Soft Toy Making Business – How To Start

Introduction on How to Start Soft Toy Making Business in India

The Soft toy industry with its specific and chief targets as children and teenagers and makes products, customizes them based on, shapes, colors, sizes, length, etc., and are meant for mere comfort and ornamental purposes has crept its way up as one of the main contributors in constructing the Indian economy.

A soft toy is a toy that is made for kids, typically a toy animal, made of fabric full with a soft filling.

The Indian toy industry was valued at 1.75 billion in 2017 out of which the organized and the unorganized soft/stuffed toy sector shows roughly around ₹5000 crores.

Well, a soft toy industry must have some specific needs and specifications before starting? Let’s see how you can have toys to get good profits for you.

A step-by-step guide to starting a Soft Toy making business

Market potential of Soft Toy making business

The market for soft toys has a particular niche of children and teenagers to cater to. These niches drive this soft toy industry with stable demand as in as birthday gifts, a decorative item, baby showers, etc., It offers augmented seasonal demands during festivals such as Diwali, New Year, Christmas, Valentine’s day, etc.

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Market potential of Soft Toy making business (Pic Source: Pixabay)

So the potential of a soft toy industry is judiciously high but one has to comprehend the line of soft toys they plan to enter into to save up on the cost of manufacture.

It can be segmented based on:

  • Product type: Cartoon character, dolls, animals, playsets, etc.
  • Material type: Pallets, bamboo, fabric, etc.

Now let’s see why you can find the need for a soft toy in the market

  • It’s used by kids to seek comforts and play
  • It’s used as an ornamental item in rooms
  • It is used as gifts to be given on occasions of anniversaries, Valentine’s Day, etc.

License, permissions, and registrations required to start Soft Toy making business

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License required for Soft Toy Business (Pic Source: Pixabay)

The licenses that are essential to run a soft toy making business would be OPC Registration, Trade license, MSME Udyog Aadhar registration, GST Registration, PAN, and Aadhar card. If you are willing to start a Soft Toy making business then these are the different registration and licenses required to complete before starting this business.

  • Registration of firm: You have to register your firm either as a proprietorship or partnership firm.
  • GST registration: Additionally, you need to get registered for the GST number. 
  • Trade license: You also need to register for the Trade License from your local authorities.
  • Pollution certificate: As Soft Toy making Business deals with selling plastic and others that may create pollution to the environment so for safety purposes, it is better to take pollution control certificates from the pollution control board.
  • MSME/SSI registration: MSME Udyog Aadhaar Online Registration should be acquired and is compulsory for every business to start this will allow you to avail of all the government schemes related to your business.
  • Trademark: You need to protect your brand then you must apply for trademark registration from the municipal authority in your area where you have decided to start the business.
  • IS 4955-1968: Along with all these the BIS registration and IS 4955-1968 registration have to be done for the household use of Soft Toy products and it is also required to initiate a distribution network for your business then you have to get ‘distribution agreement paper’.
  • SSI unit registration: You also have to apply for SSI unit registration which helps you to avail of the government subsidy and other benefits. For this, you need to open a current account in the bank in the name of your business.
  • Shop license: You need to acquire a shop license before starting the stationery business in India.

How to target customers in this business

The soft toys fascinated the very specific of niches which are mentioned down here.

  • Children and infants: Children make use of soft toys for playing, seeking comfort, passing their time, and for fun. So, their parents are the target market who check their quality and safety in these products.
  • Teenagers: The teenagers make use of soft toys as a way to beautify their room and few because of melancholy.
  • Playschools: Playschools are a target market since they have kids coming in for admission and soft toys are a way to bring ease and approachability to the environment.
  • Gifting services: Gifting services like Oyehappy make customizable gifts for people to gift to their relatives or friends.
  • Gifts and novelty stores: Who stock for a special occasion like birthday, anniversary, and congratulation cards along with soft toys for occasions and even for special days like Valentine’s Day serve as a great target market too.

