The Disney Merchandise Money Train

So I just got back from a week trip to Orlando, Florida to check out Universal Studios and the Disney parks. Now that the stage has been set . . .

disney-merchandise-moneyDid you know that Disney makes a lot of money? Of course you did but did you know that since Cars came out in 2006 they have made 8 billion dollars on merchandise sales alone? The movie, surprisingly only made $500 million internationally but they couldn’t care in the slightest. In fact, they could have given movie tickets away for free and still be laughing.

Disney merchandise is both absolutely thievery (from a paying parent’s perspective) and complete brilliance (from a business perspective). Walking around the parks you quickly discover that for every ride and attraction there are 2 or 3 gift shops. Most attractions exit directly into either a gift shop or arcade to make it easier for the kids to start their “mommy please” chants. These chants are parents’ number 1 weakness and wreaks unbelievable havoc on their wallets.

I learned many things on my vacation to the parks:

  1. Most things in the U.S. are relatively cheap (booze, food etc.)
  2. You could buy a brand new car for the price of a family’s share of Disney merchandise

It might seem crazy but after visiting 3 parks I walked away without a single souvenir. My reasoning is simple: souvenir or not, a small fridge magnet is not worth $8, a tiny figurine is not worth $24.95 and a Harry Potter wand (read: tiny piece of wood) is not worth $32 – this last one is almost laughable.

disney-merchandise-money-trainFor those interested, there is a business lesson here. There is a lot of money to be made by attracting consumers and upselling them but more importantly – sell to kids. Sell, sell, sell, sell, sell to kids. If you can capture the kids attention you’ve got money in the bank. Harry Potter is even more brilliant because it attracts both younger audiences and slightly older audiences that have disposable income. Genius. Is it too late to invest in Disney???