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