This year, the toy industry received a significant boost in the United States. And while this has coincided with the need to stay home, studies indicate that it will continue to grow for several more years. This presents a business opportunity for Hispanic entrepreneurs . Here's a guide to opening a toy store if you're interested in this sector.
In this video (5 min): The toy industry in the United States is growing every year, and Hispanic parents are spending money on their children. Here's a guide to opening a toy store: industry outlook, what a business plan includes, how much it costs to open a store (and how to start small by selling online), licenses and permits, and sales tips.
Video transcript
Video Chapters
- 00:00 — The opportunity in the toy sector
- 00:27 — Projection and fastest growing categories
- 01:43 — Is it profitable? The business plan
- 02:21 — How much does it cost to open a toy store
- 02:59 — How to start with little money (small shop or online store)
- 03:25 — Licenses and requirements: registration, business license, signage, fire department
- 04:16 — Tips for selling toys: suppliers, customer experience, trends
- 04:42 — Closure
The toy industry has seen significant growth in the United States in recent years, and studies indicate it will continue to expand, presenting a promising business opportunity for Hispanic entrepreneurs. Here's a guide to opening a toy store.
Industry Outlook. It's a profitable sector because it's constantly evolving, and parents are willing to buy their children's favorite toys. According to a report by the NPD Group, the toy industry grew 19% during the first three quarters of 2020, driven by changes in consumer behavior during lockdowns. The fastest-growing categories were games and puzzles (over 42%), outdoor and sports toys (over 31%), and construction sets (over 30%). Studies predicted considerable growth between 2022 and 2026. To succeed, you must stay on top of trends and children's preferences.
Guide to opening a toy store. Planning is the foundation of success, so start with a good business plan: what types of toys you will sell (know the demand well), who your target audience is (children are the users, but parents are the real customers), what budget you need and how much financing you will request, where the business will be located (a place where children frequently pass by), and what your marketing plan will be.
How much does it cost to open a toy store? It can be expensive, so calculate everything before you start: business registration and licenses, rent, toy licenses (if applicable), purchasing inventory from suppliers, staff salaries, website, and digital marketing. It's possible to set up a toy store with little money with the right strategy: start in a specific niche, such as educational toys, and gradually expand; or sell online, which saves on some expenses, especially if you manufacture the products yourself.
Requirements for opening a toy store. First, register the business; the process and cost vary by state. Then, obtain a business license, signage permit, sales tax license, fire department permit, etc. The Secretary of State's office will provide this information, and you should also research local and federal requirements. It's advisable to seek advice or consult with your registered agent to ensure you don't overlook anything.
Tips for getting started. Look for reliable suppliers and the best value for money. Provide a good customer experience: make your store a welcoming place for children. Learn about the industry and stay informed about the market to better advise shoppers.
Edited transcript for reading of the Hispanos Emprendedores video; the current figures are those of the article.
Sector projection
Are you interested in learning how to open a toy store ? If you want to invest in this industry, you should know the projections for the coming years. It's a profitable sector because it's constantly evolving; plus, parents are willing to buy their children's favorite toys to see them happy.
According to a report from the NDP Group, the toy industry grew 19% during the first three quarters of 2020. The reasons for this boost can be found in changes in consumer behavior, they indicate. The quarantine forced the closure of public places and the children were forced to stay at home, so they needed something to entertain themselves.
In the same report they point out that the categories with the highest growth were:
- Games and puzzles (+42%).
- Outdoor and sports toys (+31%).
- Building sets (+ 30%).
And although representatives of the group that produced the report point out that there may be a decline in 2021, other studies predict considerable growth between 2020 and 2026. The Toy Market Report 2020 indicates that growth will be constant in the coming years.
If you want to be successful in this sector, you must keep track of trends and children's tastes.
Guide to opening a toy store
While opening a toy store is profitable, planning is the foundation of success. Therefore, you should start by having a solid business plan.
In the plan you must include the types of toys that you are going to sell, so you must know well the market demand. You must also define the target audience; In this sense, you must bear in mind that, although children are the end users, their parents are the real customers.
Calculate the budget you need and how much financing you should ask for.
The business plan of a toy company should also include where the business will be located, choose a site where children travel frequently. Finally, include what will be the marketing plan to promote the business.
How much does it cost to open a toy store
Opening a toy store can be expensive , so you should calculate what you need before you start.
In addition to the money you need to register the business and get the necessary licenses, there are other expenses to consider. Among these we can mention:
- Rental of the premises.
- Cost of toy licenses when applicable.
- Purchase of toys from suppliers.
- Payment of salaries for store personnel.
- Investment in the website and digital marketing, among other expenses.
It's possible to start a toy store with little money if you have the right strategy. For example, you could begin in a specific niche like educational toys and then gradually expand from there.
Another alternative is to sell toys online , which saves you some expenses. This is a good option if you manufacture the products you're going to sell yourself.
Requirements to open a toy store
Like any other business, there are a series of requirements that you must meet to start your store. The first thing is to register the business, the process and the cost of this process will depend on the state where you are going to do it.
After this you will need to get the business license, signage permit, sales tax license, fire department permit, etc. The Secretary of State's office will give you all the information you will need.
You should also find out the requirements that are required locally and federally.
Although you can find out all this information yourself, it is convenient that you seek advice so as not to overlook anything. You can also check with your registered agent.
Tips to start your business
Finally, we'd like to give you some tips for selling toys , take note of them:
- Look for reliable suppliers, explore well the options you have to get the best value for money.
- Providing a good customer experience will be your best ally. Make your store a kid-friendly place.
- Learn about the sector and stay informed about the market. This will allow you to better advise buyers who come to the store.
This guide to opening a toy store provides you with the essential information to start your business. If you're looking for advice or want to learn more about your store, please don't hesitate to contact us.
Related Notes:
Read the Hispanic Entrepreneurs magazine
