Thread: Can a Billion-Dollar Ecommerce Toy Company Be Created?

You are going to have to outthink Wal-Mart... they want to bring Toys-R-Us down in an article I read last week.

Wal-Mart is a monster that wants to bring everyone down, that is the goal of every business, bring down your competitors.

Wal-Mart outsells Toys R Us in toys already.

Dick's Goods and The Sports Authority are the two largest sporting goods chains in the United States of America. Wal-Mart outsells both of them COMBINED in sporting goods.

Toys R Us struggles I think because the quality of their stores declined. But I have no interest in trying to build a big toy store chain, I was just curious about the potential prospects for an ecommerce toy business being able to reach billion-dollar status.

Thats actually a very good idea. Surely your right in saying that an online toy store concept could become a billion doller enterprise. Guess you could look at the history of other similar companies operating in other markets and see how they did it.

Might be worth looking into a niche that hasnt got a huge player in the market online and try to crack it.

The only thing I can think of with the toy store that might bring it down compared to the other examples you gave is the fact that kids probably make loads of the purchases on impluse (well make their parents). Kids want to go into the store and look and play there and also get the toys. Putting it online would remove this aspect. Not sure on the effect though...

Of course it can, you said yourself Zappos took on a $2.66bn revenue company and carved itself out a $1bn marketshare, a google search shows the first 3 matches don't even have user friendly store etoys is too heavy on flash and not really an overly intuitive site.

It definitely has potential and it is only a matter of time before the major retailers get on board, this doesn't mean it will become a billion dollar company, it doesn't even mean it'll get off the ground but its definitely as an idea for an online store it has potential.

I've always wondered why people buy from zappos when it is so important to me to try on shoes before I buy, I imagine many others have the same view but I don't see any reason why someone wouldn't buy toys online.

Do you run any smaller online stores because if you haven't done so it'll be a steep learning curve as you figure out how to source products, manage inventory, design and secure the site, market it and grow it... this sounds like the kind of business you could be aided by an experienced partner if you were to start it.

You'd probably start as a niche outlet for certain types of toys and if you succeed expand to a broad range of goods, zappos probably didn't sell the wide variety they do now from day 1.

Originally Posted by supraman

The only thing I can think of with the toy store that might bring it down compared to the other examples you gave is the fact that kids probably make loads of the purchases on impluse (well make their parents). Kids want to go into the store and look and play there and also get the toys. Putting it online would remove this aspect. Not sure on the effect though...

This is true but you'd also expect the tendency for people to try on shoes before buying make them unlikely to buy from an online store like zappos yet there still seems to be quite a fwe customers for zappos

You might lose impulse buyers but make up for it by gaining the majority of the Christmas and birthday shoppers who don't buy on impulse and want the very best price possible.

Originally Posted by WheelsRCool

So technically couldn't a determined entrepreneur build a billion-dollar ecommerce toy brand?

Of course you could. Basic finance applies to an ecommerce toy brand just as in any other kind of company. Follow it and compete on innovation and you will attract the media attention, hence building the brand. But take what is already out there and make it much better. Don't compete on price.

It would be good to incorporate a Toy based social network for parents. So they can interact and recommend toys to eachother. Then make it super easy to buy those toys on the site.

Interestingly, the baby market seems to be well served.

Thanks for the comments and suggestions people.

Regarding Zappos, the reason people buy from them is because they have free shipping both ways, stellar 24/7 customer service, and a 365-day return policy.

So in other words, you buy shoes from Zappos and the shipping is free. The shoes arrive and they don't fit. No problem, you just ship them back, again for free, and get another pair sent to you.

Zappos takes a hit on this in profit and especially did in the short-term, but it has been a big part of their growth long-term.

Started looking into this idea - not the toy idea specifically, but the billion dollar online retailer.

HERE Is a list of the top 500 internet retailers (even ones with offline stores)

Could provide a good starting off point - see what isnt represented here and go from there

Originally Posted by WheelsRCool

Thanks for the comments and suggestions people.

Regarding Zappos, the reason people buy from them is because they have free shipping both ways, stellar 24/7 customer service, and a 365-day return policy.

So in other words, you buy shoes from Zappos and the shipping is free. The shoes arrive and they don't fit. No problem, you just ship them back, again for free, and get another pair sent to you.

Zappos takes a hit on this in profit and especially did in the short-term, but it has been a big part of their growth long-term.

So in the case of a toy store you could offer free next day shipping and a friendly returns policy to makeup for not being able to see a toy in store.

Do you have any experience with an online store yet?