Q4 2018 Will Be THE Best Time Ever To Sell Toys On Amazon FBA


The perfect storm have been set in motion for Q4 2018 to be the best toy selling season ever!

But….if you want to really profit, you need to take care to handle this right.

What I am going to reveal here is a combination of rumors, information from my “ Walmart toy lady” and taking a guess at the “bigger picture”. None of this can be proven until either it happens or doesn’t happen but that is part of this business and forecasting the future.

Everything here is based on Toy R Us (TRU) going out of business but actually it started more on the rumors of Toys R Us going out of business and the chain of events that it set in motion.

For more than a year, there have been rumors of Toy R Us going out of business. The buyers in retail knew about this. It seems that Toys R Us was not able to pay suppliers. Big name suppliers like Lego, Jakks, Mattle.

This generally mean that the suppliers have issues paying their suppliers, so they don’t want to sell to the non payers, in this case Toys R Us. It is sort of hard to be a toy store without the big named toys on your shelves.

Anyway last year ( 2017 holiday season) Toys R Us basically was saying “If you don’t give us credit and send us toys to sell during Q4, we can’t pay what we owe you from last Q4” . Sort of a Catch 22.

So stores like Walmart knew this was going on. Well not the store itself but the buyers for the store, so they were projecting that the big toy suppliers wouldn’t extend credit to TRU and they thought that this would mean more business for say Walmart. Basically if you couldn’t get your Lego set at TRU, then you would buy it at Walmart, which means Walmart needed to order more toys than usual to meet the demand.

Pretty simple concept, but actually it isn’t that simple.

First, buyers actually order toys like this around Q4 of the year prior to the one coming up. So in Q4 2016 they were placing orders for Q4 2017.

So the buyers had to take a chance that the rumors were right and order way more toys than normal a year before they knew if TRU was going to go out of business ( or be limited on what brands would still work with them) .

The buyers from Walmart took the chance and ordered a lot more than normal.

This ended up being a mistake!

TRU didn’t go under before Q4 2017. They had shelves stock with toys wihich means that there was an oversupply of toys for the 2017 Q4 season.

Simple Economics took over and Walmart wasn’t able to sell all the extra toys they ordered.

Now according to my “Walmart toy lady”, these buyers get 3 strikes and they are out. They placed big orders and Walmart had to clearance out a lot of toys post Christmas.

Depending where are are, you may or may not have seen this. My local Walmart was stocked well on toys post Christmas and had CRAZY clearance prices to make room for the new stuff. ( all of which are currently tanked on AZ)

So imaging you are the Walmart buyer and you can see the numbers ( and you want to keep your job) . They were seeing that they overbought for Q4 2017 and Toys R Us hadn’t went out of business while they were placing orders for Q4 2018.

What do you think they did?

I would guess that they ordered way less for Q4 2018. Of course I can’t prove this but these buyers are smart people and want to keep their jobs.

So now we can roughly guess that other retailers all sort of did the same thing and all probably scaled back on what they ordered for Q4 2018.

Add into the mix that TRU just announced that they are going out of business, we could conclude that there will be shortage of toys Q4 2018.

Lower supply generally leads to higher prices ( simple Economics )

“Won’t resellers just buy all the toys from TRU and they supply will be there?”

Nope, at least not the average Amazon reseller.

Here is what most likely will happen:

TRU will have clearance sales, resellers will snatch up the same toys nationwide and send them into the Amazon warehouses. Then the race to the bottom will begin.

The “race to bottom” has intensified 10 fold recently do to a large number of new sellers and the change in Amazon storage fees. If you haven’t noticed this, lucky you, but I personally see RA has become a “Buy and store in my basement for 6-12 months” sort of business.

Let that last sentence soak in. That is my suggested game plan with the TRU clearance.

I understand that this takes capital and might not work for you ( sucks to be you) , but instead of buying and selling for 10% profit, breaking even or a loss, you should plan on buying and storing these toys ( and not storing them in Amazon warehouse)

What is the reasoning here?

First we know that there will be a lot of unknowledgeable resellers sending these toys in right during the summer and dumping them.

Second, each one of the companies that TRU owes money to have limited capital and they won’t be able to make as many of these toys ( further reducing the toys supply for Q4)

Third, older toys sell for more and a lot of these toys won’t be made anymore because the manufacturers have to focus on their new stuff because they don’t have enough capital to go around. In English these means that Amazon won’t be able to get the “old models” anymore and only 3rd party sellers will be selling it.

3rd party sellers selling discontinued toys equals high profits to those that can wait!

While this has a very good chance of happening, I won’t say every toy is worth buying and I would except the opposite to happen in Q4 2019 if there is a shortage this Q4 2018.

Also for the risk takers, the discounted TRU gift cards should tank before long because people want to get something out of them before they are worthless. If you can get discounted gift cards and add the clearance, you can just add to your final ROI.

***** Make sure you don’t get stuck with unused cards when they stop accepting them!

I would look for brands the maybe only TRU carried. They may not be able to get into the other big retailers and this would make them hard to find and might shot the prices up on Amazon.

Also you might play the AZ to AZ flip on the tanked toys. When all these toys get sent in and the price tanks during the summer, you might be able to buying right off of AZ 3rd party sellers for prices close to what in store clearance is when the sellers start freaking out.

Finally the biggest point is that if you just buy for a quick flip, then this isn’t going to be much of a money maker for you.  The real money will be made in Q4 2018.