I. Industry Risk Analysis

(1) Policy Risk

Currently, the baby toy wholesale industry faces core risks during the policy implementation stage: the rapid iteration of safety standards (e.g., the EU updated the EN71 – 1 mechanical and physical performance standard in 2023), the mandatory replacement of environmentally – friendly materials (many countries have legislated to restrict the use of plasticizers), and the stricter compliance requirements for cross – border e – commerce (a return wave occurs when the pass rates of domestic and overseas spot checks are lower than 60%). Entrepreneurs need to deal with the sharp increase in testing costs caused by the expansion of the mandatory 3C certification (the testing fee for a single SKU exceeds 10,000 yuan), prevent the risk of inventory freezing caused by surprise inspections by local regulatory authorities (inferior products are directly seized administratively), and face retroactive penalties for environmental protection policies (products containing BPA produced three years ago may still be held accountable).

(2) Economic Risk

The baby toy wholesale industry currently faces significant risks of economic cycle fluctuations. During an economic downturn, the contraction of household disposable income leads to a decline in the demand for non – essential consumer goods, and the decrease in inventory turnover rate causes cash – flow pressure. During a prosperous period, the rapid rise in raw material prices and logistics costs squeezes profit margins, and the accelerated product iteration forces enterprises to increase R & D investment. The cyclical decline in the birth rate directly weakens the long – term demand foundation of the industry. At the same time, the vertical integration of cross – border e – commerce and retail brands intensifies channel competition. Small and medium – sized wholesalers have weak anti – risk capabilities in price wars and payment – term games. Entrepreneurs need to be vigilant against the resonance of three risks: inventory depreciation, capital – chain rupture, and loss of market share.

(3) Social Risk

The baby toy wholesale industry is currently squeezed by the dual pressures of generational consumption gaps and demand iteration. The new generation of parents (born in the 1990s and 1995s) prefer to directly purchase branded products with high safety and strong educational attributes online, which weakens the price advantage of traditional wholesale channels. This group is far more sensitive to the safety of toy materials and cultural IP attributes than the previous generation, forcing the supply chain to upgrade at a high cost. Wholesalers in lower – tier cities are prone to compliance risks due to information lag. Coupled with the shrinking customer base caused by the continuous decline in the fertility rate, the industry as a whole faces the structural contradiction of weakened channel value and intensified consumption stratification. Small wholesalers have weak anti – risk capabilities under the pressure of environmental standard iteration and channel transformation.

(4) Legal Risk

Entrepreneurs need to focus on the multi – dimensional legal risks in the baby toy wholesale industry. In terms of product safety, if the toy materials and small – part designs do not meet the “National Toy Safety Technical Specification” or European and American CE/EN71 standards, product recalls and liability under the “Product Quality Law” will be faced. In the field of intellectual property, using unlicensed IP images such as Disney in toy design is likely to trigger copyright lawsuits. Exaggerating the “educational function” in advertising may violate the false – advertising clause in Article 28 of the “Advertising Law”. In the supply – chain link, it is necessary to ensure that suppliers provide environmental plasticizer test reports that meet the “Plasticizer Control Regulations”; otherwise, the “Environmental Protection Law” will be violated. In cross – border business, a discrepancy between the customs declaration form and the actual goods will constitute a smuggling risk. When negligence in warehousing management causes toys to get damp and moldy, resulting in harm to children’s health, product liability under Article 41 of the “Tort Liability Law” will be borne.

II. Entrepreneurship Guide

(1) Suggestions on Entrepreneurship Opportunities

The current entrepreneurship opportunities in the baby toy wholesale industry lie in: relying on the three – child policy and the upgrading of family child – rearing consumption, focusing on the development of differentiated products made of environmentally friendly and safe materials with educational and early – childhood development functions. Integrate high – quality supply – chain resources to provide cost – effective one – stop product – selection services for small and medium – sized maternity and baby stores, community group – buying platforms, and county – level distributors (e.g., reduce intermediate costs through the 1688 cross – border exclusive supply or regional pre – warehouse model). At the same time, use live – streaming e – commerce, private – domain communities and other channels to directly reach young parents, and seize the product – upgrading window period after the implementation of the new national toy safety standard in China. Cooperate with certified factories to develop self – owned brand product lines that meet the new standard.

(2) Suggestions on Entrepreneurship Resources

First, integrate high – quality toy supplier resources. While establishing a stable supply chain, explore flexible cooperation with small and medium – sized subcontractors to reduce inventory pressure. It is recommended to cooperate with cross – border e – commerce logistics parks to share warehousing and reduce initial costs. Focus on connecting with local manufacturing support policies to obtain office – space subsidies and incubator resources. Through the dual – channel layout of the 1688 wholesale platform and TikTok baby – related influencers’ distribution, quickly acquire channel resources of maternity and baby stores and community group – buying platforms. Cooperate with third – party quality – inspection agencies to obtain 3C certification support. Establish a WeChat maternity and baby community as a fast channel for user feedback. Connect to an ERP system to monitor inventory turnover rate and sales data in real – time. Focus on maintaining the payment – term credit limits of 3 – 5 regional maternity and baby chain stores.

(3) Suggestions on Entrepreneurship Teams

When forming an entrepreneurship team in the baby toy wholesale industry, it is necessary to recruit members with experience in supply – chain management, maternity and baby industry channel resources, and product safety certification. The founder should preferably be a core member with both industry connections and quality – control capabilities, and be paired with partners who are good at e – commerce operation and warehousing logistics. The initial team should maintain a lean structure of no more than 5 people. Bind key channel resource providers (such as former purchasing supervisors of chain maternity and baby stores) through equity. Establish a weekly learning mechanism for product safety standards (ASTM/EN71). New members must pass a sandbox – simulation test of toy – recall cases before joining the team. The core team should visit at least 3 downstream retailers every month to maintain market sensitivity.

(4) Suggestions on Entrepreneurship Risks

Entrepreneurs need to prioritize controlling product – quality and safety risks, establish a complete quality – inspection system to ensure compliance with domestic and foreign toy certification standards such as CCC and EN71, and sign quality – liability joint – and – several – liability agreements with suppliers. To address the risk of inventory overstock, adopt the “small – batch + pre – sale” model to reduce inventory pressure, and establish flexible warehousing cooperation with logistics enterprises. Establish a dynamic supplier evaluation mechanism and maintain cooperative relationships with more than 3 factories with BSCI certification. Plan in advance to develop cross – border e – commerce channels to hedge against the risk of a saturated domestic market, and use an ERP system to monitor SKU turnover rate in real – time. Set aside 20% of working capital to deal with emergencies such as CPSC recalls, and transfer some risks through product – liability insurance.