your words and your actions.

Toy manufacturers used commitment and consistency to sell toys during their slowest season. Before you curse toy manufacturers for the games that they play, keep in mind that many organizations from charities to sports teams use the same mechanism of commitment and consistency.

So the next time that you get asked for the next must-have toy, either make sure you have it before you promise to get it—or promise to get it right after Christmas.

This is one in a series of columns by University of Mary Washington College of Business faculty on various aspects of finance and economics as they affect our readers. Kashef Majid is an assistant professor of marketing at the University of Mary Washington. He can be reached at


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