US Toy Manufacturer Proves Significant Competitive Advantage over China

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The retail industry has been especially hit by the economy. Retailers are increasingly demanding shorter lead times and the flexibility of smaller order sizes from manufacturers and suppliers. This article examines how one US manufacturer has turned the demands of this new economy into a significant competitive advantage and has grown 300% as a result..

"Our most significant competitive advantage comes from being a domestic manufacturer and supplier.”

Last summer The New York Times reported on sweeping changes many of the nation’s largest retailers are implementing in response to declining sales and recessionary economic trends. Though the National Retail Federation reported a slight increase in retail sales for February, many economists caution that high unemployment rates will continue to dampen demand. Fluctuations in the economy aside, the newly evolved buying habits of retailers have created a significant, measurable competitive advantage for US manufacturers.

To combat sluggish sales and uncertainty in economic conditions, retailers are choosing to reduce inventory levels. While this results in a higher risk of stock out, the demands on the supply chain have increased to hedge some of this risk. Potentially more frequent orders, smaller order sizes and short lead times are now a necessity for manufacturers within this new economy.

One proven supplier in this new economy is SAVVi, a toy manufacturer based in Tucson, Arizona. SAVVi has secured distribution of impulse items and activity kits into all major retail channels with partners including Wal-Mart, Toys ‘R Us, Michael’s and Walgreens. The company has grown 300% in the past 2½ years despite the downturn in the economy over the same period.

Ian Cooper, SAVVi’s VP of Retail Sales, believes the company’s growing distribution can be attributed to a number of variables including license acquisitions, new product innovations and the company’s in-house team of designers. “But while these variables are important,” Cooper explained, “our most significant competitive advantage comes from being a domestic manufacturer and supplier.”

SAVVi can typically go from order to delivery in two weeks, a timeframe Chinese manufacturers typically cannot beat. The company is able to gain distribution into mass retail because it can compete on cost, as well. Cooper commented, “Labor amounts for a small portion of our cost of goods manufactured, so the fact that the average wage in China is about $1.25 an hour is not a competitive threat for us.” The company employs a full-time staff of 82.

The target demographic for SAVVi products are children between the ages of 3 and 16. SAVVi products can be found in all major discount retail, grocery, craft supply and toy stores. The company has built a broad portfolio of over 20 license properties including Marvel, Ed Hardy and Skelanimals. In addition to licensed product, SAVVi has a full line of originally designed merchandise including FashonSkinz, a new product line launching this fall.

About SAVVi

SAVVi designs and manufactures children’s novelty items for distribution into mass retail and is the wholesale temporary tattoos division of TM International (TMI), the largest manufacturer of temporary tattoos in the world. Printing more than 6 million temporary tattoos a day, TMI commands 90% market share in North America and 65% globally. TMI is also a global leader in the design and printing of custom, specialty and novelty products, including custom temporary tattoos. Only non-toxic, hypoallergenic inks are used. Printing processes comply with CSPC and ASTM requirements. TMI has been proudly offering Made in the USA products since 1989. Divisions include Tattoo Manufacturing (http://www.tattoomanufacturing.com), SAVVi (http://www.savvistuff.com), VSi (http://www.vendingsupply.com) and Artblök (http://www.artblok.com).

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Amber Golden
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