Canada's Toy Market – A Missed Opportunity or Regulative Nightmare?

The Canadian Toy Market – A Missed Opportunity or Regulative Nightmare?

Canada has been in the European news lately, with CETA (Comprehensive Economic And Trade Agreement) promising free trade/tariff reduction with Canada after eight years of gruelling negotiations. The more contentious legal aspect which potentially cedes local/national/EU wide legal sovereignty and control over workers’ rights and other highly politicised issues to global corporations has attracted huge publicity & lead to public protests. When you add in the Trump administration’s apparently negative stance on NAFTA (North American Free Trade Organisation, allowing ‘free’ trade between the USA, Canada & Mexico), all the media noise could give the impression that trade with Canada is too difficult. I believe that being deterred by all this ‘noise’ would be a mistake, Canada offers significant opportunity for toy companies regardless of the macro level political/legal framework.

Over the years, I’ve consulted with many toy companies seeking to establish/grow distribution in North America. Most often though, toy companies focus on the biggest wins of all – namely the US toy market. However, Canada is in itself a very significant toy market, and one which can offer significant incremental opportunities.

The Canadian toy market is estimated at between $1.6bn-$2.5bn USD at retail value. This places Canada on a par with many European toy markets. While it may be smaller than the UK, France & Germany it is not that far behind. I am not aware of any other toy market in the world of such a size which is given so little focus by many toy companies.

Practically speaking – toy companies can increase focus & sales in Canada by recruiting a broader rep network, by working with a reputable Canadian distributor/wholesaler or by hiring staff. If you have a rep group covering North America, ensure they are taking Canada seriously/have access to on the ground sales resources either via their own staff or via another (Canadian rep group). If you go with a distributor, you need to ensure they are reputable, as it would be difficult to ensure product is not shipped from Canada to the USA causing issues there (although this is not much different to trading in Europe e.g. France & Belgium). If you want to hire staff, you may be able to begin with one member of staff – a country manager or head of sales who can link together a sales & distribution network for you before you invest any further in the Canadian market.

One practical point – be aware that Canada has two official languages – English & French. Product packaging legally MUST feature all mandatories in both languages. This should not be too difficult for European companies to manage, as typically we are used to working with multiple languages, but we’d suggest not taking chances on this to avoid issues.

While the current political environment is quite turbulent, and trade deals like NAFTA and CETA become political ‘footballs’ for politicians to kick around, there is a significant and likely under exploited opportunity in Canada’s toy market waiting for you.

For more information on the Canadian toy market, the Canadian Toy Association is a good start point: http://www.canadiantoyassociation.ca/index.cfm

Do you need help to find the right mid to senior level people? We can help…we have been helping people from across the world of Toys, Games & Licensing to find new roles since 2011. Our client list reads like a ‘Who’s Who’ in the industry, think of a Toy company and we have worked with them in some way. Along the way we have met thousands of really talented people who could be your next hire.  Get in touch via the'Contact' page for more information if you need help to hire new people, or check out www.ToyRecruitment.com 

5 Key Steps For Starting A Toy Business

5 Key Steps For Starting A Toy Business

Start-up companies keep the toy industry fresh. One of the most rewarding things I have observed is seeing a start-up toy company attend toy fair, and then grow year by year until the company is a fully fledged established toy company. Needless to say though, there are significantly more companies that fall by the wayside than become successful.

There are several key steps in making a successful start-up toy company, not every company follows all of these steps, but this should be a good checklist for those planning to start or in the middle of starting a toy company:

1.       Research

a.       I’m often asked by people wanting to get into the toy business what they should research before they start…and the answer is everything! A really robust research phase is so important. You could argue that many innovators just invented something new or cool, or reworked an existing idea, but you can’t count on hitting the mark with that approach. How can it hurt to understand the retail market place, the current trends, what kids are doing/how they spend their time etc?

