We live in a world where toys are the key to unlocking unlimited joy and wonder, especially for children. If you’ve ever wanted to spread that joy, learn how to start a toy business and create more happiness.
However, starting your own toy business might be more challenging than you thought. You may not survive the tough competition in this sector unless you think carefully about your plan and operation beforehand.
This article will give you some insightful information about how to start toy manufacturing business effortlessly. You can discover them all below from market researching, branding to promoting and distributing your products.
Contents
1. Is the toy business profitable?
Many entrepreneurs in the toy industry have wondered this question before joining the toy market. The following fact might give you positive hope for your business in the future.
The toy industry has consistently proven its profitability through steady growth and demand worldwide for years. According to Statista, the global revenue of the toy industry surpassed $107 billion in 2022 and is expected to reach over $120 billion by 2027.
Additionally, the COVID-19 pandemic has shifted towards remote work and online learning, creating a need for toys that support virtual interactions and educational development.
As a result, the toy market has adapted to meet the changing consumer demands with products like puzzles, board games, tech-enabled toys, and outdoor play equipment.
With its proven profitability and evolving consumer needs, there are many fantastic opportunities for ambitious toy entrepreneurs like you to capitalize on this thriving market.
2. How to start a toy business online in 7 steps
Figuring out how to start a toy business might seem overwhelming since there are so many aspects you need to consider.
Don’t worry! The following seven crucial steps on starting a toy business from home will guide you out of the maze and set you on the path of success.
2.1. Research market
Defining the target market is essential for any business owner before starting their own. Similarly, you must know who you will sell the products to before opening a toy store.
Once you’ve defined your target market, the rest of your business plan will be streamlined, regarding choosing your business name, selecting the toys, or pricing your products.
Your ideal clients may vary depending on your toy business plan. When deciding your target market, it’s important to be as specific as possible. Collect detailed information such as:
- Age range
- Gender
- Interests and preferences
- Consumer behavior
- Location
Besides your target audience, research your competitors too. Look at:
- Their toy range and their products’ unique features
- Their target audience
- Their brand identity, messaging, and marketing channels.
- Their customer feedback and review
Ask yourself, “Why should customers choose my shop? What set my toy business apart?”. Such thorough market research can help you identify a market niche your store can fill in.
2.2. Create your brand
Once you’ve identified your niche, you can build your brand identity in customers’ minds. A strong and unique presence can elevate you above your opponents and catch the eye of potential clients. To achieve this objective, take into account the following factors:
2.2.1. Business name
Your business name can be a game-changer in this highly competitive market. Find a name that stands out from your competitors and captures customers’ attention.
If you’re starting an online toy business, check the availability or the domain name.
2.2.2. Mission statement
Your mission statement should answer the question, “Why did you create your business?”. A clear mission statement will help your customers understand your business better and showcase your passion and purpose. Your brand should encompass your mission and vision, from its logo and slogan to its imagery and character.
By conveying your company’s enthusiasm and sincerity, you can develop a brand that resonates with your target audience, making them familiar with, appreciate, and have faith in your business.
2.3. Calculate the budget
Now you’ve got the general image of your company, the next step to start a toy company is to calculate the budget you need.
At the early stage of your shop operation, you should prepare the budget for the following basic costs and fees:
- The purchase cost of the toys: If you’re not a toy manufacturing business, this cost can be a considerable proportion of your total price since you must buy toys for resale.
- Logistic cost: This includes the domestic and overseas shipping fees (if your suppliers are overseas) when you ship the products to your warehouse.
- Customs duty: If you import toys from other countries, the cost of customs duty will be included in your purchase price. The amount of customs duty varies depending on the toy type. Moreover, you might need to pay for some special certificates needed for customs inspection and clearance following the local regulations.
- Hiring staff: To ensure the smooth and efficient operation of your business at a larger scale, it may be beneficial to expand your team by hiring additional staff.
It is also important to consider the following costs in your planning process when you want to open an online toy shop business:
- Promotional fee: You must invest money in promotion to attract more customer volume to your shop. The two most common channels to promote your shop are Google ads and affiliate marketing.
- Pay-per-click (PPC) fee: This advertising model will spare you the effort to gain customer volume and ensure your ads are shown to relevant customers. PPC allows you to set a budget and control your advertising spending. You only pay when someone clicks on your ad, so you have more control over your expenses and can allocate your budget effectively.
- Online store operation fee: To ensure that your online shop runs smoothly, you need to invest more operational money in your shop, such as e-commerce platform fees, transaction fees, website hosting, etc.
2.4. Find your suppliers
Next up is to discover a trustworthy wholesale supplier. Choosing the right suppliers is like a gamble. Choose wisely, and you’ll have a reliable supply of quality toys at competitive prices. Get it wrong, and you’ll waste precious time and money while struggling to make a profit.
