Introduction.
If you have a flair for marketing and enjoy being creative, look into starting a toy store business. With a small start-up investment, you’ll be able to build a retail brand and promote your store online and build a loyal customer base. Read the article to understand the toy store business scope, and how you can start your own.
Who can start this toy business?
How do we evaluate a decision of doing business, and what comes to our mind first? Yes, you are right, it is always a retail kind of business. We always tend to do it the way below.
- We always search for a location where a particular kind of shop is not present.
- Next, we look at how much money the sellers make on those products.
- Allocate a budget basis on the deployable cash to buy inventory and rent a shop.
- Lastly, buy inventory from the nearest wholesale market and start selling.
There is nothing wrong with this process, and this has been practiced for hundreds of decades. Hence, I passionately believe we do not require high management implications to operate a 100/200 Sq Ft shop with USD 30K inventory. To run this kind of business successfully the correct selection of products and location is more than enough, I hope you will agree with me.
No matter what you are by education or profession, this kind of business does not require a prominent level of management skill, for me, business is a social science and I believe, our society runs on common sense and people succeed with the capability of observations and smart work.
If you are thinking of starting a retail business you are at the right place, check this small business idea that can be started with a small investment. I bet you that you will be a successful business person if you follow a few simple rules. Please be assured that I am not going to tell you anything like management gurus, please continue reading.
Storefront Details.
This toy business can be started with a small to a medium storefront or from home online, depending upon your investment capacity decide what models suit you best. No doubt, doing it from home can save a lot of money [The cost of setting up a storefront] but having a retail store has its advantage like quick awareness, a professional look, and no doubt extra sales from walk-in customers.
List of things that will cost you to open a retail storefront [ Collected from various internet sources]
- Rent per SqFt
- Onetime deposit
- Interior [Decor, Lighting, and Branding]
- Exterior [ Frontage, Branding, and Lighting]
- Permits and Lisense
- Parking renovation [If required]
- Washroom renovation
- Shelves and storage
- Bill desk
- Billing gadgets and software
Why toy store business?
To understand the global prospect, we will see the trend in two big economies, i.e. US and India.
In India, 2022 to 2025 is the correct time to establish a retail business, in this junction of the 21st century the per-capita income is crossing 2000 USD, it is evidenced that wherever nations when the per-capita income crossed 2000 USD the retail sector boomed. I can see exponential growth in earnings and spending capacity of common citizens of India, else in totality GDP cannot grow, the predictions by IMF, WEF, and WB show that India will achieve the highest growth on the globe in the next five years. There are specific sectors that will lead the race, among them the Toy market is the strong participant
It is expected Indian toy market will reach US$ 2.73 billion by 2027 from US$1.35 billion in 2021, so you can imagine the growth in the next 2 years, it is double the current size. I suggest jumping into this segment and opening a toy showroom in your locality.
If we evaluate the same for the US economy, the toys Market in the USA was estimated at USD22.50 billion in 2021 and is predicted to develop at a CAGR of 4.13% taking the value to USD28 billion in 2027. Improvement in the expenditure potential of purchasers, an affinity for toys amongst youngsters, and digital marketing are the elements that will drive the growth factors.
You may know more about the toy industry, a publication by Fortune Business Insights
Do you know, as per behavioral scientists toys play a key role in the development of children’s minds by helping them to develop their thinking skills and decision-making abilities?
Know before you start.
Let us see how we can open a toy store and how much that will cost us.
I am sure about the success of the retail business during this time, and as I already mentioned there are some rules one must follow to be successful, like.
- You should select a place where walk-in is spontaneous.
- You should deploy not more than 20% of your investment for a shop. Seventy-five percent of your investment should go to inventory and 5% to working capital.
- Should not deal with products that give less than 30% margin (For toys it is 100%)
- Your shop should look well stuffed, hence good merchandising is important.
- A catchy and well-branded exterior is important.
- Remain consistent regarding operating hours.
- Do not use sales revenue without depositing it in a bank.
- Maintain periodical refilling of stocks.
Investment required for toy store business.
To start a toy store business in a downtown, residential, or suburban area 50K USD will be enough, this estimate includes the cost of installing a showroom and inventory. You can take a 100-200 Sq Ft area on the ground floor with a minimum of eight feet frontage and have clear visibility. (Avoid isolated places).
As I said the 50K USD investment is in total, the small-sized showroom will cost a max of 20K-25K USD, and for the inventory, you can keep a budget of USD 20K aside, keeping 5K-10K USD for working capital. You may require a few hundred USD for licensing and business registration.
In India, the overall cost may stand at 5 Lakhs to 15 Lakhs, depending upon the geography and location of the store. India is very diverse in terms of socio-economics, hence, determining real estate costs would be very tough, a ballpark estimation is not to invest more than 20% on establishments.
Things to keep in mind.
- To source, the toys check the local bulk dealers and B2B platforms. Make sure that your buying price gives you space to add a 100% margin.
- Please keep the shop well-lit (interior & exterior both). Offer discounts, and free gifts to the children like candy/ a fancy pencil, or any low-value stuff, etc.
- If you have more money to invest like an additional 50K USD or more remain in the same format and open a few more showrooms in other areas of your city. In such cases, your procurement will be bulk, and the cost of goods sold will come down. While operating a chain showroom please use a retail management system and install a robust monitoring process.
- Please remember, do not block your money in hefty security deposits or leases (for this purpose I have asked to do this business in downtown, suburban, or residential areas). First-time entrepreneurs tend to make this mistake very often, please keep this in mind.
Conclusion.
Opening a toy store is a fantastic business opportunity, especially in the United States. Toys are perennial favorites for both children and adults, so there’s always a market for high-quality, innovative toys.
But in order to be successful, you’ll need to employ some effective marketing strategies. Here are three of the best ones:
- Develop a strong branding strategy: Your branding is what will set your toy store apart from the competition. Develop a strong brand identity that reflects your unique selling proposition and target market.
- Focus on customer service: Toy stores depend on customer loyalty, so it’s important to focus on providing excellent customer service. Go above and beyond to make sure that your customers are happy with their experience at your store.
- Offer exclusives.
Hope you find the business idea apt and interesting, if you want more information, please write to me.
Best of luck!
Thank you Sir for making the whole idea so simple to understand