Are Toys Good For Dropshipping in 2024?
The opportunities to sell toys online are as vast as the imaginations of the children who play with them. From action figures to educational toys, the toy market in 2024 is full of exciting and trending products for motivated retailers to sell and profit from. As a Dropshipzone Supplier or Retailer selling toys, you’ll be tapping into a market full of potential. In this article, we’ll explore the benefits and challenges of dropshipping toys and how you can make the most of these unique products in 2024.
Should your business consider dropshipping toys?
Whether you’re just starting a dropshipping business or expanding your online store, toys are a profitable niche. With multiple categories to choose from, you can test and sell hundreds of different products with little to no risk. From ride-on RC toys to board games, businesses can target any age range, educational level or hobby. Best of all, this fast-paced industry is frequently testing new product ideas and creating exciting toys that drive innovation and shape pop culture. With a guaranteed market and endless exciting opportunities, dropshipping toy products is an excellent niche for motivated entrepreneurs.
Size of industry and opportunity
During the pandemic, toy and game sales surged as people of all ages struggled to stay entertained. Although these numbers have dropped post-pandemic, sales still grew by 17 per cent across the G12 compared to pre-pandemic reports. The toys and games market worldwide is projected to generate $130 billion (USD) in 2024, with an annual growth rate of 2.49 per cent between 2024-2028.
Research from Circana shows the categories that experienced the highest sales growth over 2023 included building sets (4 per cent), plush (3 per cent), and strategic card games and vehicles. All of these categories have been witnessing sales growth for the fourth year in a row. Licensed toys make up 31.1 per cent of the total toy market, with Pokemon coming out as the top-selling property for kids globally and LEGO emerging as the top-gaining property.
There are several trends expected to drive the toy industry in 2024 that will bring many great products and opportunities for retailers.
Smart toys and digital integration
Gen Alpha (born between 2010-2024) are set to be the most connected generation ever, with approximately 42 per cent of children aged 0-8 owning their own tablet devices and 48 per cent of 6-12-year-olds owning their own smartphones. Technology is an integral part of this generation’s identity, with 63 per cent valuing the latest technology compared to Gen Z (31 per cent). Not only will this generation have a large impact on the retail sector as the oldest children gain purchasing power, but toys and games are catering to this generation of children with increased digital integration.
In 2024, it is anticipated that smart toys that integrate physical devices and components with interactive digital features will be the prevailing force in the market. Although parents remain sceptical about privacy and data collection, STEM toys with digital integration are in high demand due to their ease of use and ability to teach children through play. Since smart toys can be personalised to suit a child’s individual play preferences, these toys can provide kids with unique and memorable experiences that traditional toys lack.
Eco-friendly toys
With an estimated 80 per cent of toys ending their lives in landfill and making up 6 per cent of all landfill plastics globally, it’s not surprising environmentally concerned consumers are choosing sustainable toys. 45 per cent of parents under the age of 40 consider a toy’s environmental impact when purchasing. Wooden toys with non-toxic paints and finishes, toys made of recycled materials and soft toys made from organic cotton are just some of the eco-friendly toys entering the market. With big toy manufacturers such as LEGO piloting several environmentally friendly initiatives, it's only a matter of time before sustainable toy manufacturing becomes the norm. This trend also includes producing toys that are durable, reliable, and have the ability to adapt to children’s needs as they age, ensuring long-lasting high-quality products.
Kidults
Unlike children who have little purchasing power, a new target market of “kidults” has emerged to take over the toy market. Defined as consumers 12 years and older who buy toys or games for themselves, kidults make up an estimated one-fourth of all toy sales annually. Using nostalgia as a marketing tool, brands have been able to re-engage Gen Z and millennial consumers. Companies such as Mattel and Hasbro have used movie and TV tie-ins to reinvigorate their brands, such as Barbie and Dungeons and Dragons: Honor Among Thieves in 2023. We are also seeing less stigma surrounding older kids and adults playing with toys, and even the elderly: 20 per cent of parents reported they would be buying toys for ageing relatives these holidays, with 70 per cent citing mental stimulation as a benefit of play for older adults.
Benefits of dropshipping toys in Australia
Evergreen products
Toys are considered evergreen products due to their consistent demand irrespective of economic conditions. With toys being popular gifts for various occasions and often tied to entertainment franchises, they maintain a steady stream of demand throughout the year. Toys also aid in children’s development and education, catering to the needs of parents seeking products to aid growth throughout childhood. Some toys stay popular and in demand no matter the trends or period - dolls, model vehicles, building blocks, pretend play sets and jigsaws are just some toys that appeal to all children, meaning they have consistent demand.
Wide product range
The toy industry has a wide range of product categories to suit a variety of market segments. You can target a specific age range such as infant toys, teen games or adult collectables. You may specialise in types of toys such as sensory toys, arts and crafts or educational toys. For retailers that specialise in other product categories, toys can be used to complement existing products or as part of bundle deals. Additionally, the toy industry is constantly evolving and introducing new products to captivate consumers, so there will always be new market trends. Retailers looking to break into the toy market can use dropshipping to experiment with selling a variety of toys at minimal risk.
Low overhead costs
Dropshipping requires very little starting capital and no warehousing costs. Suppliers take over shipping and fulfilment, meaning they cover the cost of logistics too. With these pain points accounted for, retailers need only to build their brands and market their products. When you sign up with Dropshipzone, there are no sign-up fees, subscription fees or minimum order quantities - you only pay for what you sell. This makes our B2B2C platform the perfect solution for SMEs looking to dropship toys in 2024.