Most toy shops import toys from China or wholesale them from local markets. We will provide you with some advantages of both channels so you can make the best decision for your business.
2.4.1 Local suppliers
- Faster shipping: Local wholesale suppliers offer faster shipping time than overseas suppliers. You can restock your products more quickly and provide faster shipping service to your customers.
- Better communication: Clear communication is a crucial factor in a successful business contract. You can communicate in the same time zone, language, and cultural context without the limit of borders to ensure a smooth business relationship.
- Lower Minimum Order Quantities (MOQ): If you have a small business or want to test new products or variations before committing to larger quantities, local suppliers might be the better choice for you.
2.4.2. China suppliers
- Competitive prices: China has lower manufacturing costs than other Western countries, allowing you to offer more competitive prices to your customers and increase your profit margins.
- Wide range of toy products: China has a vast manufacturing industry, offering you a vast selection of toys regardless of design, style or purpose. This provides you the flexibility to choose and cater to different customers’ preferences.
- Customization: China suppliers are open to your customization request, allowing you to design products that match your brand identity.
2.5. Choose the selling platforms
Picking the perfect selling platforms is a crucial element in starting a successful toy business. Today, the rise of online shopping has proven the impressive capabilities of E-commerce platforms for many entrepreneurs.
But with many options available, it’s important to weigh each platform’s unique features and strengths carefully. To help you gain more insights about these platforms, we’ve listed out some key comparisons for you to consider:
2.6. Price your products
Once you’ve set up your internet shop, it’s time to figure out your goods’ price. Don’t charge too little or too much; it can really shake up your sales. Consider manufacturing costs carefully when setting prices and make sure your selling price covers all costs. This will support your business’s prosperity.
Here are some key elements to remember:
- Market research: Perform comprehensive market research to grasp your target demographic, competition, and current pricing trends. Remember that most customers will compare and select the most advantageous product for them.
- Value Proposition: To have customers see the worth in your products, showcase the key benefits, features, and edges over competitors. This helps products align with their value and justify the cost.
- Discount: Offering reduced prices can bring in customers and boost sales. But make sure the discounted rates still let you cover expenses and earn adequate income.
2.7. Promote your products
The last but also essential step is to promote your toy business. Even when you can produce the best toy, that will mean nothing if people are unaware of your existence and offerings.
You should collaborate with your marketing team to develop a suitable marketing strategy for your toy store products. Here are some effective approaches for promoting your toy shop products online:
- Search Engine Optimization (SEO)
- Product Reviews and Ratings
- Pay-Per-Click (PPC)
- Email Marketing
- Social Media Marketing
- Content Marketing
- …
It’s important to track and analyze the performance of your online promotions through analytics tools, no matter what strategy you use. You should continuously refine your strategies based on data insights to optimize your marketing efforts and drive better results for your toy shop.
3. Toy business examples
Let’s explore some impressive examples of successful toy businesses! These real stories can give you precious insights and inspire you to build your own.
3.1. Aurora World
“Aurora World” is a leading high-quality example for you to learn how to start a plush toy business. Their plush toys are crafted with the utmost care and attention to detail, ensuring exceptional quality and softness that children of all ages will adore.
They now focus on eco-friendly plush toys since 2018, contributing to our environment’s sustainability while delivering smiles worldwide.
3.2. Build-A-Bear Workshop
“Build-A-Bear Workshop” is another popular toy brand where children can create their own stuffed animals. They have an online platform where customers can customize their plush companions.
The brand is famous for its creativity, interactivity, and strong presence, both in-store and online. Take a look at them and you may realize the secrets of how to start soft toy making business.
3.3. Creative Play
“Creative Play” is an innovative toy manufacturing company that brings imagination to life and sparks creativity, learning, and play among children. Their product portfolio includes building sets, construction toys, puzzles, and educational toys designed to engage children in hands-on exploration and problem-solving.
Their products are suitable for kids aged 5 and above due to the presence of small and fiddly pieces.
Want more? We have analyzed the best Shopify toy stores online to see what they’re doing well so you can apply to your own store. Check it out!
4. Conclusion
The journey to a successful toy business can be a rewarding journey but it requires lots of dedication, time, and effort. But don’t be discouraged because you can transform your love for toys into a flourishing business with the right mindset and strategy.
So don’t hold back, take the leap toward your dream toy venture today, and let your passion pave the way to triumph!
We hope we have given you valuable insights into how to start a toy business effortlessly with our 7 step-by-step guides above. If you’re looking for more tips and insights to kickstart on your business, check out our eComStart website and other business starting guides for more information.
5. FAQs
