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September 2007 | Vol. VI - No. 9

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Specialty Stores Stock Up on Sharing

Communication Aids Startups and Keeps Stores Healthy

By: Brian Sodoma
9/1/2007

“If you can complement each other’s information, you have nothing to lose.” — Jonathan Margolis, The Michael-Alan Group

With additional reporting by Julie L. Jones

Mary Horne made a drastic career change when she purchased J. Christopher Toys in Jonesboro, Ark., in March 2007. Having no toy business experience, the long-time pharmaceutical sales representative knew she had a lot to learn.

Thankfully, she told TDmonthly Magazine, the store’s previous owners introduced her to an “insiders’ network,” a select group of specialty toy retailers around Arkansas with whom she shares information about products and trends — an idea some storeowners have found to be helpful for their businesses.

MAKING DEALS

Tom Asacker, a market analyst and consultant for the toy industry, explained to TDmonthly that the Internet has created transparency with issues such as pricing and new toy availability, making it more important than ever before to share.

“Most toys are made in millions, and you’re not actually saving the manufacturer money by buying more. So what a lot of retailers do is say, ‘Hey, this rep gave it to this guy for this amount. This is what it cost my friend in San Diego,’” he said.

FINDING THE NEXT BIG THING

Also, sharing is beneficial because specialty stores “don’t have a team with a hundred people looking for the next hot thing,” he said. “This way you have a market research team spread all over the world.”

Horne agreed: “A benefit of being introduced to this network is to be able to find new products. Also, if a product rep comes in, before I buy something, it allows me to check in with someone who’s sold the product,” she said. “It really has been vital for me, being the new kid on the block.”

Debbie Scholl, owner of Fundamentally Toys in Houston and past president of the American Specialty Toy Retailers Association (ASTRA), shares information with her fellow members.

“If an owner is curious about a new product, it is very helpful to know other stores’ experiences with it; input like that translates to the bottom line,” she said.

NOT COMPETING … COMPLEMENTING

Owner Drew Friedman of White Mountain Trading Co. in Lutherville, Md., told TDmonthly “it’s partner or perish as far as independent retailers go,” and wishes storeowners would be more open.

He’s trying to start a merchants’ association to encourage retailers to become more collective than competitive — even to the point

of trading merchandise so that “everybody has a happy customer.”

Jonathan Margolis, a principal with New York-based marketing firm The Michael-Alan Group, said sharing information shouldn’t be confused with giving away trade secrets.

“You’re really not competing,” he said. “If you can complement each other’s information, you have nothing to lose.”

But Powell Phillips, second-generation owner of Phillips Toy Mart in Nashville, Tenn., has a different perspective.

“As far as new products go … there is a bunch of sales reps out here looking for that new toy, and they want to find it before me,” he said.

While sharing might not be a necessity for a long-timer retailer like Phillips, even he acknowledged that it has its place: “If someone’s just getting into the business,” he told TDmonthly, “it can’t hurt.”