2.       Feedback/sense check

a.       One fact I would like to share is that I have been approached by hundreds of new product inventors/wannabee toy companies, and the vast majority of them have already developed a product…and the vast majority of them have missed something fundamental about kids, about the toy business or retail etc. The majority of new products I have seen from such toy industry outsiders are obviously flawed in some way which could easily have been addressed if we had spoken before they developed the product!

b.       The most successful toy people I know above all are great at getting feedback/sense checking their ideas & product concepts before investing their money in a product.

3.       Innovation/Origination

a.       Having given you the boring/sensible research or due diligence advice, now we can look at the fun stuff – product origination! There are many ways to develop ideas & concepts, and there are more qualified people than myself to advise on how to do this, but there are a few keys points I would highlight:

                                                               i.      True originality vs tweaking the formula

1.       If you are trying to invent something nobody has ever seen anything like before, the chances are you are not inventing something likely to be commercially successful. There are certain formulae for concepts, themes, play patterns etc.

2.       The true creatives out there may disagree with me, but a new twist on an established formula is much more likely to succeed.

                                                             ii.      Fun factor

1.       In the end toys are supposed to be fun. Good new concepts enhance the fun factor. Seems like an obvious point, but I have seen hundreds of very clever product concepts which do something beneficial/clever, but are not fun. Children are driven by simpler need states vs adults, the easiest way to make something appeal to kids is to make it fun!

                                                           iii.      In built marketing concept

1.       Often the most successful concepts have an in-built marketing mechanism/word of mouth driver.

4.       Sell, sell, sell

a.       Often new toy companies get really perplexed by all the details of the toy business i.e. manufacturing, safety standards etc. The reality is none of that matters if you don’t ever sell any product.

b.       Everything relies upon the sales process, and while you need to do enough work to have a viable product concept, the reality is that even the biggest toy companies do not fully develop & manufacture products until they have sold it.

c.       There are two realities of the sales process in the toy business:

                                                               i.      Successful companies get highly skilled/effective at selling based on a prototype/mock up.

                                                             ii.      Selling is 1% inspiration and 99% grind. It takes constant grinding effort to achieve any sales in the toy business. The annual selling cycle takes an age, and the progress made per cycle is limited, so to succeed in toys you need to be able to grind away day after day, year after year. If your company doesn’t do that you are very unlikely to succeed. There are very few short cuts, and no magic tricks.

                                                           iii.      Even if you use a distributor model you still need to sell to/recruit the distributors, and they see hundreds or even thousands of products per year.

d.       Realistic timelines are important. I’ve Consulted for dozens of companies who expect everything to happen in a few months or even just one year – it won’t! The minimum time to establish a new toy company in one market would be c. 3 years, even with money to invest & hiring toy industry insiders. If you are an outsider with no experience, why would it be any quicker…?

                                                               i.      I started a new business for a major global toy company, and another for a medium sized global toy company – in both cases it took 3 years to build with all those advantages of money to invest, toy industry contacts, top talent on the team, great product etc.

                                                             ii.      I always advise people not to set themselves up for failure – expect a 3-5 year journey to get anywhere in the toy business!

5.       Nurture & Deliver!

a.       The toy industry is a relatively small industry. Those companies who think they can burn & pillage in order to make a quick buck don’t tend to last very long. You will need to keep selling to the same customers year after year, so your success is completely tied to their success. Don’t for one second make the mistake of thinking therefore that you should give them everything they ask for, but you do need to do enough to ensure they invite you back to pitch your product range for the next selling cycle!

b.       Broader relationships are really important in the toy industry, because you see the same faces year after year, and as you go around each country in the world, there are only so many options for distribution partners or retail in each market. Burning bridges therefore is a silly thing to do!

c.       I first attended toy fair around 1999 or 2000, and I’m still meeting some of the same people I met then today – in our industry above all your contact network and relationships are your own personal equity!

There are of course other factors/areas which are important when seeking to establish a start-up toy company, but these 5 factors are key. If I had to pick one most important factor it would be ‘Sell, Sell, Sell!’ because nothing much happens until you persuade someone to buy from you, and even those successful companies developing really cool ‘must have’ products tend to be just as effective at selling as they are at developing the next big thing.

