Funko Pop! figures, the collectible dolls with big heads that represent people and famous characters, are set to be thrown away as excess inventory creates financial difficulties for the company. In its fourth-quarter 2022 report, Funko announced that declining demand for games and an excess inventory has resulted in a surplus of $246.6 million, 48% more than a year ago.
To reduce inventory management costs, the company plans to eliminate some of the $250 million in inventory in the first half of 2023. This includes discarding $30 million worth of the product that is costing more to keep than its worth.
Funko CEO Brian Mariotti explained that the company was forced to lease additional space and containers due to the excess inventory, causing financial strain. Company executives also announced a 10% workforce cut as part of their efforts to address the financial challenges.
Despite posting sales of $1 billion in 2021, an increase of 58%, Funko suffered a loss of $47 billion in the fourth quarter of 2022, compared to a $17 million profit for the same period a year earlier.
The excess inventory of Funko Pop! figures highlights the challenges faced by companies in managing their supply chain and inventory. It also underscores the importance of balancing production with demand to avoid wastage and financial losses.
As consumers become increasingly conscious of sustainability and the impact of their purchases, it is essential for companies to prioritize responsible production and inventory management. By doing so, companies can minimize waste and financial losses while building trust and loyalty with their customers.