Business is War – the Davids and Goliaths of the Toy Industry

Life and business is full of surprises – that's part of what makes it so interesting. I recently heard from an industry veteran – now the captain of a small toy company – that contrary to what one might expect, a smaller toy company can get better pricing out of a factory than one of the majors.


This may not always be the case, perhaps, but it certainly does happen. Despite the fact that a big company will often do ten times the volume of a smaller one, the large company will still pay more for its goods because it is known to have deep pockets and can afford to pay more. Hmm.

This trend is very interesting and ultimately beneficial to the health of the industry because in giving some costing advantage to smaller companies, the factories make it somewhat easier for them to compete and survive against their far larger competitors.

From another well-placed source in the toy industry I have found that the major retailers "don't like" one of their largest preschool vendors because they don't make money on their products, and they are not bringing enough innovation into the category to drive consumers to the store. The result will be that retailers will shrink that large preschool company's shelf space to make more room for other preschool toy suppliers that can bring innovative product into that space.

One would think that such a large supplier of a major category like preschool toys would work harder to please their retailers by providing adequate margins and enough innovation to drive store traffic. Is there a head in the sand here? It is easy to become complacent and forget that business is war.

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