Labubu dolls have become a global sensation, helping to turn blind boxes into a billion-dollar business.
The idea seems to go against one of the basic rules of shopping: people usually want to know exactly what they are buying before they pay for it.
Yet millions of consumers willingly purchase blind boxes without knowing which toy is inside.
A new study suggests there are solid economic reasons why this strategy works so well—not only for customers, but also for retailers and manufacturers.
Researchers from George Mason University, Tulane University, and the University of Florida used mathematical models to examine what economists call “probabilistic selling.”
This is the practice of selling products whose exact contents are unknown until after purchase.
Blind boxes are one of the most familiar examples, but similar strategies are also used in industries such as car rentals, books, collectibles, and online gaming.
The researchers wanted to understand how probabilistic selling affects the relationships among suppliers, retailers, and consumers.
In a typical market, a manufacturer produces products of different values or quality levels and sells them to retailers.
Retailers then sell those products to consumers. With blind boxes, some higher-value products are mixed together with lower-value products, creating an element of surprise.
According to the study, one major advantage of this approach is that it can help companies sell products that might otherwise remain unsold.
For example, if a business has more high-value items than customers are willing to buy at full price, those products can be included in blind boxes along with lower-value items. This creates a new product offering that may attract additional customers.
The strategy can also help companies maintain the perceived value of premium products. If high-quality items are heavily discounted to clear excess inventory, customers may begin to view them as less special.
Blind boxes allow companies to move inventory without lowering prices in a visible way.
However, the researchers found that success depends on who controls the blind-box strategy.
In some cases, retailers take the lead and create their own blind-box offerings. This can be costly because retailers must handle packaging, inventory management, fulfillment, and other extra tasks.
Knowing this, suppliers may reduce wholesale prices to make the strategy worthwhile for retailers. While this can help retailers, it may reduce profits for suppliers.
The study found that supplier-led blind-box programs often work better. When manufacturers control the contents of the boxes and the terms of sale, they can better balance the mix of premium and lower-value products. This allows them to protect the value of their best products while also reducing inefficiencies across the supply chain.
The benefits become even greater when premium products are scarce. In these situations, the researchers found that using those limited high-value items in blind boxes can generate better overall results than selling them separately.
Interestingly, the study suggests that supplier-led blind boxes can create a rare “win-win-win” situation. Suppliers can earn higher profits, retailers can expand sales opportunities, and consumers gain access to more purchasing options and the excitement of surprise.
The researchers note that real-world business decisions are often influenced by power dynamics. Large retailers such as online marketplaces may have enough influence to control these strategies themselves.
However, the study suggests that giving suppliers more control may sometimes produce better results for everyone involved.
In the end, the popularity of Labubu may not just be about cute collectibles. It may also reflect a surprisingly effective economic strategy that benefits businesses and consumers alike.
