The mid-size toy distributor is vanishing. You see fewer of them at the shows now: Nuremberg, Hong Kong, LA. They’re being replaced by direct deals, brand-owned teams, and retailers who want it all straight from the source. The space in the middle is shrinking fast.
It’s not about distributors losing their touch. It’s about a model that no longer fits. Retail has consolidated. Big players don’t want intermediaries. And the number of times I’ve heard, “we don’t work with agents” is increasing. Worryingly. Everyone wants factory pricing, clean terms, and delivery on their schedule. Brands are chasing margin and control, so they skip the distributor and go direct. And who can blame them? If they can cut someone out and keep the full margin, they will.
The numbers don’t work like they used to. Warehousing is expensive. Freight is painful. MOQs are a gamble. And forget territory protection. You can build a brand for years and still wake up to find someone else shipping it to your customer for a few cents less. It’s become survival of the cheapest. Add to that the headache of late payments, returns, and retailers expecting marketing support you can’t afford to give, and you start to question why you’re bothering.
Some retailers have taken it even further. They’re not just cutting out the distributor and the agent. They’re going straight to the factory, launching their own lines, and selling them not just in their own stores, but to other retailers. In effect, they’re becoming brands. Competing with the very suppliers they once relied on. You can’t fault the logic: control the product, control the margin. But when everyone does it, the shelves start to look the same. Same characters. Same formats. Same stories. And when it tanks, there’s no one to blame but yourself.
The lines are blurring. Even retailers and distributors are becoming agents, offering sourcing, factory links, design input, logistics. It’s no longer about who holds the stock. It’s about who holds the relationship.
What gets lost in all this is what the best distributors actually brought to the table. They were more than just a warehouse. They handled customer service, absorbed the chaos, spoke the local language, and got toys into places head office had never heard of. They knew what would sell and where. They paid on time. They kept your brand alive between catalogue refreshes. You don’t notice what they did until no one’s doing it.
Some are still hanging on. The ones who offer something extra. Not just stock, but services. Not just margin, but experience. A few have shifted to agency models, tightened their portfolios, got smart with B2B platforms. It’s not as profitable, but it keeps the lights on. I stepped away from traditional distribution over a decade ago, when it became clear the model was starting to crack. Since then, I’ve focused on something leaner and more resilient. Helping brands and factories build the right relationships, open new territories, and stay flexible when markets shift. It’s not about holding stock. It’s about holding insight, finding the right fit, and being there when the shortcuts stop working.
Where this ends is anyone’s guess. What’s clear is that the middle is disappearing. Big brands will sell direct. Niche ones will use agents. The rest might not find a way to market at all. And when things go wrong, as they always do, there’ll be no one left in the middle to sort the mess.
Distributors aren’t the problem. The system is. But the system isn’t waiting for anyone to catch up.
Adapt or be forgotten.
Thierry, a seasoned international sales and marketing expert, founded Konomocha in 2015. With over 20 years of experience, he helps toy and stationery brands expand into EMEA and APAC markets.
This article originally appeared in Edition 16 of The Toy Universe Magazine
