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Toys’ Hazards – Facts And Tips To Know Before Outsourcing Toys Manufacturing In China

One of my friends wants to invest his idea on a toy and decides to outsource the manufacturing in China. I called a former chief executive in one of biggest toys exporting companies in China and discussed how to make such investment successful. He showed me facts in toy industry in China and gave me some advices. I think some of the points here also apply to other manufacturing industry in China:

Hazard #1:

Intellectual property

The biggest problem is intellectual property. As you may notice, in many cases, the idea of a toy is easy to copy. Some companies may even send spies to their competitors to get the prototype of their toys. How to keep your idea secret is the priority #1.

Hazard #2:

Company varies

True, many companies in China have the ability to produce toys with great quality and low price. But keep in mind no every company has the same competence. You may have to look at their size, history and reputation to select a trusted partner.

Hazard #3:

Rules on international trade

Due to the recent “poisoned toys” problem of Mattel, both America and China restricted their rules on toys imports/exports. People working on toy trades between countries have to study the rules better and pay more on toy safety certification.

Hazard #4:

Money matters

Some of my American friends have the stereotype idea that everything made in China is cheap; so they think part of their salary can make a huge international business. But in toy industry, considering all costs related to design, manufacturing and exporting, an order of 100,000USD is still pretty small. You may have to ensure enough capitalization before investing.

Key to solve those hazards:

Find a right person

Since we are in United States and could not manage all kinds of problems in China. Entrepreneurs in US need to find a right person in China how can handle the whole process from building the prototype till the time toys received by his American partner. This person should be a veteran in Chinese toy industry, and familiar with details on design, manufacturing and exporting. Good personality is also an important issue. You can contact some big exporting companies in China for this kind of person. They are called “Ye Wu Yuan” in Chinese Pinyin (namely, the salesman).

Here are two big exporting companies in China:

Guangzhou Light Holdings Limited

http://www.gzli.com/

GUANGDONG LIGHT INDUSTRIAL PRODUCTS IMP.& EXP.HOLDINGS CORP

http://www.glip.com.cn/

Biggest exporting fair of China: China Import and Export Fair (Canton Fair)

http://www.cantonfair.org.cn

Other Chinese importing/exporting companies can be found at Alibaba (a China-based international trade sites and directory):

http://www.alibaba.com/

Final message: happy investment!

Don’t get afraid by the hazards discussed above; there are always hazards in any business in any countries. And the ability to conquer them is what distinguishes you from your competitors. China, as an emerging market who will keep its manufacturing strong in the next decade, is a perfect place to get your products done and build your dream of getting rich!

Where to Buy Wholesale Toys For Your Business

If you plan to sell toys online or in a shop, it is the best idea to buy the toys you will be selling from a wholesaler or a distributor, versus from a dropshipper you got off a list of potential dropshippers. It is very hard to know which dropshippers are legitimate and finding a reliable one can sometimes take months. Running a successful retail business is dependent on offering great quality products at a great prices.

When you are setting up your toy store, take a look at the competition to see what products are selling well. You can ask other retail toy sellers where they get their toys from and perhaps that retailer will share his source with you.

Another great way to find wholesale toys is to visit trade shows. Trade shows are an excellent place to pick up merchandise. All of the wholesalers will be under one roof so you are able to pick and choose the toys that are priced right and that are good sellers. Trade shows are not open to the public, meaning you will have to show that you have a legitimate business by providing a tax id number at the door. They may require that you show other proof that you are indeed a retailer before admitting you to the show.

Going straight to the manufacturer is another great way to find wholesale toys to purchase. You can find the contact information for manufacturers by simply checking the contact information on the labels of the toy products you are interested in selling. Simply call the manufacturer and tell them that you are impressed with their product and ask if they are willing to sell directly to you. Often they will be willing to sell to you because, after all, they are in business to do just that-sell. If they refuse, then ask who their distributer is so that you can contact them.

You next best bet is to check with the distributors. Their prices will be a bit higher than getting the toys directly from the manufacturer, so keep this in mind. Distributors are eager to sell and you can often purchase smaller quantities from them. Some distributors may even be willing to offer free shipping.

By checking liquidation sales locally, you have a great chance to find wholesale items to sell. Large retail stores have ‘liquidation sales’ wherein they try to get rid of items that they have too many of or that are not selling well in their stores. You can check local classified ads or simply call the larger retailers in your area to ask if they are liquidating any of their toy products.

Finding a great wholesale source does take a big of foot work, patience and just a bit of luck. This is half the battle when you are going to be selling any product. In summary, the best place to acquire your products for your store is the local trade shows. The trade shows is where all the big suppliers meet at one place. You are able to browse through literally thousands of items before making your selection.