U.S. Toy Sales Are Up So Far in 2025?! Then Why Do Things Feel So Tough Right Now…?

U.S. Toy Sales Are Up So Far in 2025?! Then Why Do Things Feel So Tough Right Now…?

Do you need help to find the right mid to senior level people? We can help…we have been helping people from across the world of Toys, Games & Licensing to find new roles since 2011. Our client list reads like a ‘Who’s Who’ in the industry, think of a Toy company and we have worked with them in some way. Alogn the way we have met thousands of really talented people who could be your next hire.  Send me a DM for more information if you need help to hire new people, or check out www.ToyRecruitment.com 

Circana, the leading market data company covering the Toy industry, just reported that US Toy sales are up 6% YTD to end of April. After such a tumultuous period as our industry has had so far this year, this surely seems counter intuitive. But there are clear reasons reported by the folks at Circana for this. They highlight the strength of the Kidult segment, the impact of the Pokémon brand (especially the trading card game) and growth in higher price points i.e. $20+ retail price point.

The Toy industry at this stage is a very mature business. Growth of 6% is genuinely quite significant. There are not many years when the industry has been up by as high a percentage as that this millennium.

So, how do we explain this surprisingly positive 1st third of 2025? Well, there is no evidence of a downturn of consumer interest in Toys & Games. Consumers (including both Kids & so-called Kidults) still love our products. And 2025 comes after a few not particularly great years for the overall Toy category. My prediction for total market movement in 2025 was mid-single digit growth on the basis of more R&D investment from Toy companies after a few slow years, a much stronger movie slate and because of strong toyetic Brands with a lot of activity and momentum heading into this year.

The movie situation is worthy of discussion – after Hollywood strikes curtailed cinematic output, 2025 was the first fully back to speed year post pandemic really. And there has been a lot happening already in 2025. As of today (June 4th) YTD movie box office on very Toyetic movies is at over $2.5 billion globally. Now there are those who say that these days movies are not the force they once were in selling Toys, and there is clearly some merit in that argument. However, if you go into retail and check out the Toy aisles, or if you check out online Toy departments, there is no doubt about the prominence and therefore the sales volumes of Movie related Toys. There are a lot more movies yet to come in 2025, so that at least is a positive to look forward to and it’s good to have some positive momentum on that front.

CLOUDS ON THE HORIZON – WHY THE BACK HALF OF 2025 IS UNLIKELY TO BE AS POSITIVE AS THE FIRST 4 MONTHS OF THE YEAR

The New York Times has reported significant price rises hitting Walmart shoppers:

https://nypost.com/2025/06/02/business/walmart-quietly-jacks-up-prices-despite-trumps-demand-for-retailer-to-eat-the-tariffs/ 

The article dated June 2nd 2025 highlights that:

·       Jurassic World T. Rex Toy increased from $39.92 on April 27 to $55 by May 21 — an increase of nearly 38%.

·       A “Baby Born” doll went from $34.97 in March to $49.97 in May, a c. 43% rise,

·       Lite Brite Magic Screen set up from $14.97 to $21.97 (up c. 47%).

·       Etch A Sketch motored on up from $14.97 to $24.99 — nearly a 67% increase.

Now it’s not like nobody pointed out price inflation would follow unprecedentedly high tariffs imposed on imports from China and from other countries. And yes, that’s still a transient situation subject to significant change potentially, but there can no longer be any doubt about inflation hitting Toy aisles from now on through to the end of the year. Even if tariffs were zeroed (which frankly just ain’t going to happen) it’s already too late as product has already started to be landed with tariffs added.

The bottom line is this: consumption will decrease as prices rise. That’s proven economic fact. So the full year global market performance will be adversely affected by this and the market is likely to finish 2025 down, not up in the final analysis.

I have rarely ever seen a moment like we have just lived through – where so many companies were genuinely looking down the barrel of potential business ruin. For those of you who worked through the global financial crisis, you will remember that even that gigantic financial event was not as bad as this year. Back then our retailers were under pressure, and all those around us were under pressure, and we lost some retailers around the world, but still, demand stayed fairly robust, and so those companies who went out of business tended to do so due to having poor financial reserves/credit facilities rather than literally not being able to justify manufacturing any inventory to stay in business.

