Toys and Everything Else: Seven Ideas to Buy and Sell More Effectively in 2017
So here we are. The 2016 holiday season is in the rearview mirror and extensive planning/selling is well underway for 2017. What does this mean for your toy company? Now is the absolute best time to take stock of strategies that can drive efficiency in your supply chain. Increased efficiency directly impacts your costs, and those savings can in turn be reinvested in spending or profitability. And with the toy industry representing around $84 billion dollars globally, according to statista, there’s plenty of profit to be had!
Seasonally driven industries like toys are our focus, but these techniques and tools to increase efficiency are relevant to any industry. Below are seven ideas to help you think through strategies that answer two key questions:
1. “How can I get more value from the products that I sell?”
2. “How can I save on the cost of my goods and other expenses?”
1. Plan what you’re going to do with excess inventory ahead of time.
We all know that seasonal or holiday sales cycles cause huge ebbs and flows in demand. The calendar, the weather, logistics, and disposable income are key factors. Plus there is no scientific way to tell which items will fly off the shelves and those that will disappoint. The only certainty is that if you don’t accurately forecast demand, you could be left with excess inventory at the end of the season.
The best way to mitigate the negative effects of these seasonal changes is by making sure you have a solid plan in place for excess inventory. One of the best strategies is to sell your excess inventory to a corporate trading company like Sherwood Integrated Solutions. Corporate trading companies will buy inventory using a special currency called a “trade credit.” Trade credits are used in turn to purchase advertising as well as marketing and business services.
After your first corporate trading transaction, you won’t have to worry about your excess inventory ever again.
2. Expect media innovation and efficiency from your agency.
Media performance requires talent, transparency, and a track record, as well as the ability to spot and leverage trends. This results in the highest quality media delivered at the lowest possible cost.
And what kind of media will that be? Well, that depends on the industry. While there isn’t that much data on marketing trends within the toy industry, consumers are generally most trusting of advertisements shown on their televisions and physical/digital advertisements OOH (Out-Of-Home). According to a 2013 Ad Age report, TV ads earned the trust of 62% of consumers, which is up from 56% in 2007. While trust in newspaper advertising fell by two percentage points to 61%, it still outranks magazines (60%) and various forms of digital advertising, including social networks (48%). A great agency knows your business and your target market and helps you activate appropriate media accordingly.
This is not an easy task; the Toy Industry Association reports the toy retail landscape has evolved considerably in recent decades with the rise and fall of big box stores and the increase in e-commerce. To help toy retailers grapple with changes in distribution, media agencies should add value to a portfolio including traditional, electronic, digital, social and in-store channels.
3. Dispose of any underperforming sponsorships or promotions.
Every business has underperforming marketing campaigns, including sponsorships and promotions that fail to live up to their potential and produce the necessary ROI. For example, you might allocate a significant portion of your marketing budget to social media and, while your followers and likes have grown, your newfound social media influence has not translated into more sales. Or you’re working with a multi-year national sponsorship that hasn’t benefited your bottom line in months.
The best thing to do in these cases is to audit the campaign and, if you’re in the red, throw those underperforming sponsorships and promotions out the window. Corporate barter firms offer the most effective resource for disposing of sponsorships and promotions without disposing of value.
4. Use your marketing dollars where the consumer’s decision is made.
The next idea for 2017 is to invest more of your marketing dollars where your consumers “hang out.” Those three main areas include online, mobile, and in-store. Toy companies need to look toward their demographics in order to determine which method is best for them. For example, baby boomers are much less likely to be shopping on their phones than Millennials.
Generally speaking, more consumers than ever before are looking towards their phone and their laptops to make decisions about which products to buy. In fact, more than 90% of shoppers use their smartphones while they shop in the stores!
In order to get your marketing dollars to the right place, you need ensure your suppliers are on top of innovations in digital and shopper marketing as the marketing world is changing constantly. For example, in the far (or near) future, we could see VR (Virtual Reality) becoming a new vehicle for shopping experiences. Might sound crazy, but it’s already happening. With marketing services offered by companies like Sherwood Integrated Solutions, you’ll be in good hands.
5. Be bolder with forecasts.
This is an idea that requires a paradigm shift, so take your time here. In previous years you may have taken a look at your forecasts for the year prior and thought they were a little too high or a little too unrealistic. In 2017, be bold and produce aggressive forecasts that position your business for better sales and more profit. Now, you may be a little hesitant about this suggestion, but this is where the paradigm shift comes into play.
You’re probably cautious to produce too much supply for too little demand, and be stuck with excess inventory. But, as we discussed earlier, you can easily mitigate the risks of overproduction by setting up pre-sold channel where you can reliably dispose of your excess products. By using companies like Sherwood Integrated Solutions you can be assured that any excess product you end up with will not hurt your business.
6. Use BOTH a traditional agency and a barter agency to buy media.
One of the best ideas to implement in 2017 is to buy media using both a traditional and barter agency. Working independently, the two entities are complementary and can increase the value of paid media.
Both teams execute against the same plan, perform with the same expectations, and deliver the same media. The difference is that a barter agency acquires its media positions in a different way, using strategic investments of both cash and trade. This acquisition model, deployed throughout the media community can reduce the internal costs of advertising.
There is no downside to analyze and test the potential efficiency of this optimization strategy. Independent barter agencies like Sherwood Integrated Solutions deliver both quality and value.
7. Divest from non-productive capital.
One of the more difficult decisions that is likely to be on your plate is whether or not you should divest yourself of non-productive real estate, equipment, or other capital. In making a decision, you’ll want to determine if the benefits outweigh the costs. For example, how much is that warehouse where you’re housing your extra toys costing you? Outsourcing might be ideal on paper, but you can’t just abandon that lease.
Corporate trading transactions can be designed to liquidate real estate and other assets without financial loss. And you would be completely surprised at how much of a positive financial outcome this kind of transaction can bring you.
All of the ideas we discussed can be accomplished with the help of a corporate trading company, like Sherwood Integrated Solutions. who can partner to make a difference for your company in 2017.