How To Find & Secure Effective Distributors For Toys & Games
The area where we are asked for help most often from toy & game companies is to help them speak to & close distribution deals with toy & game distributors in more markets outside their home markets. Over time we have developed several ways of increasing the chances of success for our clients in finding productive and mutually beneficial relationships with distributors:
- Trade Show attendance is the best & biggest way to meet new distributors
Virtual connections can lead to good results, but you can never meet face to face meeting. For this trade shows are a critical part of the process of finding and building relationships with toy distributors or board game distributors. Clearly this approach is not as viable during the Covid pandemic, but nevertheless the moment it is viable again it will come back to the fore as a primary method of meeting and recruiting new distributors.
- Understand the business model of the distributor
Being a distributor is a tough business. Distributors take significant inventory risk to run their business, and a few bad product line selections can seriously constrain cashflow, therefore distributors are equally if not more risk averse than the retailers they sell to. In order to reduce the risk of anyone product line failing, they tend to have a broad and diversified product line, and that brings in the biggest challenges with using distributors to get your product to market – FOCUS, if they put little focus into selling and pushing your product line your sales will disappoint. It is really important to understand this, because having a distributor and having a focused and effective distributor for your product line can be different things.
- Understand the marketplace
There are two elements of this: firstly, there is the local market situation in terms of retail structure, product culture, consumer preferences and other localised operating parameters. For instance, Germany has a very decentralised retail market, whereas France has a comparatively centralised retail buying structure. Therefore, you need to understand the differences to appreciate which distributor is going to have the best chance of being successful in the market.
Secondly, it is important to be aware of the general situation in the marketplace. In particular, product proliferation is a considerable challenge in trying to secure distribution for toys and board games. There are literally millions of products out there for distributors to chose from, and because they only have so much capacity, so much cashflow to fund stock purchases and so much time in front of each buyer, they will typically turn away many more product lines than they chose to distribute. This changes the balance of power somewhat in terms of negotiating and finalising a deal. In effect, it is a buyers’ market for distributors, they have considerable choice, and therefore the sales process and relationships should not be taken lightly.
- Build relationships with people
Building relationships with all your contacts at every distributor you want to work with can only assist your efforts. Aside from it being a source of great pleasure and warmth to build friendships around the world over time (and often over a beer or two!), in work terms it helps if you have god relationships with people you are working with. Sometimes difficult situations arise, and it is usually easier to work through challenges with people you already know and like.
But also, the better your relationship with your distributors the more they will share the details and challenges of selling your product in your market, which should lead to both of you having a better chance of success in each market.
- Distribute your distributors product into your home country
One really effective way to bind yourself closer to your distributors is to help them to sell their products into your own market. Most distributors will have at least a few product lines that they themselves have developed or have exclusive distribution for. By helping them to sell more of their products, you quite often build a stronger relationship and then their focus on your products tends to become stronger because they will feel a reciprocal obligation.
We run a Consultancy business for toy companies. We work with major toy companies through to start ups and one person bands. For more information on how we help toy companies grow their distribution around the world: https://www.kidsbrandinsight.com/blog/toy-co-growth-booster-program/
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