This article is the first in a series looking at Toy & Game export sales as we head into toy fair season.
Unless a toy company is fortunate enough to have the U.S.A. as home market, sales to other countries are likely to be an important component of justifying product development investment.
Even if the USA is your home market, it accounts for less than one quarter of the global market opportunity. The reality is that selling outside your own country is an essential part of your sales opportunity and if you don’t effectively and efficiently maximise that opportunity you are far less likely to build a successful and sustainable toy business.
The challenge though is that there are a lot of countries and potential customers out there, so developing the right approach and strategy needs some thought.
Here are 5 quick tips on how to grow toy export sales:
A. Attend The Right Trade Shows
If we could only suggest one tip to help toy companies expand export sales it would be this one. Trying to cold sell to companies you have never met, whose first language is not your own can be really tough. Even if you are really good at selling it takes a great degree of time and grind. At trade shows you can access hundreds of potential customers in a relatively short time and often set up a whole years business in just a few days. For those who are newer to the industry, the key trade shows for export sales are:
New York: http://www.toyfairny.com/
Distoy (London): http://www.distoy.com/
B. Focus On Bigger Markets First
When you attend trade shows you tend to come back with a raft of new contacts and sales leads. It is of course human nature to follow up all of these to try to sell. The challenge though is that each new market you enter has local needs – regulations, languages, trading conditions etc. It is not possible to be an expert on every toy market in the world. The most common mistake we see in toy & game companies is trying to sell to every market in the world, but what tends to happen is that the smaller markets which get far less focus from everyone are often the easiest to get deals done, but then the need to service those customers takes up more and more time until your export team is spening a disproportionate amount of time chasing small orders. The biggest toy markets in the world tend to do the highest volumes, so sometimes less is more – forget global domination (at least for now!), picking 3-5 major markets & ensuring you have great partners in those markets will deliver way more than chasing every opportunity in small markets.
C. Follow Up
Conversations are often positive at trade shows, but the hard reality is in the purchase order, and the process from first positive conversatioons to purchase order can be long. Having invested in trade shows and spent all that time creating opportunities don’t let good opportunities drift away due to lack of follow up. At trade shows companies can review hundreds of opportunities, but back in the cold light of day they need to make choices and focus on what they will actually spend money on, and the reality is there are always far more opportunities than can be followed. So stay in touch when the customer is back in the office & keep things moving along in your direction otherwise your customer might choose someone else’s products instead of yours!
D. Network relentlessly
If there was one piece of advice we would give to a youngster just starting out in this industry it would be to network relentlessly. It is of course a cliché, but the saying ‘It’s not what you know but who you know’ is so very relevant in the toy industry. Investing time and effort in building good relationships with other people in the industry both makes your working life more fun as well as more effective. There are people you might have met 10 or 15 years ago who are perfectly positioned to benefit from your next project, but if you didn’t keep in touch or if you annoyed them along the way, then both you and they will lose an opportunity.
E. Accelerate Your Export Sales Via Agents/Consultants
Working with sales agents is standard practise in the toy business. Whether they sell to a specific retailer or to specific markets or regions, sales agents offer big sales opportunities for no or little upfront cost. You will eventually end up paying agents commissions though, which then comes out of every future sale you make. The challenge with working with agents is that they have to work hard and sell a lot of products to make a living, so they are inherently likely to push what is the easiest sell. If your product line is a harder or more complicated sell, or if the volumes are low, then they are far less likely to push your products. if you have a hot seling product range, agents should be able to do a good job for you (if you pick the right ones!).
Consultants are at first glance less attractive, in that you have to pay them upfront for their work with you. However, the benefit is twofold:
1. They do not cost you much larger sums if they are successful in selling your product like a sales agent would, as there are not future commissions to be paid
2. Rather than focusing on the easy wins to chase commission, a good Consultant should take a broader look at your business. For instance, you may think your export sales team are under performing, but it might be that your product is only culturally relevant in your market unless a few changes are made. It might be that your pricing is out for major export markets, or it might be that your competitive positioing is not strong enough. It could be many things – and a good Consultant can help you identify these issues for the cost of a few months of Consultancy retainer.
This article was written by Steve Reece on behalf of Kids Brand Insight. We have sold toys & games into more than 90 countries worldwide across a twenty year period. We work on a Consultancy retainer basis to help toy and games companies grow their exports. For more information, please drop us a line or go here for more information: http://www.kidsbrandinsight.com/services/