So Foreman had to decide which Basic Fun toys would focus on sending to stores for the holidays. And he had to do it in September, so the goods would arrive on time.
He found an easy answer to a complicated problem: little squishy toys.
About 85% of toys sold in the United States are made in China, according to the Toy Association, an industry trade group. Insufficient shipping containers, limited cargo space on ocean-going vessels, and skyrocketing costs have forced toy makers to make many compromises on the most profitable merchandise to ship these vacations.
A solution to container constraints, say toy makers, stores and analysts: export additional smaller units and remove larger ones.
âBusinesses need to think about how they make the most of every cube of space in a container,â said David Garfield, head of consumer products practice at consulting firm AlixPartners. Toy makers have revamped packaging to optimize space and ship more products by container, he said. In some cases, this has resulted in a reduction in the actual size of the packages. In others, it means limiting the extra accessories in the box to keep packages lighter.
Basic Fun holds $ 150,000 worth of Mash’ems – soft, spongy, water-filled collectibles with characters like Spider Man, Disney Princess and Harry Potter – in a container and $ 100,000 of Cutetitos, small animals plush wrapped in a burrito blanket.
“It’s a simple case of the sales volume in the container when containers are hard to find,” Foreman said, adding that with these little toys, “the packaging is the size of a golf ball.”
On the other hand, Basic Fun can only stack $ 40,000 worth of Tonka trucks and $ 80,000 of Care Bears in containers. So Basic Fun has limited the amount of Tonka Trucks and Care Bear animals shipped, instead of raising prices to compensate for its higher costs.
âI would rather sell fewer trucks and not have to increase the price exponentially because I will be selling trucks again next year,â he said.
Choppy balls and small animals have priority
Other toy makers are making similar decisions.
Yogibo, which sells toys, home decor, and bedding, decided to prioritize shipping small items like Squeezibo, a gel ball, and Mates – cuddly little stuffed animals – instead of blankets. and pillows “because they take up a lot less space and offer a higher value for the same volume,” said CEO Eyal Levy.
In a 40-foot container, Yogibo can hold 200,000 Squeezibo units – $ 1.6 million in sales – and 15,000 Mates worth $ 400,000. But only 2,500 blankets worth $ 200,000 in sales fit in a container.
The company, based in Nashua, New Hampshire, and selling through its own retail stores, Amazon, and specialty retailers, made the decision to focus on shipping these small items in mid-September, after struggled to get hold of containers.
âOnce we realized that the containers were being delayed week after week, we started the prioritization process,â said Levy. “We were running out of time.”
This year, toy maker WowWee sent in more of their My Squishy Little Dumplings – bite-sized dumplings that make popping sounds that kids can squeeze and throw – and their Got2Glow Fairy Finder, a jar with 30 virtual fairies, at retailers such as Amazon, Walmart and Target.
âFreight and containers are expensive, so we’ll prioritize small, high-speed items,â said Andrew Yanofsky, head of marketing and operations for the Hong Kong-based company. He estimates that $ 245,000 worth of pellets goes in a 40ft container and $ 535,000 of Got2Glow jars can be shipped.
The company has canceled the shipment of Pop2Play, a pop-up play slide. Only $ 61,000 worth of slides can fit in a container, Yanofsky said.
âIt’s a great toy and it sells well, but the problem is only a few thousand adjustments,â he said. “When the margins are low and the footprint is large, items like this are going to be shelved.”
Decisions by manufacturers to prioritize smaller toys are impacting the vacation inventory available for some toy stores.
Rick Derr, owner of Learning Express Toys in Lake Zurich, Illinois, said he started noticing in the spring that smaller, lighter items were more plentiful. It brought in other vendors to try and fill in the gaps on bigger items like dollhouses, playsets, and mazes.
âWe will be moving to smaller itemsâ on this holiday, he said. “If you sell enough, you can [sales] that we lose by not having the largest objects. Specifically, Derr expects to be able to sell more small choppy toys, Pop It! Silicone toys, small arts and crafts kits, puzzles, and card games.
“They will be in much better shape this year,” he said. What will be rarer in his store this holiday: “The biggest items”.