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From Factory Floor to XXX-Shop Door

Far too often, people think that when a sex toy dealer sells them a sex toy, it must be good. Regardless of the price. After all, why would a shop keeper sell shoddy anything? More and more consumers are figuring out that shoddy products are the mainstay of many industries, not just the Adult Novelty world. If it’s from a loonie store (that’s dollar store to our USA friends), you at least realize that you’re getting what you pay for so you don’t resent a dollar item if it lasts for a very short time. Many savvy consumers have figured out that spending even up to $20 just might not equate to getting quality. We hear comments like “you bought a cheap dildo, what can you expect?!” being bantered about to excuse rubber or vinyl sex toys that fragment or discolour after only a few months use. The thing is, that $20 (or even $40 to $80 and beyond) rubber or vinyl dildo is cheaper than most consumers can possibly imagine.

You can’t always equate quality with price. A $20 jelly rubber dildo might seem like a bargain to some and to others they might reason that they should go for the $40 one with more impressive packaging or even the $80 Cyberskin to “get something better” but in both cases, your retail dollar is going almost entirely to profit margin with a shockingly small fraction representing the value of what’s in the box.

Let’s start the economics 101 lesson at the factory floor. A $20 jelly rubber dildo is manufactured in China, not by a dildo designer, not by a sex toy maker, but by the same factory outlets as are manufacturing countless soft vinyl toys and dollar store gadgets for the North American market. The sole expertise that the manufacturer is offering is the ability to pour vinyl into multiple molds and then employ cheap labour to insert pre-assembled toy-quality motors and switches into the cavity. The manufacturer who secures the contract to churn out these rubber dildos is not the one who makes the best sex toy, it's the one that ships at the lowest per unit cost. At the point where that jelly rubber dildo rolls out of its mold conveyor belt and off of the factory floor its cost is about $1. So, pre-packing and pre-export, your $20 jelly dildo contains $1 worth of material, labour, and assembly cost.

Next, the little fellow gets put into its packaging. The packaging generally consists of a plastic tray with an inset mirror-imprint of the dildo, a paper pre-printed “warranty” card (the quotation marks indicate that the warranty at best is a 14 days from purchase, with receipt and original packaging, offer to mail the dildo into a Post Office box address together with a cheque for $10 and you’ll get another dildo mailed back to you), and a glossy cardboard box with a plastic window to house the complete lot. The glossy cardboard box has ad copy like “made of a scientifically advanced lifelike material previously developed by scientists at NASA” with some pseudo-science diagrams of advanced technology molecules and slogans such as “vibrates, rotates, to make you squirm” alongside a photograph of a porn star. The packaging has also been manufactured in China with the ad copy, logos, porn star photo and other graphics provided by the client. The per unit cost of the porn star licensing, ad copy writer’s and logo design firm fees, spread over thousands of units, amounts to a few cents. The plastic insert, warranty card, and glossy box cost plus the labour to package it all together is about $1. Thus when your $20 jelly rubber dildo with packaging settles into a container box bound for overseas freight shipment, its unit cost is up to a staggering $2.05. Cost to send it long haul freighter to ports abroad, less than half a buck. Add excise and brokerage fees of around 10 % to cover the import stage and your jaunty jelly dildo finds its way into its importer's main distribution warehouse still costing shy of $3.

Now that your $20 dildo has arrived in America, its cost of living starts to skyrocket, as it makes its way inland to a dealer near you. Adult Novelty companies rely on a network of regional distributors to bring their products into the countless XXX shops dotting the landscape. An Adult Novelty company tacks on a 40% to 50% margin to cover the cost of warehousing rows upon rows of jelly dildos and other adult novelties, glossy, often inch thick quarterly catalogues profiling all their wares to the smaller distributors, other branding costs (flyers, trade show appearances, promotional materials like logo imprinted T-shirts or caps, and other obsequious stuff common to many industries outside of sex toys - think pet food, for example) and profit. That means that your dildo costs about $4 while it's sitting on the shelf and the Adult Novelty company is promoting it to the wider audience of primary distributors (i.e. Eastern Canada or North Eastern USA, Western Canada and Pacific Coast) wholesale warehouse outlets for the next stage of its travels. The regional distributors lob on another 35% to pay for shipping, warehousing a wide selection of toys from all the major Adult Novelty players, and mailing out a stack O’ glossy catalogues from these same major players to their smaller regional distributors and/or the actual retail outlets located in the larger urban Centre. This distribution network thus sees the cost of the jelly dildo rising to around five and a half buck-a-roos, and the poor little guy hasn’t even made it on to a retail shelf to meet its potential owner yet!

If potential owners live in smaller urban or rural settings, they can expect the jelly dildo to move into one more warehouse, that of the smaller regional distributor (i.e. Vancouver and Vancouver Island only or Pacific North West only) and gain another warehousing mark-up of around 15% as the distribution network narrows. This mark-up will be passed on to the potential owner which is why toys always cost more in the smaller areas. At any rate, the jelly dildo finally lands at the door of the retail XXX shop where it is anointed with it’s final mark-up, a margin of any where from 300% to 600% depending on the ‘name brand’ glossy draw of the packaging. If the packaging is elaborate (with “touch me” poke holes and lofty performance claims) expect a higher margin. So, a jelly dildo worth $1 in labour and material costs to produce retails for $20 to $40 dollars. After all, if they marked the stuff up by only 100% you might just figure out that a $10 jelly dildo really is poor quality stuff, without having any background information on the materials or other manufacturing defects. That final price is all about price point, not the quality of what’s in the box. And it’s that final margin, you astute comprehensive readers, that keeps the quality silicone and European or Japanese electronics from the doors of the XXX stores. The adult industry is founded on a high-end margin. The higher cost of labour and materials to make the good stuff is a barrier to bringing it off of the factory floor and into the XXX shop door.