Today marked the first day that I showed the line to a retail establishment. I walked into a retail toy store in the small town of NC and started chatting with the owner. A fantastically open and sharing gentleman. He spent a good amount of time with me. And, then invited me back to meet a ‘toy rep’ that happened to be coming in later in the afternoon. Here are some things that I took away from each conversation:

Toy Store owner:

  • Other companies have tried the whole dog/horse + accessories thing in the past and did not succeed; good concept but not a hit out of the park concept. However, there were certain items in our line that he thought were really really great.
  • The big toy brands – Hasbro, Mattel, Lego – have or have been or are trying to pull out of independent toy stores (Hasbro has pulled out completely; Mattel pulled out but is back in half-heartedly; Lego I believe pulled out? or was thinking about it but is now back in)
  • Toy store owners hate shipping costs just like consumers hate paying for shipping; they cut into their margins; this gentleman only invited his toy rep in after the toy rep offered free shipping + net 90 terms
  • Payment terms. I knew nothing about payment terms going in (and I wanted to understand payment terms to be able to hold my own in a first sales meeting the following day). Some new brands require a credit card for initial orders. But, most of the time terms are net 30, net 60, or net 90. And, consider yourself lucky if you get paid on time or, sometimes, paid at all (pay attention to which geographic areas or neighborhoods the toy stores are in I was advised). I will have to write another post about the finance aspect of this whole business.
  • The price point for a good product can turn it into a great smashing product. He gave an example of a particular ‘animal’ toy that I or someone else would just take to be a regular kind of basic toy. Supposedly, it is a golden goose for the company. It’s a good toy, basic, appeals to many, and is a very good price point, – which makes it a smashing product. Price can be everything.
  • They want to order things by 4 or 5 or 6.
  • Real estate in the stores is everything. Most stores don’t have ‘dead space’. Dead space is open space and it is usually open for a reason. It might merchandise horribly – be at the back of a store in a corner that nobody goes to. Where will the stuff go?
  • He gave another example of a company started by two women. Let’s say this company makes accessories for girls to be used at school. The product(s) and the company were a big hit. The company was making a lot of $ and reinvested the $ to grow and solidify operations. But, competition was coming in. And, sometimes when something is successful it will spur the notice of the larger guys, the guys that can produce fast at low cost. And, sure enough, competition came in and this company was in for trouble. They sold out to another company – in something that looked more like a bankruptcy sale. Beware.
  • He also advised to beware of two things in the toy business (or physical product business): (1) cash flow, and (2) inventory. It’s all about cash flow. And it’s all about inventory. You don’t want too much inventory. You don’t to be sitting on stuff that won’t sell.


Toy rep:

  • There are these things called ‘toy reps’ or ‘toy representatives’ that represent certain lines of toys on an exclusive basis in a certain territory; for example, you have the New England territory, the New York City territory
  • A toy rep’s job is to go store to store, show lines, and secure orders; they have relationships with store owners/buyers; this rep had some huge account(s)
  • The independent toy store business is in year over year decline AKA it is not a growth business; this toy rep lost 7 accounts last year due to retail accounts closing/going under
  • One of the big three brands listed above (Hasbro/Mattel/Lego) that does billions in revenues makes under 40 million nationally from independent toy stores (independent toy stores really are a sliver of the pie it seems …)
  • I will need to explain something about reps that is hard to communicate with words. It was seeing the rep that really spoke a thousand words to me. The rep comes in with a plastic box. The size of a filing box. And opened it. And, inside there were some 10 binders and catalogs. Each was filled with anywhere between 50 to 350 pages. If this rep had my 20 products to sell on 2 sales sheets, wouldn’t they just get lost in all that? How would it come out? When? How would it get represented?
  • Toy reps generally take 15%. That’s 15% of the purchase order value from the retail establishment.
  • Rep recommended checking out ASTRA and the ASTRA show coming up. ASTRA = American Specialty Toy Retailing Association. In 2016, June 5-8 in Denver Colorado.
  • Reps know accounts. They know who pays net 30, who pays late, who doesn’t pay. Because they have history with these guys. And, because they only get paid when you get paid. So, they know this stuff. He also mentioned that they Big Four (Target, Walmart, Kmart & Toys R Us) – they will push out payment forever – and if they don’t sell it, they won’t pay you.