Area required to start Soft Toy making business

The area required to set up a soft toy making business is 500 sq. ft. The success of a business mainly depends on its location. For this, several aspects must be taken into consideration. In particular, the reachability of the premises, the visibility of the store, the operating surface, the market competition, the price of the rent as well as the conditions of the lease.

This choice will be based on the products offered for sale. When it comes to a soft toy store, a shopping street or mall are proper locations. On the other hand, it is recommended to settle in a shopping street or a residential locality in a metro city.

Raw materials required to start Soft Toy making business

The raw materials that are essential to set up a soft toy making business are Scissors, Tapes, Cotton, Needles, Racks, etc.

Machinery required to start Soft Toy making business

The soft toy-making business needs the following machinery to set it up:

  • Sewing machine
  • Packing machine
  • Molding machine
  • Dyers
  • Coolers 

Staff required

The employees required to set up a soft toy making business is as follows:

  • 3- Unskilled labors
  • 2-skilled labors
  • 1-production manager
  • 1-accountant

Moreover, sufficient training to these workers in terms of apparatus handling, machine usage, safety, and precaution processes must be provided carefully.

Business model and growth

The business model of a soft toy can be well-defined using 4 options which are mentioned below.

A.  Value proposition: The unique selling point (USP) and the value a soft toy making business is predicted to get you:

Fewer manufacturing costs, word of mouth advertising, low marketing struggles, and steady demand.

B.  Target consumers: The target clients for this soft toy making business are mentioned below.

  • Children and kids
  • Teenagers
  • Gifting services
  • Playschools
  • Gist and novelty stores

C.  Competitor review: Few key companies in this soft toy making business would be:

  • Build-A-bear workshop
  • The Simba Dikie group
  • Lego system A/S

D.  Marketing strategy: The marketing strategy for a soft toy making business would be:

  • Highlighting the standard of raw material used and stability and ensuring word of mouth advertising

How to grow your business

The soft toy-making business has the prospective and witnessed the following growth prospects:

  • The stuffed toy industry is predicted to grow at a rate of 25% from 2020-2023.
  • The soft toy industry is assumed to contribute ₹300 crores further by the end of this year.

Moreover, a rise in the demand for action figures as the upcoming movie characteristics have augmented the demand for these soft toys in need to own a collection.

Investment required to start Soft Toy making business

The capital that is needed to set up a soft toy making business is around ₹200000-₹300000.

Profit margin in Soft Toy making business

The profits earned from setting up a soft toy making business would be ₹40000-₹50000 per month. A soft toy making business may yield a profit margin of around 15-20%.

Suggestions to make your business successful

Are you still in a fix? Don’t worry here you will find a few more lines for your confidence:

  • Firstly, the low capital and consistent demand and better seasonal demand this is a lucrative business to get into
  • Next, the investment in terms of staff and machinery is less and comes with a sensible profit margin.
  • Finally, the diversity in the soft toy in terms of material and type broadens the target market.

Marketing strategy for promoting your business

A crucial step while setting up a business is the marketing plan that will help to gain and retain customers. The actions to be implemented will be determined by the location and concept of the store. For a soft toy business, street marketing for instance the distribution of pamphlets quite a traditional but effective way. The target customers being the general public, the store will have more visibility by carrying out close marketing.

On the other hand, as we live in an era of technologies, keeping a showcase site, or offering online sales is highly suggested. Finally, active participation and being updated with social networks is highly recommended to communicate directly with customers.

Creativity and determination for your Soft Toy business

To overcome the competition, you have to know how to be ingenious. For this, the entrepreneur must first prepare his style. Then, he must plan to offer quality toys with attractive designs to his clients. As the trend grows, it will have to renew its varieties without losing its craze. This will allow the entrepreneur to gain popularity.

Also, it should be known that the business does not constitute in a few days. To retain buyers, you have to be calm and determined. You have to search for the right suppliers, adopt a good communication plan, advise your clients, and above all offer standard products.

In case if you are interested in this: Student Money Making Ideas.


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