Demystifying the XM ‘Made-To-Order’ (MTO) and why we think it is better for Collectors

Hey folks,

Every now and then, we receive questions or see comments about our new MTO process along these lines;

• What exactly is MTO? What does it do? How does it change anything?
• XM is not doing that well, the statue bubble’s bursting and they can’t sell as many so they are now resorting to MTO.
• Made-To-Order means the edition sizes could technically go into thousands or unlimited ES – YIKES!
• MTO is just a gimmick to make people buy. Since it’s MTO anyway, there’s no rush to buy early or pre-order.  Just wait and buy later, the stuff will be available at lower than retail!

Actually, the above negative comments are SOMEWHAT true! BUT the keyword is SOMEWHAT. Let’s run through each topic and break it down as openly as we can.

What exactly is MTO? What does it do? How does it change anything?

MTO stands for Made-to-order and there’s a cool webpage that explains it in detail (http://www.lean-manufacturing-japan.com/scm-terminology/mto-make-to-order.html), but here’s a quick snippet “MTO (Made-to-Order) is a manufacturing process in which manufacturing starts only after a customer's order is received.”

In XM’s context, it’s actually much simpler. Instead of us guessing what Edition Sizes (ES) to make for our products, we’ve decided to let the market (you collectors) tell us what how many to make!  In short, we will only produce how many were ordered hence Made-to-order!

How does this change anything? Quite a lot actually!

In the last 2 years or so, there have been a substantial increase in collectible products on the market. The number of products, in our opinion, is growing at a faster rate than collectors can consume them. While money and affordability are important factors – SPACE is becoming increasingly important as well. The situation worsens because MORE collectibles are being reintroduced back into the already bloating collectibles market and LESS people are buying.

As we all know, when supply exceeds demand, prices usually come down (especially in secondary markets).  People stop buying and wait for good deals. I think it’s safe to say that most collectible statues’ secondary pricing (regardless of brands) aren’t as good as they were 3-4 years back.

MTO allows XM to make just enough products based on orders, not based on assumption of ES. This way, we can get a more accurate gauge of demand, and avoid producing excess stocks. MTO helps to rebalance the equation.  We produce only what is consumed. In our MTO process, XM website opens orders for a period of time (typically 2 weeks), after which we close and have a number. Distributors have up to additional 2 weeks to take their orders.  We add these numbers to orders taken at conventions, giving us the final ES that’s based on ACTUAL orders.

Let’s look at the results. Below are the recent MTO final ES set for the following XM products;

• Catwoman (Samurai Series): 900
• Poison Ivy (Samurai Series): 600
• Storm: 420
• Moon Knight: 270
• Dark Phoenix: 999 (Capped)
• Scorpion: 300
• Darth Maul: 270

Take Moon Knight for example.  He is a BOSS character, but being realistic, he’s not considered mainstream.  His edition size ended up at 270 orders. Chances are the 270 owners are true fans and likely will keep this piece for their own personal collection for the near foreseeable future. The same principles apply too for the other MTO products. Instead of producing 999 Catwoman (Samurai Series), we stopped at 900 based on the actual orders rather than make a full 999 run. Keeping ES as close as we can to actual demands, we lessen supply which in turn helps to balance value and demand.  

Switching to a MTO process doesn’t mean our costs go down. In reality, our production costs actually go up as lesser pieces mean we don’t get to enjoy bulk production savings. Most factories frown on taking less than 300 pcs and often charge substantially higher to cover their time.

So how does MTO change anything? It helps to improve the current over supply, and we believe it will help collectors own XM products that are optimised for the right level of rarity for collectors. Happy Customers = Happy Collecting = Happy Business!

XM is not doing that well, the statue bubble’s bursting and they can’t sell as many so they are now resorting to MTO

As mentioned in the beginning of this article, it is our opinion that the market is displaying signs of saturation across the statue collectible industry, regardless of brand.  But, we don’t think the bubble has burst, and we certainly hope it never does.  Which is another reason why we have implemented MTO.

Are XM products selling less? Yes and No – Yes, ES per product is lower than in the past (due to the MTO system), but we are successfully rolling out more products, so it actually balances out.  For our fans, we appreciate your concern, but XM’s revenue has positive growth year on year till date. 

MTO isn’t a last resort move.  It is simply XM adapting as a business to help improve the market conditions.

MTO is just a gimmick to make people buy. Since it’s MTO anyway, there’s no rush to buy early or pre-order.  Just wait and buy later, the stuff will be available at lower than retail!

Yes it is a ‘gimmick’.  Of course, as a business we are always trying to find ways to make buying our products more attractive! What’s important, though, is understanding clearly what the ‘gimmick’ is and whether it makes sense for you as a collector. This article presents the reasons behind MTO, our opinions, why it helps collectors and the industry. To summarize;

• ES is ‘balanced’ and more accurately reflects actual demand vs supply
• We’ve placed a cap on top of MTO to ensure our products are kept limited
• We’ve shared the resulting ES numbers for recent products – and you can see it’s not as high as before for most products. Nothing to hide there!

We are not offering a miracle overnight solution. Realigning demand and supply takes time.  However, we do highly recommend that if you genuinely like a piece, the only sure fire way to get what you want is to order during the PO window.  But, ultimately, you decide when, what and how you buy. We hope this article is useful in helping you make decisions on your next XM purchase.

Whatever choice you make, buy what you like, enjoy the hobby, and Happy Collecting!

Bryan Tan

One of the dudes who co-founded XM

P.S: If you like this article or would like to send feedback, please email [email protected]. I'm thinking of writing more articles such as;

• Rising cost of collectibles; a producer's perspective and what the future may look like
• To buy or not to buy; the many types of collectors and the reasons they buy. Which type are you?
• The dreaded 'Statue Bubble Burst', is it coming?
• So your statue's value dropped. But when does it really matter?