electronic toys making business

How to Start Electronic Toys Manufacturing Business

Do you want to start a profitable toy business? This article includes a sample of electronic toys making business plan sample checklists with cost, profit, machinery, and manufacturing process.

Nowadays, electronic toys are the most popular toy item globally. In addition to that, it comes in a wide price range and features. Also, electronic toys are popular as smart toys. If you are an electronic enthusiast or have an educational background in electrical and electronics engineering, you can consider starting this business.

Basically, you can produce different types of electronic toys through assembling. And sourcing those parts is now really very easy. However, initiating this type of business requires an upfront startup investment.

Is Electronic Toys Business Profitable?

According to the last 10 years of statistics, the demand for electronic toys is increasing. Basically, the reasons for the growth are rising personal income and continuous product innovation. However, the interests of children, who are the primary consumers of toys, are changing faster than ever. Hence, toy manufacturers have to create innovative toys to capture their interests.

Generally, the metro cities and ‘A’ category towns account for most of the branded purchases and sell even at higher price points. Largely the rest of the market highly prices sensitive and items above $10 result in the planned purchase and not in impulse buying.

Broadly, the industry includes different educational toys, games, and video game consoles. Also, it includes app-enabled mechanical toys, voice or image recognition toys, screenless toys, toys-to-life, puzzles and building games, health-tracking toys or wearables, and others.

Some of the most potential electronic toy markets are the USA, Canada, Germany, France, the U.K., Italy, Spain, India, China, and Thailand. And some of the most emerging markets are Malaysia, Singapore, Australia), GCC countries, South Africa, Israel, Japan, and Nigeria.

6 Steps to Start Electronics Toys Making Business

Step 1. Identify the Demand

As a startup, you can’t produce every type of toy in the initial days. And it is also not a very lucrative way of initiating this business. So, you must identify the demand for the specific type of toys in your area where you want to sell the products initially. And you must start with a single or two broad categories. It is essential to do market research and understand more about the scope and opportunities of the electronics toys business.

Step 2. Prepare Business Plan with Cost & Profit

Preparing a business plan is a must. According to the market research and your investment capacity, you will need to craft the business plan. In the plan, you must include the primary product range that you want to produce, the business model, marketing planning, and financial analysis.

Generally, financial analysis is an essential part of a business plan. You will need to calculate the startup cost including plant, machinery, human resources, and other preliminary expenses. Also, you must include the working capital cost including utilities, raw materials, etc. Finally, calculate an expected ROI and break even.

Step 3. Apply for License and Permissions

Depending on your location, you will need to check the necessity of different licenses and permissions. It highly depends on the specific location where you want to operate the business. Also, check if you will need to get the NOC from the pollution control department.

Register your business and consult with a small business consultant for the tax structure. You must select a brand name for the toys you produce. Before finalizing the name check the domain availability for setting up your business website. Also, you can consider intellectual property registration.

Step 4. Set up the Unit

In establishing the manufacturing unit, you will need to secure a space first. It is better to have that space in the industrial area. Also, check the availability of transport from that location. If you don’t have your own space, it is better to start from a rented location.

In the factory, you must have electricity and water supply for regular use. Generally, the requirement of the area depends on the business size and number of the product category. However, you can start a small electronic toy-making business in a 1000 Sq Ft covered area initially.

Step 5. Procure Electronic Toys Making Machinery & Equipment

Finally, you will need to arrange and install the toys making machinery. It is always better to buy machinery from reputed suppliers or manufacturers. Before placing the final order, you can ask for a proforma invoice and warranty period. Some of the most essential machines and equipment are

  • Digital Multimeter, 4½Digit
  • Temp Controlled Soldering Unit
  • LCR Meter
  • Drilling machine
  • Analog Multimeter
  • Tool Kit
  • Electronic screwdriver & screw feeder
  • Combined Soldering Desoldering Station
  • High-speed mini drill set
  • Digital Storage Oscilloscope
  • Tools, Dies, Equipment, etc.

Step 6. Electronic Toys Making Process

Generally, the process includes different delicate assembling activities. And also, it varies depending on the specific type of toys you want to produce. Here, you can find some basic steps for producing radio-controlled electronic toys.

The remote-controlled toys have four main parts:

a. Transmitter

The transmitter sends radio waves to the receiver.

b. Receiver

An antenna and circuit board inside the toy receives signals from the transmitter and activates motors inside the toy as commanded by the transmitter.

c. Motor(s)

The transmitter sends a control signal to the receiver using radio waves, which then drives a motor, causing a specific action to occur. The motor in a car may cause the wheels to turn wheels, steer the vehicle, operate propellers, etc

d. Power source

Generally, the power source is typically a rechargeable battery pack, but sometimes it’s just normal batteries. The manufacturing process involves the assembly of electronic circuits, electromechanical hardware parts, mechanical assembly, and other sub-assembly parts as per the design.

Subsequently, the electronics assembly-the ICs, transistors, diodes, resistors, capacitors, coils, and electromagnetic relays, are assembled on PCBs as per design. Then, test the assembled PCBs for the desired performance.

Finally, assemble the electronics assembly along with electromechanical assembly, hardware such as connectors/switches, mechanical assembly, and light-emitting diodes. And pack in a fiber/plastic toy car packet for delivery. Also, you must consider packing the electronic toys in bigger cartoons for bulk packaging.