Tag Archives: toy export

Toy Export Sales – The Formula For Progress

TOY EXPORT SALES – THE FORMULA FOR PROGRESS

If you analyse the global toy industry, once you get past the top few toy companies, who tend to have subsidiaries in any market/region worth the effort, you find an industry whereby the vast majority toy sales are made on a domestic/export split. In other words, toy companies will tend to be very well established with leading toy retailers in their home market, but then will tend to work with distributors in other countries.

If there was a formula for successful toy export business it would be something like this:

Time/Persistence x Legwork x Quality of product x Quality and depth of relationships x Selling ability/focus

Normally, it takes time to establish a full network of distributors. There are so many companies, brands and products to choose from that even if you have something really good, it will take years to establish a full global distribution network. The number one failure factor I have seen having consulted with many companies on how to grow their international sales is false expectations and budgeting of the likely rate of progress. It doesn’t usually work very quickly. OK, you may be able to find a handful of examples where something went global quite quickly, but for every globally distributed product that did it quickly there are at least 1,000 which did it typically i.e. slowly, in fact, a 3 to 5 year build is typical.

At the time of writing, we have helped companies create new distribution arrangements into the following countries: USA, Canada, Mexico, Brazil, Argentina, Chile, UK, Eire, Benelux, Sweden, Norway, Denmark, Finland, Iceland, France, Germany, Russia, Spain, Italy, Portugal, Eastern Europe, Middle East, South Africa, HK, Malaysia, Singapore, Australia, New Zealand, Japan, South Korea – oh, and in case we forget – Liechtenstein! There are probably others we forgot, but in all these cases, the prevailing trend was TIME, it took time! Maybe around 5% of these markets were entered within 1 or 2 meetings as there was such an obvious fit between the two companies & the products were an obvious opportunity. But for 95% of the markets/projects, it took multiple meetings, and took longer than any of us expected/wanted!

The second factor which goes along with time is ‘leg work’ or ‘grind’, call it what you will – doing all the shows, taking a few more meetings than the other guy, following up just one more time on that unanswered call/email etc.

Clearly you also need a good product, but that should go without saying. To have any chance of competing in a world with millions of individual toy products, you had better have something that compares well – the two golden questions to ask in development of products is this: a). why should any distributor/retailer put this product on the shelf/online store vs all the thousands they get to choose from and b). why would a consumer choose ot buy your product over the millions of others they could choose from?

Clearly the capability of the sales person and their focus on the business is a key factor, although if you speak to the most successful sales people they will usually tell you there is no real secret, just hard work and persistence, but these factors develop quality relationships which in the end becomes a major factor in success. If you don’t have those relationships yet, you can always use the services of consultants and/or reps to try to get to more markets more quickly. Over time, that is the only accelerating factor we have seen work time and time again, although that is to be expected as that is a key type of project we work on!

As we get towards the start of toy fair season, everybody is looking for a good 2019, and a quick fix to sales for the next cycle, but it’s normally good to remember that we’re (most of us) in this game for the long run, and the relationships and distribution networks you build today should still be there for tomorrow if you nurture them and manage them properly. So sometimes we mistake quick progress with success, when actually the real success element is long term sustainability – and this takes time to build!

 

 

We recently launched a new brand and product management service. Our small team of highly qualified, experienced toy people are now working with toy companies on a project basis to support them where they need flexible resources. Part of this service is outsourced Export Sales Management. If you need help to boost your export sales, you can find out more here: http://www.kidsbrandinsight.com/services/ 

5 Top Tips For Growing Toy Export Sales

Steve pic

Rarely does my company encounter more wasted effort, expense and opportunity than in the field of export sales. Nearly every company wants to sell overseas, but apparently fairly few actually look to build a sustainable, coherently managed business which will thrive and grow longer term.

The reality is that selling toys overseas can be comparatively easy, but the main issue is a lack of strategy, a lack of planning and a lack of analysis of whether a particular product range will work in other markets. When we help toy or board game companies set up or grow their overseas sales, the start point is not who can we sell to and how soon can we get started. The start point is product selection, collateral material production and an understanding of how future developments can be tweaked to maximise the opportunities.