A few months on, things are not quite so dark, but they are still fairly bad. I have genuinely never known so many really capable, highly experienced people looking for work as in this moment now. Of course we have felt that via our Toy, Game & Licensing Recruitment business. Companies have drawn up ultra-conservative battle plans to get through this year, and that has often included reducing head count. It’s a normal part of our industry as brands and products ebb and flow for some companies to have to reduce head count as they lose some revenues and market share to competitors, but it’s rare for so many companies to be in that same position at the same time.

There is a famous quote from a French abbot and statesman. He was asked what he did during the Terror, a deeply troubled and violent period of the French Revolution. His reply was: “J'ai vécu” or in English: “I survived”. That seems to be the philosophy of quite a few companies in the Toy business right now.

And one other point to recognise – this tariff induced crisis does not only affect Toy companies in the USA, because as the world’s biggest Toy & Game market by far, nearly every established international company has a substantial proportion of revenues coming from sales into the U.S. You can argue politically whether U.S. consumers should need to buy Toys from European, UK or Antipodean companies, but the reality is that these companies have come to rely on U.S. revenues. Moreover, if consumption shrinks, that has an effect on economies of scale affecting all other markets. My Chinese factory friends tell me that many factories in China have gone out of business recently, this will reduce choice and manufacturing capacity for all other countries which will likely lead to ongoing disruption in supply chains.

Anyway, frankly I am bored of writing and arguing about tariffs, and I’m sure you have read enough on this topic. So let’s end this on a more positive note – change is the only constant, in my 25 years in the Toy & Game industry so many things have changed. So many fundamentals we took for granted faded away – the industry’s flagship Toys R Us stores disappeared (from some markets), Woolworths closed in the UK, TV advertising was THE marketing method when I joined this industry, physical retail dominated and the only major alternative was buying through mail order from catalogues (sounds so antiquated now!) ,many long established companies went bust or sold up, and on and on the changes go. Those people and companies who embraced the change and sought opportunity when others gave up or only saw the downsides were the ones to thrive. The ongoing Artificial Intelligence revolution is likely to bring even more change, challenge and opportunity. Like all tough moments, it’s about how you manage it, and more specifically ensuring you manage it better than your competitors that counts. Hope to get back to writing about more positive things very soon.

TOY & GAME BUSINESS CONSULTANCY

In the nearly 15 years I have been Consulting for, we have advised 1000+ Toy & Game companies, set up distribution into most major markets and helped to accelerate our client’s growth across the world. For more information on how we can help, check out our services here: www.KidsBrandInsight.com/services 

GREAT PEOPLE ARE YOUR BIGGEST ADVANTAGE

Toy Recruitment Consultancy has become one our most in demand services. We have a social and own media platform (including this newsletter) which allows us to directly access c. 25k people in the world of Toys & Games from across the planet, aside from which after 25 years of grind, we know a lot of Toy & Game people across the world.

We’ve successfully recruited for roles in the UK, USA, Korea, HK, China and beyond. Our contact network is truly global…(ok we’d struggle to recruit for you in North Korea, but otherwise we’ve got you covered!).

So if you have key senior roles to fill or if you just can’t find someone qualified for a key role you need to fill, just drop me a DM and I’ll explain how we work/the costs involved or check out our Toy Recruitment website here: www.ToyRecruitment.com

Job Seekers Friday – as part of this work in helping to place good people, I’m going to try (as far as time and workload allows) to promote a new jobseeker every Friday going forward. If you are a job seeker with at least 5 years’ experience in The Toy/Game business and you want me to promote you to my audience of c. 25,000 industry people, please send me a DM & I’ll explain how it works (no cost).

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This article is copyright 2025 RG Marketing Ltd, all rights reserved. All contributors to this article contributed under a work for hire basis on behalf of RG Marketing Ltd. Please also note, this article was written and published in the United Kingdom.