Why Seeking Alternative Toy Distribution Is Often A Missed Opportunity For Toy Companies

Why Seeking Alternative Toy Distribution Is Often A Missed Opportunity For Toy Companies

Selling toys to retail is hard. It’s hard for one major reason – the level of competition. Spielwarenmesse, the world’s biggest toy trade show, held (normally!) every year in Nuremberg, Germany estimates that there are 1m toy products on display at that show. And that isn’t even every product that the exhibitors run. There are literally millions of toy products on sale each and every year.

What this means in practical terms is that for each and every product you want to sell, there are dozens, maybe even hundreds of other products trying to get on the same retail shelves and trying to get prominence on the same e-commerce platforms. The toy business is one of the most ridiculously competitive businesses out there. Every time you preview your products to a retailer at a trade show you are fighting for attention versus literally thousands of other products they have seen.

Aside from the competition though, another major challenge is that retail buyers come to know their categories really well. They develop very fixed ideas of what works in terms of products, packaging and price points. If you have a product which sits outside there view of what toys in their category should be, then selling becomes really hard.

None of this should be news for anyone who has ever tried to sell a product to retail. But what is remarkable is how few toy companies put serious effort, resources and opportunity cost into breaking out of the shackles of the normal system of doing things. The world has changed so much, yet for many toy companies getting up to speed on Amazon & how to market & sell on social media is their primary adaptation.

One fundamental insight which we see time and time again is this – why would you spend all your time and efforts trying to be one of many products in traditional toy retail when you could try to be one of one via non-traditional outlets?

There are so many good examples of how to do this – we’ve seen companies running corporate gifts using personalised versions of classic toys & games – for instance, the board game Monopoly is offered in customised ‘special editions’ in various countries around the world. Or maybe it’s a bespoke product created specifically for a particular company, brand or organisation. It might be just selling a product with a particular theme to retailers you (& all your competitors) don’t normally sell to.

Another example of non-traditional retail is the educational sector. Although this comes with a minefield of bureaucracy and unclear purchase responsibilities, the education sector is not as price sensitive as retail. Often the person buying toys & games is also buying other forms of equipment, so they aren’t experts in the space. Moreover, they aren’t needing to buy at the best possible price so that they can make a profit, they are instead just spending a budget that is given to them, and while schools and educational organisations are often working on tight budgets, their purchase managers quite frankly lack the commercial ‘smarts’ and hard-nosed approach of retail buyers.

So, next time you come back from a retail meeting wondering why this has to be so difficult, why not try to sell into some greener and untouched pastures?

 

Have you listened to our PLAYING AT BUSINESS podcast? We analyse key areas of the toy and game business, we interview leading people in the business and we discuss major trends and changes across toys & games. You can listen to numerous episodes here: https://playingatbusiness.libsyn.com/

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