A lot of children live in the United States. According to the US Census Bureau Population Pyramid, there are approximately 60 million plus children living in the United States between the ages of 0 and 14.
China, which has, you will have to admit, quite a different background than America, accounts for 75% of US toy imports. That’s $17,844,052,000 US. That’s a lot of toys.
Commitment: You will need to be fully committed to the venture. Halfway efforts don’t beget halfway results. They beget losses.
This means that you will need to have a national sales organization in place (they can be independent sales representatives), a sales manager in country, a stock keeping warehouse (the entire operation can be leased), and someone to handle accounts receivable and payable.
• Time: You will need to appreciate that US retailers work within a different time frame than do those in the Europe. Presentations are early, purchase orders are late, and ship dates will be within days or weeks of receiving the order. This can be a big challenge if your manufacturing is local. It can be a nightmare if it’s an ocean away.
The only thing worse than not getting an order is getting one and not being able to ship it so you will need to have some inventory staged in the US.
• Size: You need to be geared up to manufacture large runs. Orders can be very large. You know all about Wal-Mart, Kmart, and Target. There are, however, many other companies that are able to buy in large quantities as well. CVS Drug Stores has 5,375 stores, Kroger Supermarkets has 2,530 stores, and Dollar General Variety Stores has 7,700 stores. They all carry toys. (I have added a list of a few other large accounts at the end of this article).
Some manufacturers do not have sufficient equipment to produce the quantities demanded. My recommendation is to either have the capacity or don’t attempt to sell to these large retailers.
• Forecasting: You must work with forecasting that in the first years can be at times meaningless. The lack of a sales history combined with a supply source that is far away can create a major challenge.
My best suggestion is to hire a sales manager who has a history in your product category. He or she should have experience selling these accounts and accordingly be able to develop an inventory model.
• Patience: You must be in it for the long haul. In the US, like the rest of the world, you don’t just reap what you sow; you reap later than you sow and you reap more than you sow. Actually in the US, you sometimes reap a lot later.
You will typically see nice increases in years 2 and 3, and then hit a plateau in year 4. It is at that point that you will need to consider increasing your commitment in order to increase your business.