How to Establish a Successful Toy Business in India?

By Startup Authority February 16

Introduction

Did you know? As per some genuine sources, India's domestic toy industry comprises 4000 micro, small, and medium enterprises. They are all placed under the unorganized sector when it comes to the toy business. So, the toy business in India is surely a successful market. If you are willing to establish a toy business in India you do have a good scope.

Now, before opening any business in your country or area make sure you know everything about the product or service you are going to offer. In the same way, one must know all the manufacturing, ordering, joining, and delivering processes in this business. In today's Indian market, the young population is rising daily. Getting into the toy business would surely not be a bad idea.

Interestingly, you can even start a toy business online. You can also sell toys on various genuine e-commerce platforms. Now, further, in this article we will talk about, how to establish a successful toy business, selecting the right products, documents required, and many more.

Opportunities in Toy Business

A largely populated country like India offers lots of opportunities to the public. Not only toys, but you also choose any other business that you are willing to do in India, you will get lots of opportunities. But, make sure when you have the opportunity do not forget to grab it at the first chance you get.

Did you know? Some researchers have guessed that by 2024 the toy industry in India will have the potential to grow to $2-3 billion. Yes, it is a shocking figure and only the ones who have a passion to open a toy business can help the country achieve it. Now, the Indian government offers lots of opportunities for such businesses. Some of the schemes launched by the Indian government are the following:-

Scheme for Granting Recognition & Registration to In-House R&D Units
Duty Drawback Scheme
Remission of Duties & Taxes on Exported Products

Other than that, you can import toys from some of the famous and well-known Chinese toy manufacturing companies or use the online platform. Alibaba is one of the most trusted e-commerce platforms from where you can get a list of toy suppliers. Now, these suppliers provide you with the best deals. Now, in India IndiaMART is the best place to get toy products and JustDial is the best place that will give you the contact details of the suppliers. Make sure you contact them and do your negotiations properly.

Average Profit Margin in Toy Store Business

Toy stores across the country do make a good profit margin. One must know the profit margin will depend on the product you are dealing with and the demand. But, the average profit margin of any toy store in India is between 25-30%. Any beginner who has started a toy store business can easily earn Rs 10-15 lakhs per year.

You can earn a good sum of money from toy products. This is because toys do not get spoilt overtime. This also proves you do not need to make any additional investment to your product once bought.

How to start a Toy Business in India?

Starting a toy store business can be a difficult situation for many. You need to choose a good location for your shop so that you create a good impression to consumers. The only motive should be to gather as much consumers to your shop to earn good profit. Opening a toy store business can be very competitive and your store must keep up with that competition.

Now, the following are the steps to start a successful toy store business in India:-

Planning your business

Make sure you have a clear and straightforward plan for your toy store business. It will help you discover all the problems that you could face and find gaps. Here, you must plan your business name, store features you are going to offer, discounts, coupons, and many more.

Form a legal entity

The common forms of business structures are sole proprietorship, LLC, partnership, and corporation. If you establish a legal business entity (LLC or Corporation), then that will protect you from being personally liable if your store is sued.

Tax registration and Business Registration

You need to have lot of registrations before you are into business. Make sure you have all the registrations done before you plan to open a toy store business in India.

Open a business bank account

If you are new to business then make sure you open a business bank account. When you mix your personal and business accounts your personal assets get into risk. Also, opening a business bank account can give you a business credit card.

Business accounting

Make sure you record all the transactions that are made for your business. It is critical and important to understand the financial performance of your business.

Get necessary license and permits

Opening a toy business does not mean only registrations. You need to get all the necessary license and permits for your store. Make sure all the documents and valid and up-to-date.

Make sure to get a business insurance

Most entrepreneurs opening a new business forget this part. You must have business insurance so that your business operates safely and lawfully.

Branding

This is where you do branding of your business. Try to make unique advertisements so that consumers are attracted to your store.

Selecting the Right Products for Toy Store Business

To become a good seller in the market you must be updated on the latest technologies, entertainment, and fashion. That will help you select the right products for your toy business in India.

Always go for the new and trending toys that are currently in the market. Now, you can easily get the latest trends from Amazon, JustDial, Toycra, and many more. You can even contact some other retailers about what toys are in demand recently. Make sure you visit e-commerce websites and see what toys are the most-sold ones.

Other than that, you can look for toy products that are currently trending on the internet. You could even search for the toys if they made some recent news or controversy or not. The best way to select a product is to go for a famous cartoon character. If you have selected a popular character who could be of anything then that will surely be appreciated by the small children.

Additionally, you could stock up on the traditional toys in your store. Now, evergreen toys could be anything, for example, colors, remote control cars, remote control bikes, colour-changing toys, and many more. These are some of the basic yet unique toy products that will be liked by most consumers out there. Interestingly, such evergreen and traditional toy products have a separate place in everyone's hearts.

Documents Required for a Toy Business

All toy industries, companies, brands, and SMEs need to take the necessary registration documents. Without these asked documents you can surely not open a toy business in India. Yes, just like any other business in India toy business does require some registration documents.

Did you know? To keep a quality check on toys, the Indian government has brought under compulsory Bureau of Indian Standards certification as per Toys Safety Control Order 2020. This certification has been issued by DPIIT, Ministry of Commerce and Industry India. Now, to get a registration all must have the asked documents as per the Indian government rules and regulations. The following are the documents required to open a toy business in India:-

All sorts of business registration (BIS Certification, Domestic Product Certification, BIS Certificate of Conformity, BIS Hallmarking, and many more)
Licenses (business license, Certificate of Occupancy, Resale Certificate, Business Permit, and any more)
Insurances
Tax policies
Aadhar card, PAN Card
Photocopies
GST Number and Certificate

Investment Required for a Toy Store Business

Investment is something everyone should think of before starting a business. Now, starting a toy business can be expensive depending on the product you are dealing with. If you deal with smaller and low-quality products you can open a toy shop instantly. But, if you are planning to open a good well-stated toy shop then that would need some investment.

Additionally, investing lakhs of rupees does not mean you can instantly open a toy store. Opening a toy store takes quite some time. The average investment required to open a toy store business in India ranges between Rs 10-20 lakhs.

Is the toy store business profitable business?

The toy store business is surely profitable in India as well as in any part of the world. The average profit margin of a toy business in India is between 25-35%. This profit margin depends on the toys you are dealing with

Is the toy store business competitive?

Now, if we take the whole toy industry then it surely is a competitive business. It has a low barrier to entry but, if you have made your entrance then there is no one stopping you from earning a good profit margin.

What is the future of the toy store business?

Some of the facts and figures are already mentioned above in this article. Still, the domestic demand for toys is expected to increase by 10-15% in the financial year 2023.