While people were making and taking orders at this year’s Toymaster show, in a secret room, above the event, ToyNews gathered a selection of toy retailers for a no holds barred chat about their businesses.
Our panel is, from left to right...
In his seven years as a toy retailer, Jason has opened seven shops. He used to be strictly bricks and mortar, but now occasionally dabbles in eBay and Amazon trade.
Toymaster’s marketing and operations director has been a member of the toy trade for 31 years, and Toymaster itself for 13 years.
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The only non-Toymaster member on the panel, Helen runs an independent toy shop in Dumblane, Central Scotland. She’s a firm believer in customer service and has forthright views on pricing.
David started his first toy shop straight out of university and now owns two stores, in Burton-on-Trent and Derby. He has been a member of the industry for ten years.
ToyNews: How has the past year been for you?
David: The last 12 months have been pretty good. We’ve expanded quite rapidly. Most of our trade is on the internet though, through eBay and Amazon. That’s the direction the market is moving to – away from the High Street and more online. It’s about having the right thing, at the right time, at the right price.
Helen: It’s customer service that is bringing people in – they want people who know about the products. The online side is okay, but because of the likes of Amazon and eBay, we’re out of the market before we’ve started.
Jason: I agree. It’s the customer service which makes us stand out from anybody else. Amazon and eBay has destroyed the percentage of trade because everybody wants something for cheaper now. However, I guess it is something we can take advantage of when something is selling for more online. For example, last Christmas we had the Bat Cave from Mattel sat on shelves for £59.99. It wasn’t selling, until one guy came in and said: “I can’t believe you’ve got that, its selling for £100 on eBay. Have you got any more?” Luckily I was there to tell him no, knowing we had six left.
Helen: So did you raise the price in store, or did you put it on Amazon?
Jason: I put it on Amazon – when you’re selling it there you’re not a face, you’re not really a person. If I put that on the shelf at £99 or £75, we would get customer complaints.
Helen: I find a lot of people will come in and quote online prices at me. Someone came in saying that a particular Skylanders set was £14.99 on Amazon and I looked at him and said: “Yeah, but they’ve not got any.”
What’s your opinion on Skylanders?
David: I’ve sold about 4,000 since Christmas. It’s big business.
Jason: The problem for us is the margin. Unfortunately from what I’ve seen you’re only achieving around a ten per cent margin on these products.
David: You’ve got to look at what the market is doing – Amazon is setting the price of Skylanders at the moment. If you’ve got six Skylanders and two of them are £20 on Amazon, we do it for that price and nobody moans.
Helen: Well I’m a parent, and one of the things that bugs me is this idea that because your kid absolutely loves a product, you’ll go out and spend an absolute fortune on it. We’re selling the triple packs and the adventure packs for £19.99, and the single packs for £7.99.
Ian: It’s very difficult, it’s down to individual businesses.
David: As long as the toy industry gets supplied, that’s the main issue. We knew for a long time that this toy/video game crossover was coming out, but only the video game industry was getting supplied. [Speaking to Ian Edmunds] I rang you guys last year and nothing happened.
Ian: We’re not interested in it if it’s not end of month plus 90 days and it’s not going to make a margin in excess of Lego, which is 34 per cent.
David: I understand that, but on the other hand, we didn’t have the hottest product there is. If Skylanders is the hottest thing we’ve got to have it. That’s why we had to source it from outside of Toymaster.
Do you think Activision could come round to toy industry margins?
Ian: Having met them in Nuremberg they said there’s more chance of me winning the lottery. They’re on a different planet – they don’t talk the same language.
What will be the hottest toys out this Christmas?
David: Skylanders Giants, definitely. I think Moshi Monsters and Angry Birds will still be hot at Christmas.
Ian: The Biggest ranges are going to be Lego City and Star Wars.
Helen: I’m not sure how all the app toys are going to sell. I still have this thing as a parent, where I ask, am I really going to give them my £600 phone to play with?
How much attention do you pay to the amount of marketing a toy gets?
Jason: I do to a certain extent – I won’t buy it if it’s too highly advertised, because that’s the toy that everyone else has. Then when everyone’s got it, the big boys then slash the prices on it.
Ian: If you look at our catalogues we are not the destination store for the number one toys. Are we going to sell lots of the accessories? Yes. The second or the third best line at a £20 price point. That’s what people spend in our shops.
They aren’t going to come in and spend £50, they don’t associate that with us.
David: For us it’s the other way around. If something is TV advertised you’ll see a massive sales boost in our Derby store. The Angry Birds Character Options toys sat on the shelves for three or four weeks, then the TV ad started and sales went through the roof. If it’s going to be on TV, it gives confidence they’re putting the effort into the toy.
What are the biggest challenges facing indie toy retailers?
Ian: The same as all other independents – rents and rates. The High Street is changing. The landlords are living in the dark ages. If the rents change, you’ll get the independents coming back and the High Street will be reborn.
Helen: It’s no longer shops thinking about themselves, it’s about making sure the High Street becomes more of a unit than it has been in the past.
What are the benefits of being a Toymaster member?
David: The main reason we joined was because the business was expanding so fast. We were struggling on credit limits. We were chasing stock constantly. Joining Toymaster opened the doors to be able to place orders and have the stock turn up without constantly having to pay bills and chase around, and worry about not getting stock on time.
Ian: That’s going to hold back your online business more than anything.
David: Exactly. If we wanted to deal with a new company, we had to go through the rigmarole of filling out account forms and doing credit checks – it could take three of four weeks. Now I just pick up the phone and say “I’m a Toymaster member”, and it will come in two or three days.
Jason: To be able to go to a company that you’ve never dealt with but has a product you want to buy. You haven’t got to worry about anything other than phoning them up or emailing and saying “can I get a hundred of these”, and it’s there. I hated the idea of a catalogue. But last year we tried it in our Fleet store and saw a 15 per cent increase in sales. It’s opened our eyes to the fact that just because we’d not normally buy it doesn’t mean it won’t sell.
Helen, do you find you have these problems as someone who is not a member of a buying group?
Helen: I have come here to learn more about Toymaster, and through chatting to people it seems like we all have the same frustrations.
It can be a pain filling in account forms but because I have a banking background I don’t find the invoicing hassle. However, I’m not very good at giving up control.
Ian: Well you don’t have to do anything. We’re like a drop down menu on a computer. You choose what you want to do. There’s never a right route with any of this stuff.
The Toymaster event is about meeting like-minded people. The first thing people ask about is the discount. It’s nothing to do with a bloody discount. It’s about knowing whether this one sells better than that one.
Helen: I think it’s fascinating to come to Toymaster and finally be able to talk with loads of other independent toy retailers.