Chirpy Chirpy Cheap Cheap – one retailer addresses margins

Published on: 6th March 2019

The March issue of Toy World featured an anonymous column from the owner of “High Horse Toys”.

In a parody of the words of the immortal song by 70s band Middle of the Road: “Where’s the Margin Gone? (Where’s the Margin Gone?) Far Far Away…”

Having finally finished the rounds of previews, trade shows and exhibitions, and with the ranges and planning for the first half put to bed, we’ve noticed that the margin this year seems to be going south for independent toyshops. Are we really expected to work for 26p in the pound – excluding VAT?

On the back of what was a “challenging” year for all high street traders, the drop in margin and the increases in price from some – though not all – suppliers is hard to take. We know that high profile toys come with a lower margin, but what about the peripheral product, product that is not in the spotlight or new product that is high risk? We seem to have lost the wiggle room we need to survive. What was once 38% is now 33%, and we are expected to tug our forelocks and say thank you? As companies push for the next big thing, it seems to us that it is the independent retailers who are taking a disproportionate level of risk.

We are a band of specialised, dedicated retailers, and our businesses support local families. We have collectively millions of customers shopping in our stores on a weekly basis, we believe in “Shop Local” and we stock high profile ranges in depth, but to make it work our margin mix needs to be a minimum of 40%, to balance the risk and to enable us to continue trading. It is a two-way relationship and we need suppliers’ support.

The alternatives are to turn our backs on those products where margins are small, tighten our range plans and look for alternative product and markets that give us the margin we need to survive.

To quote Bob Dylan…”The times they are a changing”.

This piece was published in the March issue of Toy World – to read the full issue, click here.


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