How a Chinese-made toy gets to a US retailer
With Christmas on the horizon, we trace children's toys from factories in China to US shelves.
In Guangdong province, China, toy manufacturing takes place in factories like Mihox, which employs over 800 workers and produces around 55 million toys per year for the American market. The process begins with a design created by a customer, which is then refined through multiple iterations. A mold is created once the design is approved, and the production run lasts for approximately three months.
On a $30 toy, about $6 goes to the factory, covering material costs, production expenses, and the factory's profit margin of 3-10%. Samson Ko, president of the Toys Manufacturers Association of Hong Kong, notes that despite recent labor cost increases, Chinese labor remains relatively affordable compared to countries like Vietnam.
The toy is then transported to a port, such as Shenzhen, where it is loaded onto a cargo ship for the journey to the United States, taking around 15 days to the west coast and 25-30 days to the east coast. Upon arrival, a tariff of 12.5% of the manufacturing cost ($6) is applied, equaling 75 cents. This fee is paid by the American company importing the toys.
After accounting for freight costs, delivery firms, and retailer profit shares, the final cost for a $30 toy stands at $7.35, leaving $22.65 or 75.5% for the US-based toy firm, such as Basic Fun.
Written by urgent.news from BBC Business's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
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