Tip #1: Keep Inventory In Check
My recommendation is to bring in product that you can turn relatively quickly. With the economy the way it is, you don't want to be overstocked with stuff that is sitting for months and months.
I've noticed that a lot of people oversize their retail stores. You are better off if you maintain a smaller space with stock turning more quickly than trying to grow so big. You can't just take toys and games, stick them in the store and think they're going to sell themselves. You should place the product where people can play with it and look at it, and you want it to be interactive with the customer.
Tip #2: Know Your Market
You want to visualize what people can do with the toys or games, so it's important not to just put stuff randomly in the store, but to display it in a way that people can actually see why they want to buy it.
Also, match your toys to what people are going to buy in your market. If you are primarily an aboveground market, you may not be selling a $99 elaborate lighting toy. If you are in an ultra-fancy area, where there are $200,000 gunite pools, those customers may be more willing to buy expensive items.
If you are bringing in a new item that you have not tried before, bring in a small quantity and make sure it holds up. I have had items that look really great at the show, but they didn't work or they broke or they didn't perform when actual children played with them.
Also, look at safety issues with toys and games in terms of what children will do with them. If they beat up their sister with it, you might not want to carry it. I was nervous about carrying torpedoes when those came out because I envisioned somebody whacking their sister over the head with the rocket. When grown men were coming in and begging for them, I caved and bought them for the store.
I had a guy come in with his 2-year-old daughter, and I knew he was buying it for himself. Sometimes the grown men like that stuff better than kids.
Tip #3: You Can Compete With Big Box Stores
While you may have a tough time competing with big box stores because there will be a certain number of impulse purchases in there that you aren't going to get, I say if they can buy it cheaper at Wal-Mart, let them. Sell something of quality in your store that isn't in Wal-Mart. Let those stores sell the cheaply made toys and games. It'll sell, but if people are constantly bringing it back, then it may not be worth it.
Some of the suppliers will note what they are selling to mass market and some will not. Obviously they are going to go where the big bucks are, and you can't expect them to protect us, but some of them do have products that they sell just to the trade. That's worth trying to find out.
There are markets where there are no big box stores and there are markets where you may be so saturated with mass merchants that you'd want to cut down on that type of product that you carry. In general, you will loss-lead things that you are competing with the mass merchant on and raise the price on things that they're not going to be carrying. You want to aim a retail store toward an overall margin of about 40 percent. Toys and games you jack up a little more than that - usually double the price of what you pay for those items.
Tip #4: Find Something New
I recommend shopping the shows and going to the remote corners where there are new, innovative products that may not be what everyone has.
After I found the Aqua Golf game, I would hold little tournaments on Saturdays where people would get a chance to win for every $50 in products they bought. And at the end of the day, I'd call the person who won and give them a $10 gift certificate to the store. I added about $3,000 profit that first year I sold the game just doing that and on that one item, so it was really effective.
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