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Capital Operation Let Your Plush Toy Business Rocket Growth

2022/07/28

The plush toy industry is a niche vertical industry, plush fabric is a man-made polyester fiber, which can be made into teddy bears, unicorns, plush pillows, pet toys, and even slippers. From the perspective of requirements, everyone will use plush products, so we see that there are many companies engaged in the wholesale and retail of plush toys. This industry will not be replaced. The only thing we worry about is that due to the rise in global labor costs, similar toy production The increase in the cost of handmade manufacturing, which is passed on to the plush toy company, will lead to a decline in the company's profits.

You can choose sub-sectors to make high-end toy products. Such a company has good profits but insufficient cash flow. If you want to have a daily turnover of $20,000, it must be a low-cost sales plan combined with business model changes, use capital to quickly expand your business.

This article shares two cases, let you know how to use capital to make your plush toy business rocket growth.


Business of Selling Plush Skins

build a bear skinstuffing machine

There are many such companies, Build a Bear, the bear factory, and my prefect bear. Build a bear is a retail company that opens stores in supermarkets and malls to let children experience the fun of stuffed toys, and the other two companies are wholesale companies that provide products and services to individual entrepreneurs in the community.

Although their business models are different, they all rely on capital to operate.

 

Their main financing methods are as follows:


a. stuffing machine and plush toy skins are one package

These companies can rent your stuffing machines, you only need to buy plush toy skins, but you need Machine deposit, for example, $5,000 to buy 500 toy skins, of which $3,000 is the deposit for the machine. When you don’t engage in this business, you will get back $3,000 as long as you return the machine, but for For these package sales companies, they can produce more wholesale plush toys with countless orders of $3,000! It's a great financing tool, and for them, the machine cost only $1,000 to produce.


b. Mortgage on all machines leased to customers

When consumers buy a package of machines and skins, you just have the right to use the machine, the machine is not your personal asset.

so package sales companies can mortgage all the machines leased to consumers, which is a great financial operation model, they received 2 machine financings, one is your deposit and the other is a mortgage loan!



Business of Plush Toy Wholesaler

Large-scale toy importers usually use letters of credit to solve capital problems. If you want these products to be sold quickly, you must need low prices to make your inventory turn faster.

When plush toy wholesalers focus on purchasing a container, the cost of the goods It will become very low, but the value of a container of plush toys is about 50,000 US dollars. If it takes 250,000 US dollars to purchase 5 containers per month, the money can be paid to your supplier through a bank letter of credit.

There are two types of letters of credit, long-term letters of credit and short-term letters of credit. Different time means different interest rates. For example, I need the bank to provide me with a half-year L/C of US$500,000. After half a year, you will pay the bank US$510,000, of which US$10,000 is interest. After you hand over the L/C to your Chinese factory, they can take it goes to the bank to cash, and you can purchase goods worth $500,000 within six months without spending a penny!

If your products are very popular and they are sold out within half a year, then congratulations, you have become a top financial expert!


Conclusion:

The above two cases analyze the capital operation mode of the plush toy business from different angles, one uses business model design, and the other uses bank loans.

Using financial means to design the company's business model, you can quickly obtain project funds. If you have a good sales channel and sales resources, your business will double every year!

If you want to get into the business of selling plush toys and you don't have much experience, you can read "The Ultimate Guide to Starting Your Toy Business"

If you do not find a suitable product, please contact Chaoman Toy Company


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