For those companies with a successful domestic business who are not overly interested in selling further afield, consider these stats – the US toy market is huge by any standards, but even then the market only accounts for between 20-25% of the global toy market i.e. 75-80% of the opportunity is still outside the US. For other markets the scope of this export opportunity is even greater, if we take my home market (the UK), then there is roughly 95% of the global toy opportunity outside the domestic market!

So a good sound plan, and a willingness to devote time and resources to export sales can yield great results.

Here’s 5 top tips for how to maximise the toy export opportunity:

1. Make Sure Your Products Sell Well In Your Domestic Market – the first question any overseas customer will ask you is how well your products will sell at home. If your products don’t work particularly well in your home market, they aren’t all that likely to work elsewhere. Perhaps you could hold off from attacking the vast international opportunities until you have a proven performer to sell…because until you do you are likely to be better rewarded spending your time on building traction domestically!

2. Understand That Markets Differ – presuming that all markets are the same and that you can sell the same thing the same way anywhere in the world is setting your company up for failure. Markets differ vastly in terms of product mix, retail set up/key players, pricing, culture and many other factors. Companies who achieve success in the export business either a). create globally relevant products or b). adapt to the needs of each market opportunity as far as needed. For an example of how different markets can be, check out our article on how the European toy market is actually far from being one single homogenous market:   https://www.toyindustryjournal.com/?p=53

3. Prioritise, Prioritise, Prioritise – there are so many individual countries out there that it can be overwhelming to approach them all at the same time/during the same selling cycle. A winning approach has to be driven by prioritising by size of opportunity – for instance, if you are not located in North America, then the North American market (as the largest, most homogenous toy market in the world) should be your first priority. The next largest toy markets are China & Japan, although they aren’t all that easy to penetrate, followed by the UK, France & Germany, with Australia thrown in as it’s an English language speaking market of reasonable if not large size. If you are just starting to look at export sales, those markets should be more than enough to keep you busy and offer a very significant chunk of the global opportunity. Everything else after that is basically ‘ever decreasing circles’ i.e. smaller and smaller volumes for the same amount of work…for sure you will want to get there eventually, but that can be step 2!

4. Get Off The Seat Of Your Pants – the companies who achieve the most in terms of international toy sales tend to be those who travel! If you have the biggest, hottest product in your portfolio, or an international smash hit movie license you can probably get away without doing so until the heat dies off, but eventually you are likely to need to get on the road! Hong Kong, Spielwarenmesse-Nuremberg and New York toy fairs should be pre-requisite annual itinerary items for you to get ahead in the export game. Emails, phone calls and Skype are ok, but really you can’t beat face to face meeting to build rapport/relationships and to work out whether you trust a company to do a good job on your brands/products.

5. Take Short Cuts Via Expert 3rd Party Help – there are international sales reps out there who will cover the whole world for you via one rep/distribution deal, there are regional and market by market reps, as well as Consultancy businesses focused on helping companies significantly increase their export sales. Often these 3rd party solutions are both more effective and cheaper/less risky than hiring your own export sales staff. Reps only get paid if you make sales and get paid for them, some specialist Consultancies charge less than the wage of an inexperienced junior sales person. For instance, my company Kids Brand Insight (www.kidsbrandinsight.com) offers export sales consultancy via TOYEXPORTBOOSTER™. We find that we end up being cheaper than reps, as we charge a consultancy fee instead of % commission, and cheaper than an export sales manager…so once clients see the effects and cost effectiveness of working with us they tend to stay with us on an ongoing basis. There are other similar companies offering the same type of service also…so the bottom line is that 3rd party solutions can dramatically propel your toy export sales forward.

 

STEVE REECE – is CEO of Kids Brand Insight a leading Consultancy to toy companies specialising in playtesting research, factory finding and toy export sales Consultancy. Kids Brand Insight have a database of in excess of 4,000 toy companies, and are in regular contact with hundreds of toy companies. To find out how they can help your business, please visit their website: www.kidsbrandinsight.com