This is a complete guide on the toy wholesale business and how to start a toy business of your own from scratch.
The guide is divided into 5 sections, pre-product selection, costing, business model selection, then on the wholesale toy channels and some practical tips on running a toy business.
Toy wholesale business first tips:What to sell?
This is the first and most important part of your toy wholesale business. If you want to start a toy business from scratch, then you should pay much attention to the toy selection.
Of course, you can find many strategies about choosing profitable products on the Internet . While in this article, I will list the most practical and important strategies that apply to different groups of sellers based on my purchasing experience.
Daily toys with high market demand
For the beginning stages of your business, items that will continue to generate cash flow for toys will be an optimal choice.
Since steady growth is what people ideally want for a new store, you should not risk to try something too trendy or innovative. For the sake of your cash flow, it is worth trying to find your first products in a common product niche.
Toys that are easy to transport and not easily damaged
When you plan to start your toy wholesale business, every penny counts. If the product is made out of fragile materials, it will raise your packaging costs and the rate of damage to your goods during international shipments can be out of control.
While any further damage to your goods during domestic shipping can bring negative reviews to your store.
Toys that are not over-saturated with competitiveness
For the majority of new sellers, resources are relatively limited, so it would be unwise for them to compete with the larger sellers in a saturated product niche. You would have to pay a hefty extra cost just to gain some market share in a saturated toy niche.
An easy trick to identify whether a toy niche is over saturated is to check the search volume and ad price for that niche keyword, as the higher the value of both, the more competition there is. Or you can simply search for a product on Amazon and if there are too many results with more than 1,000 reviews, that product may not be the best choice for you to start a toy wholesale business.
Toys with a profit margin above 50%
When you are calculating your profit margin, it is essential that you take into account all the costs that may be incurred in the sales process. Make sure that when you include all the costs, from buying costs to shipping, advertising and any platform service fees, in the margin, you still have money left over. Generally, for online businesses, a 50% margin is a relatively reasonable target.
Many toy sellers have experienced this problem, especially when importing overseas. There are two common scenarios for toy infringement.
The first situation is when you buy a toy that infringes on an existing major toy brand in your country in terms of design, logo, or other aspects. The other situation is when you buy toys from abroad that was originally designed, but other buyers have registered patents for those toys in your country.
If you are accused of infringement, it will result in a huge loss to your business. In order to avoid any accidental infringement, you should check whether the products have any trademark or any patent registration before placing an order. For example, if you’re importing toys to the United States, you can check the Patent and Trademark Office’s website for patents and trademarks.
Research methods and channels for choosing toy products
Adhering to the above principles, you can try the following sources to get some ideas and inspiration to choose the right products to get your toy wholesale business up and running
The local toy market usually reflects the local retail demand. If there is any local market near you, it would be wise to visit it.
While you’re at the market, pay a lot of attention to the categories that are often found in the toy stores, and even ask about the best-selling products around if possible.
You’ll learn a lot about your local customer base and their spending habits by doing this, as well as some more exact directions you can look for your toy business.
Top-selling lists and other sales data from online marketplaces
Checking online marketplace best-seller lists and other sales data is one of the most direct and effective ways to gather information about general trends in the toy market.
Moreover it is one of the easiest ways – most retail or wholesale sites have best-seller lists for each category, just like Amazon’s best sellers page, and all you need to do is click through.
Additionally, you can use specialized tools like Jungle Scout to collect sales data in greater depth and comprehensiveness.
Social media platforms (ins, Pinterest)
Many influential toy manufacturers also like to post concept images on social media platforms before officially launching new products. People love to share eye-catching and exciting toys on the Internet.
If you spot a toy picture or video” going viral on a social media platform like Instagram or Pinterest, you’ll find it on Amazon within a few months at most.
Hence, keeping an eye on the latest social media trends will help you stay on top of what’s happening in the industry and the latest ideas from toy lovers.
Toy wholesale business second tips:How much does it cost?
When you calculate the budget required to run a toy wholesale business, you have to cover many types of costs, and I will begin here with a quick list about the specific types of costs that may be incurred in the sales process, and then we will discuss each one in turn.
In the early stages of the selling process, before you start selling, the following basic costs and expenses may be incurred.
Toy sourcing costs
Domestic logistics costs
Overseas shipping costs
Customs duties and taxes
Costs related to toy regulation and certification
Employment of employees
Promotional fees will be one of the most fundamental types of expenses that can bring you profits.
If you are planning to open an independent toy store online, that you need to invest in promotion in order to attract sufficient volume of customers to your store. There are two common sources to promote your store: the first is to advertise on Google, and the second is to do the affiliate marketing.
By selling on large e-commerce platforms such as Amazon will save you effort in terms of gaining customer volume, but you will still have to pay for the volume of customers you gain from these platforms in the early stages of your business.
