Proper inventory management is important in the toy store
business. Ordering the right products, stocking and selling popular toys can
increase the business profitability. Profitability depends on many factors such
as cost of toys, regular patronage and operational costs.
Over the years big box toy stores have competed to open
retail stores or connect with distributors. Variable estimates in recent years
from 2012 to 2018 are 2.5 to 4.5 percent.
A store owner should be people oriented, interested in
toys and collectibles. They need proper networking, distribution deals and
unique ideas.
The store makes money through the sale of toys. They can
focus on personalized services, home delivery, vending machines, and paid store
games.
• Sale of
toys
• Focus on
personalized services
• Home
delivery
• Vending
machines
• paid store
games
Steps
to Opening a Toy Store
The first step is to write a business plan. Make sure you
form a legal entity, register for taxes and open a business bank account.
Other steps involve setting up a business account and
getting insurance cover. More considerations are establishing a web presence,
define your brand.
• Write a
business plan
• Form a
legal entity
• Register
for taxes
• Open a
business bank account.
• Setting up
a business account
• Get
insurance cover
• Establish
a web presence
Cost
of opening a store
The cost of opening a store depends on many factors. The
costs include location, type of inventory, local taxes, insurance, leasing.
Others are cost of customizing the store, staff wages, advertisement.
• Cost of
location
• Type of
inventory
• Local
taxes
• Insurance
• Leasing
• Cost of
customizing the store
• Staff
wages
• Advertisement
Learn
the trade
You need to have previous experience working in a toy
store or hospitality industry. It is important to have quality mentorship and
basic business knowledge. Learn through apprentice programs, seminars, trade
workshops.
• Gain
experience
• Get
quality mentorship
• Attend
seminars, trade shows
• Develop
business knowledge
Expenses
Toy store expenses are utilities, rent, and staff wages.
Others include insurance, local government levies, advertisement costs. More
are cost of decoration, phone calls, store expenses and transportation.
• Utilities
• Rent
• Staff
wages
• Advertisement
costs
• Store
expenses
• Transportation
• Purchase
of inventory
• Tax
• Government
levies
Charges
The manufacturer fixes the retail price of the toy.
Therefore charges depends on the price of each toy.
The toys attract very small margins and stores need to
sell huge volumes. There are low cost toys and expensive toys. some stores
supplement income by selling non toy related merchandise.
Storefront
To operate a store out of a physical location you can
acquire the property or lease. To purchase the property you need a certificate
of occupancy. The business should conform to zoning requirement and building
codes for renovations.
Legal
Requirements
You need a license and permit to operate. The business
requires sales tax on the products. Register the business as a limited
liability company and you need local licensing.
Staff
Many smallholder stores are one man businesses. However
retail business requires a store clerk, bookkeeper, cashier, store manager. The
size of the store would determine the number of employees you hire.
Get
repeat customers
To keep customers coming back you can offer home delivery
and toy storage. Other ways to encourage repeat patronage sell video games,
offer sweets, promotions and public demonstration. A good strategy includes
advertisement, discounts.
Marketing
The business is highly competitive and you need an
effective marketing strategy. Use newspaper advertisement, social media, deals.
Focus on holidays, special occasions and birthdays. Build a website or online
store to push your products and use customer reviews
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