Scalability
Scaling in ecommerce refers to the process of expanding an an online business to accommodate increased sales, traffic, and operations while maintaining efficiency and profitability. It allows you to meet growing demand and match market trends without necessarily increasing your costs. Because dropshipping is an affordable fulfilment solution with a large range of products to choose from, it makes it easy for businesses to scale as they grow. You can add and remove products from your catalogue as required without having to worry about overstocking, and with your chosen dropshipping supplier, your logistics are covered no matter how much you expand.
Challenges of dropshipping toys
Safety regulations
Australian regulations ensure that toys meet strict safety requirements to protect children from potential hazards and prevent the sale of dangerous toys. Most recently, on September 5th 2023, The Australian Competition and Consumer Commission (ACCC) updated the mandatory standards for toys designed for children up to and including 36 months of age (see the full legislation here). This can present challenges for dropshippers, as they don’t own their inventory. Dropshippers may be held liable for any safety issues or defects with the products they sell, even if they didn't manufacture them. That’s why it’s important to verify products have been tested and approved for sale in Australia, ensure products are correctly labelled, and have appropriate insurance and legal protections in place. Dropshipzone Suppliers adhere to strict guidelines surrounding product safety, so you can rest assured that your products are safe for children and adults alike.
Trademarks and copyrights
Licensed toys account for roughly 31 per cent of the toy market, making these products a sought-after addition to many stores. However, there are many reasons these products can be hard to sell. For starters, retailers need permission from the brand to legally sell their products, either in the form of a licensing agreement or a resale license. For your dropshipping store, you’ll need to find an authorised distributor, create an exclusive partnership, or use a platform that offers licensed products for dropshipping. Once these products are in your store, you’ll have to compete with not only the brand itself but other dropshipping stores and mountains of counterfeit sellers looking to undercut your profits. You’ll need to work harder to build your brand and prove your legitimacy. You’ll need to ensure that you’re up to date with Australian trademark and copyright laws, and always make sure you’re working with reliable and trustworthy suppliers.
Shipping times
By outsourcing logistics, dropshippers lose a degree of control over the shipping process. In a post-Amazon world where fast shipping is standard and free shipping is expected, it can be very difficult to manage expectations around shipping costs and times. Additionally, unexpected delays such as extreme weather conditions or geopolitical conflicts can disrupt supply chains, especially for suppliers who ship internationally. This can lead to many impatient customers, particularly around the holiday season or time-sensitive celebrations. Retailers need to manage customer expectations by being transparent with shipping times, developing a robust returns and refund policy that covers shipping delays, and providing prompt and clear customer service. For best results, choose local suppliers that hold warehouses in the countries you plan to ship to.
Highly competitive
The online toy market is intensely competitive. New retailers must compete with big-box toy brands, other online toy sellers and even other forms of children’s entertainment such as video games and other digital media. To stay competitive and stand out from the crowd, businesses need to develop their unique selling point. This may involve selling to a specific niche market, selling new or unique winning products, and conducting thorough market research to understand the needs of your target audience.
Consumer spending attitudes
Consumers in 2024 are more money-conscious than in previous years, with 90 per cent adopting deal-seeking behaviours such as couponing, engaging in rewards programs, and waiting until Black Friday or Cyber Monday sales. Nearly half of consumers also bought more from lower-priced brands than high-range toy brands in the previous 12 months. This means retailers will have to work harder to convince parents that their toys are worth spending money on. However, businesses that focus on developing beneficial loyalty programs have the chance to capture this market segment and turn them into repeat customers, increasing your average customer lifetime value.
Other considerations
Appeal to both parents and children
A challenge children’s toy marketers face is having to appeal to both parents and children at the same time. This makes developing a compelling marketing campaign a difficult task. Where parents are more often concerned with the quality and safety of toys as well as their educational value, children will gravitate towards toys that are fun, empowering, and that their peers are playing with. In both cases, using influencers and affiliate marketing may be effective strategies.
Encourage impulse purchasing
39 per cent of toy sales are spontaneous and often occur when buying another product. There are many ways online retailers can encourage impulse purchasing. For retailers that use Shopify, there are also plenty of apps available that offer bespoke bundles to customers, automate upselling, and help you set up promotional pop-ups to boost sales. For other online retailers, there are plenty of tools dropshippers can use to improve and automate these processes. Streamlining your own store checkout process also encourages impulse spending. The fewer steps a customer takes to checkout, the higher the chance they’ll make a purchase. Allowing for guest checkout, simplifying your checkout page, providing multiple payment options and offering free shipping are all strategies you can employ to capture last-minute sales and reduce cart abandonment.
Video games and eSports
In terms of play time, games and esports are beginning to overtake physical toys. Not only that, but more franchises are blurring the lines between physical and digital spaces. Games such as Fortnite regularly cross over with popular franchises to produce digital ‘skins’ that players can purchase for cosmetic purposes, while simultaneously launching toy lines in the real world. Furthermore, many popular kid influencers such as Kyle Jackson and Ethan Gamer are increasingly involved in video games and esports, accelerating the popularity of digital toys and experiences. Dropshippers can consider selling gaming accessories such as headphones, controllers or computer components to cater to this audience.
Summary
Are you a new Dropshipzone Retailer looking for your next best-selling product line? We have the solution for you. Toys are an excellent niche with a low barrier for entry, ideal for a beginner dropshipper or those looking to expand their product offerings. We have you covered across a wide range of children’s products from toys to furniture, all sourced from quality Australian dropshipping Suppliers. We make it easy for you to find the best dropshipping toys and add them to your store with one click. For Shopify users, our Shopify dropshipping app allows you to sync your inventory and upload products directly to your store. Our reliable Suppliers offer competitive pricing and shipping fees, so you won’t have to spend hours sourcing the best products on the market - it's all right here on one convenient platform. Explore our range today and start dropshipping toys with confidence.
