A colleague told me a curious tale last week with regards to a toy shop owner he recently met when visiting his store.

Whilst walking round the store with my colleague , the owner suddenly stopped in his tracks and started to curse and rave about the product located in the prime position in the centre of the store.

“How much do you think we make on these toys?” Sensing the answer to the question was not going to be favourable as at this point the shop owner has steam coming out of his ears and nostrils, my colleague politely responded “I am not sure – 30-35% possibly?”.

The owner retorted ” I wish I did, can you believe I only get 3% margin and I spent £30,000 on the stuff at the Toy Fair!!!” Passing a handkerchief and a packet of Werthers to the shop owner (my colleague swears by them for all upsetting occassions) , my colleague asked the shop owner why on earth he stocked the product!?

“I don’t know, we always have and it seems like we should have the product available – even if we make no money on it…it’s not as if it brings people into the store – I guess I am just taken along by the welcome on the stand at the fair – my ego is always well massaged!!”

There is no need to accept such low margins on products as there are many excellent products available for customers with very high margins, also these products are not available in Tescos and the like and sell in great quantities. Our margins range from around 45% – 65% depending what price the retailer decides to sell the product. We also have some very fast selling lines that would outsell many big brand names and these are great secrets that our stockists keep well hidden to their competitors and order again and again in lareg quantities.

So perhaps now is the time to start reviewing the lines you stock and if you are selling items with such a low margin…..either give them the “old heave ho” or demand more discount!!! Or of course you could look for something unique and which has a strong consumer appeal with excellent margins. I look forward to hearing from you.

A funny thing happened to me the other day, I was in my local supermarket shopping with my loved one for the weekly groceries – not something I do very often – and was struck by a very weird sight!

Perusing the toy and gift aisles , as I often do, and moaning and groaning to myself at the ridiculous prices being offered, I spotted a familiar face at the end of the aisle with his shopping trolley overflowing with goods coming towards me. Immediately I could see he was not best pleased to see me and quickly considering whether he could slip away down the cooking and home utensils aisle without it being too obvious. My curiosity however would not let him get away and I made a friendly beeline for the surprised shopper cutting him off at the kitchen whisk and melamine cutlery stand!

“Hello” I said to the shopper with his full trolley, who happened to be the owner of a local toy store. “How are you doing, how is business”. I slowly looked down at his trolley and instead of this weeks groceries he had his trolley loaded up with assorted Lego items, board games and other toys. Embarrassingly he admitted to me that he was stocking up for his shop shelves as the supermarket were selling it at a price lower than he could buy it direct from the manufacturer.

What madness is this….retailers buying stock from a supermarket to stock in their own store. Am I surprised by this …..no! And I know that many toy shops selling big name brands are doing exactly the same..my acquaintance is not alone in his weekly shopping trip to stock up his shelves!

So who is to blame for this ludicrous state of affairs? The supermarket, the independent retailer ….no I point the finger at the manufacturer and distributors of these toys who are allowing their goods to be sold at ridiculous prices …all for short term gains. At some point the independent retailers and other larger toy stores will say enough is enough and just walk away from these brands (or copy what they have and dump the manufacturer) and move to brands that are not stacked high and sold low! So is it not about time that retailers took up the fight and stopped stocking such brands – many of which only provide a very small margin on the goods sold.

And what about the toy trade press, what do they have to say about this ……well absolutely nothing. They cannot comment as the culprits (the big boys) who allow their products to be sold at such low prices (often under their usual trade prices) are their paymasters! I hope to see the trade press stand up for the small retailer soon…I won’t hold my breath!