For example, if you want more customers to visit your toy store, you can purchase Amazon’s pay-per-use service, which will give you more access to Amazon’s customer base.
After delivery to the FBA warehouse, you will need to pay additional FBA fees, which vary in the amount of fees for different toy niches. the calculation of FBA fees is a bit complicated, however you can use the online FBA calculator to come up with an approximate amount of estimated FBA fees.
In addition to the above, you may have to invest more operating capital in your store when your business grows to a certain size.
Toy wholesale business third tips: How to sell?
One of the most important steps to start a toy wholesale business online is to choose the right platform. In this part, we going to talk about the pros and cons of several e-commerce platforms that you could start a toy business on:
If you want to start a toy business that can bring you consistent passive income. Opening a store on Amazon would be a good option for you.
It may sound easy, but you have to spend a lot of energy to choose your products and test the markets before you can really get started.
Especially in recent years, the competitiveness is getting saturated on Amazon, more and more strict requirements are imposed to the sellers by Amazon.
eBay has many similarities with Amazon. It has also set independent sites in different countries just like Amazon.
One of the biggest differences between Amazon and eBay is that the toys on Amazon are generally more premium and high-end than those on eBay. I think it’s mostly because of the much stricter requirements and rules of Amazon for toys.
So, for toys of lower value, eBay would be a good platform to sell them on. One other thing to be noted, if you want to sell toys in the Australian market, eBay might also be a better option than Amazon for its No.1 position among e-commerce markets in Australia.
Wish is a rather young e-commerce platform whose main target market is the USA. It features eye-catching and low-value fashionable products and novelties. In the meantime, Wish has the laxest rules about the toys to be listed on it.
In conclusion, for sellers who want to open a store on a large e-commerce platform, the most important thing is to develop a toy wholesale business plan after understanding the rules of the platform and calculate the operating costs separately.
If you intend to manage your store delicately, focus on product optimization, and delve into certain toy niche areas, then you should consider Amazon.
On the contrary, if you want to cover as many toy types as possible and earn more revenue by selling a wider range of products, you may consider other platforms such as eBay and Wish, as they have more friendly listing restrictions.
For sellers with sufficient budget and marketing expertise, you may considering opening an independent online toy store through Shopify or other similar platforms. This business model will allow you to make your own brand, establish your own customer base, and run your business more independently.
In a drop shipping model, your supplier will deliver the goods directly to your customers when they place any order in your toy store.
You can start your toy business with just a few hundred dollars. This type of business model is very suitable for sellers who just want to make some extra money.
However, due to the uncertainties of this model, it is only recommended for those who can find a reliable drop-shipping supplier.
So while this business model can be profitable, I would not recommend it if you want to have a long term business.
Toy wholesale business fourth tips:
Toy vendors usually import toys from China or wholesale toys from local markets. If you want to start your toy wholesale business, China is a good choice as your sourcing place.If you are not exactly sure what toys you want to sell, you can go to the local market to purchase toys. If you have a clear idea about your product, you’d better try to import from China to increase your profit margin. In this section, I will explain the benefits and advantages of each of these two wholesale toy channels.
Benefits of purchasing toys from local markets
Short shipping time
When you are wholesaling toys in bulk from a market near your location, especially if your goods are shipped by sea, the transit time is greatly reduced compared to overseas imports.
With short geographical distances and no language barriers, it is easier for you to get in touch with your suppliers. There are no national borders and you can even visit your suppliers whenever you want.
The minimum order quantity will also be relatively low. For the same product, the minimum order quantity is usually higher for international transactions than for domestic transactions. If your budget and time are limited, buying toys from your local market may give you room for a more diverse mix.
Unique advantages you can gain by wholesale toys from China
More competitive prices
With lower material and labor costs and a more developed and efficient industry chain, toy manufacturers in China can offer more competitive wholesale prices than most Western countries. Importing from China is what more than 70 percent of toy sellers on Amazon do to gain a price advantage.
More options for toy types and models
Many major international toy brands around the world choose to manufacture their products in China. You can always find the latest models and types of toys made in China using the most advanced technology.
More convenient for customization
China has many toy industry clusters dedicated to different product areas. Manufacturers located in these clusters have the ability to provide high efficiency, high quality, and low cost customization services.
Whether you want to start a small private label or develop your own products from scratch, you’ll find the right supplier for your toy business here.
Finally, I have some practical tips to share with new toy sellers that I have learned from our toy buying experience.If you’re just starting your toy wholesale business, then you don’t want to miss these.
1. Don’t be obsessed with the real factory
2. Don’t put all your eggs in one basket
3. Balance price and quality
4. Find a supplier who is willing to communicate and help you solve problems
5. Don’t be fooled by the low prices quoted by suppliers
6. make sure your toys pass all the necessary certifications in your country
After obtaining this information, you can ask your supplier or hire a third-party agent to ensure that all required certifications are in compliance.