The Real Story About Toy Business (A Wrong Marketing Strategy Can Be Fatal To Your Business)

Note: Tulisan ini adalah terjemahan Basa Enggres bebas dari artikel ini

Yesterday afternoon, my toy store got a friend's visit. My friend also has a toy shop in Ciracas market area. Then we discuss tips and tricks in the toy business.

Well, in that discussion, my friend told me about one of the competitors of his toy store.

After hearing my friend's story, then the idea arose in my mind to write it down in an article. Finally, I started writing this article, and I gave the title: "THE REAL STORY ABOUT TOY BUSINESS Part #1 (A Wrong Marketing Strategy Can Be Fatal To Your Business)".

The story goes like this:

There's a toy merchant in East Jakarta's Ciracas market area who is experiencing confusion.

Allegedly, he was experiencing stress due to his behavior.

This person seems to have less understanding of marketing techniques. The bookkeeping in his toy shop is very messy.

Why 'mess'?

Because of the calculation of the results of earnings, how much the principal amount (the content of the product) and how much the operational costs (employee salaries, store rental fees, etc.) that have been issued is not set in details. Everything 'mixed up!'

My friend once secretly retrieves information (from a former employee of that toy merchant). Incidentally, he has now become an employee in my friend's toy shop and work part-time cashier section.

From the confession of the employee obtained information that his old boss was very fond of the price war (note: damaging the market price). He did with the aim that the market share of toy business in Ciracas it can be adequately controlled by it. (it's a lousy intention!).

From the confession of his former employees, finally also could be known the way that toy trader in taking the margin of his product. And it turns out his marketing skills are very lousy!

Sample case:

At this time in Indonesia, there is a trend of toy skates. These sporting toys are very in demand. Very popular for children, even liked by adults.

Well, do you know how much margin is set of that toy trader on this trendy product?

Once again I say: 'really very lousy'!

How not? The initial capital of a pair of roller skates is worth is 200.000, - Rupiah.

Well, other toy traders (in general) sell with a standard price range (average retail price) of 275.000,- Rupiah.

But this person is a bit 'unique'.

He sold his shoe products worth 230.000, - Rupiah only. Sometimes only sold worth 220.000, - Rupiah. So he takes an average profit (margin) only 10%. And that 10% margin is gross profit!

Somehow the toy merchant's calculations in managing his business. The 10% margin won't be enough to make up for all the operational costs of the toy store. Such as the cost to pay the store rent, pay employee salaries, as well as expenses for the daily life of his family.

Hmmh, maybe he has vast land and paddy fields in his village. So if the business collapsed due to running out of capital (to cover all operational costs), the solution is simple: sell the land = money for new capital. Intelligent! (a sarcasm).

Or I am trying to good prejudice either: maybe he sells at meager prices. The goal is to help people who are less able to buy toys in that Ciracas market. As a kind of social action in the field of childhood toys. That is how it is according to my good prejudices. Hopefully true.

But it seems my prejudice is wrong. Because, if intention sells cheap for wanting to help people who can not afford to buy toys, then why he must be stressed because they feel a loss?

Wwkwkwkwkkkkkkkkkkk. 😂

Other toy traders around the Ciracas market have long been feeling uneasy (and upset) with that merchant (who likes to damage the market price). Some traders have tried to admonish it well. But he did not care and did not want to hear it.

The traders have explained it a good way. Traders say: "if you continue to drop the market price, it will certainly trigger other toy traders to join in dropping the price. Eventually, there will be an unhealthy competition".

What is the reaction of the trader who likes to ruin the market price that?

He did not care! And continued to sell his toys for a meager price! (Really a dissident ).

Eventually, all merchants just let it.

My friend who was telling this story, actually also participate restless with attitude and way of that bad toy trader.

But my friend did not lose his mind; if his rival trader was competing in the wrong way (damaging the market price), then my friend wins it in a smart move.

How to way compete that smart?

I.e., by providing the best service and giving the special bonus to every buyer in his toy store.

So when customers buy toys in a certain amount, it will get a special bonus, usually in the form of toys or discounts.

He also provides free service for remote type car (RC large size). So if the customer bought a specific type of remote vehicle, and if at any time damaged, it will get free service.

With all the maximum service that he provides, even though the price tag he set is the standard price (not too cheap), his customers remain loyal to go shopping at his shop.

That's the smart marketing strategy is implemented by my friend.

Very different from that toy merchant. He can only drop the market price. While the skills speak and 'seduce' the buyer is still very minimal (less experienced). So he does not understand how to serve the buyer well.

According to information from his former employee, the merchant was unfriendly when serving the buyer. Even the way of speaking tends to be rude. Maybe he felt arrogant because he thought the price of he toys shop, is the cheapest. So he feels very confident the buyers will shop at his shop.

~Remember one thing: (In fact) although the price of the product in your shop is low, but if you service very disappointing, surely buyers will turn to other stores.~

Well, now he the 'reap the storm' due to his actions (I got this news from my friend who was visiting my store this).

Factor a making that merchant is so stressed because buyers who come to his shop very difficult to accept the increase in the price of goods. (note: lately the cost of toy capital is often up).

Though the price of toys he sells is already very cheap, there are still some among the buyers who bid the price. Even, there are among buyers to bid up to below the capital price.

"Daddy, this dizzy me"! (It's about that merchant's reaction). ☺

"So, that the toy merchant is now experiencing heavy stress" (my friend continues the story).

The news from this my friend is valid enough. Because he also gets this information from the Koh (wholesale boss/toy importer) in the Asemka area of Central Jakarta. (This area is a wholesale center as well as a supplier of toy shop products, and my friend also often shops for toys into the same importer).

Well, from this Koh, my friend can find out all those traders secrets.

Koh said: "Do you know? Your rival toy trader is now always reluctant to pay his debt. For various reasons. Ranging from increasingly deserted buyers and the product profits increasingly difficult to obtain."

"He also complains about the price of toy that keeps on increasing, especially on roller skates products that are currently trending, every time the price is always up".

"He complained that all the goods he sold in his shop had only taken an average margin of 10-15%."

While lately the price of the basic capital of roller skates always increase. The increase in average capital prices reached 10% -15%.

The cause of the price increases because now there is a mandatory regulation of SNI (Indonesian National Standard) on toy products. This rule makes the bureaucratic process and the distribution of toy products far more complicated and lengthy. As a result, imported products that can enter Indonesia become increasingly difficult.

The bottom line is this: old channeling process + rare items = price rises. That's the point!

HHHHHHHHhhhhhhhhhhhhhhh!! I'm stress!!! (The expression of toy traders who is hobby damage the market price that). 😁

When I heard my friend's story in this section, I spontaneously said: "Feel it!" Wkwkwkwkkkk 😆😆

(My friend continues the story).

The toy importer then said to that merchant: 

"That's why sir, if you become a trader, try to deepen skill of marketing." 

"Because, if you continue to do it (price war and damage the market price), when the price of product rise as now, you become very confused. Right or not?"

The merchant immediately fell silent as he heard the speech of the Koh.

That was the end of the story from my friend (who was visiting at noon yesterday to my store it).

At 17.00 afternoon my friend asked permission to go home.

My friend is leaving a terrific story to serve as a lesson for all traders, especially toy merchants.

So,,,, Remember friends: A Wrong Marketing Strategy Can Be Fatal To Your Business! 😉

If you feel this article is useful, then share it. Hopefully, it can be helpful for your other colleagues.