Regardless of the economy, as long as parents are raising children, toys will be necessary. In 2019, the average spending on toys for each child in North America was $300. According to recent assessments, there are more Barbie dolls in the US than people. Toy companies and retailers may increase their profit margins by adopting a few basic procedures when developing price structures. Read on for a few tips on structuring your pricing for maximum profits and good business.
1. To make a profit, your pricing structure must surpass your costs, whether you’re producing, distributing, wholesaling, or retailing toys. Before establishing pricing for your toys, calculate your overhead expenditures and write a complete description of your operational expenses. Include all tools, supplies, equipment, materials, labor, shipping, and marketing and advertising costs.
2. Learning what toys the target audience wants is important in determining how to establish a toy price structure. As a result, do market research. By incorporating market research into your sales strategy, you can guarantee that you offer in-demand products at competitive costs. Create your own data analysis operation with an in-store or online questionnaire, or hire a market research agency to assist you.
3. Look over recent consumer reports. Toys are frequently covered in consumer reports owing to parental worries about their safety and value. Review consumer reports on toys and games to determine which toys parents favor and just how much they are ready to spend on them.
4. Evaluate your competition, since no matter how sensible your pricing is, if competitors are selling the identical items for less, you’ll have to match or beat them. Check out the nearby toy and departmental stores to determine what your rivals are charging. To obtain a notion of national and worldwide prices, look at web toy stores or e-commerce sites.
5. Use attractive pricing points. Many people, especially toy purchasers, already have a budget in mind when making purchases. The sort of toy purchased is influenced by the amount of money available in certain circumstances. Create merchandise categories that correspond to typical price ranges, such as “under $100 bicycles,” “under $25 video games,” or “under $5 puzzles.”
6. Determine your place in the toy industry. Toy buyers’ interpretation of your prices is an important element in determining your pricing structure. If you want to be an affordable toy shop, you’ll need to provide much cheaper prices than your competitors. The higher cost may be necessary to establish a reputation for high-end, high-quality items.
7. Speak with the chamber of commerce in your area. Standard pricing plans for some retail items and services exist in some localities based on income levels and spending patterns of local inhabitants and, in some cases, visitors. Check with your local commerce and trade associations to discover whether such resources exist in your area and if price structures for toys are included.
8. After all the decisive factors, you now need to promote your toys. You can select how you’ll communicate what you offer to potential buyers only after completing your pre-launch study. Your advertising should stress your advantage, instead of your company or product, by concentrating on your clients’ wants and issues. Identify where your target consumer would most likely see, read, or hear your message using media kits.
Potential advertisers can get circulation, viewership, and visitor information from radio and television stations, websites, magazines, and newspapers, and this can assist them in making the best media buy. To build a multi-faceted marketing effort that promotes your message using numerous channels, combine in-store promos, sales, discounts, rebates, competitions, and a wide-ranging social media campaign.