Shanghai Tegarmon Children Products Co., Ltd

To Establish an Online Distribution System—A Success Story of a Toy Distributor

Tegarmon is mainly engaged in the export of children’s toys. Affected by the financial crisis in 2008, the sales of products declined and thus the company looked to the domestic market for more sales. As the general agent of American Alex toys in China, Tegarmon was devoted to the traditional channel the first year, but didn’t achieve satisfactory results. In 2009, Tegarmon wanted to broaden its sales channels by entering the online market, and started looking for a professional digital marketing company to grow their business. After a short while, they found me and asked me to serve as their digital marketing consultant.

Industry Analysis: First off, Alex toys are mainly handmade and painting toys for children. There is a dedicated design department in America, which not only develops toys but also produce videos for post-promotion, exquisite images, instruction manuals and other material, all rich in content and nearly perfect. These are all invaluable for digital marketing. I had the idea that all these invaluable resources would help to make our digital marketing promotion work much easier. In addition, the children’s toy industry is closely related to cultural knowledge. Posting articles about early childhood education (ECE) on the Internet will attract many customers. Thirdly, there is a variety of channels in the toy industry suitable for digital marketing: agency, group buying, wholesale, and retail. Finally, Alex toys can also serve as ECE teaching aids, children’s gifts, children’s stationery, and DIY gifts. So different websites should be built for their promotion in different industries, a brilliant idea to start doing digital marketing for Tegarmon.

Formulated Scheme:
1. Build multiple websites to perform different functions and start the digital marketing in specific fields;

2. Ask teachers with rich experience in early childhood education to write and post articles on the company’s website, large blogs, and forums, popularizing advanced parenting philosophies abroad and promoting the role of Alex educational toys for children’s intellectual development;

3. Assign a dedicated network information clerk in charge of collecting and publishing information on toys;

4. Open the company’s online retail store to prepare for the online distribution of their toys; 5. Establish an online distribution and wholesale system. To look at Tegarmon’s case, starting online distribution is the best plan possible for that it was mainly focusing on the overseas market. By caryring out online distribution with the help of digital marketing, it will have its brand known to more buyers and have its business grown from the online distribution plan.

Personnel Arrangements:
1. One part-time digital marketing consultant, responsible for training, guidance and promotion;

2. One part-time copywriter, responsible for writing product descriptions, taglines and ECE programs;

3. One full-time network information clerk, responsible for collecting and publishing online information;

4. Two customer service staff, responsible for providing online consultation and retail sales 16 hours a day;

5. One graphic designer, responsible for organizing foreign pictures and videos, designing product images, advertising images, etc.

Concrete Implementation:  
1. Training
To facilitate the future work, I provided a training for the entire company (ranging from the general manager to salesmen) to render them aware of the current situation of digital marketing as well as its help to the business, and let other departments know that setting up a digital marketing team can promote the offline sales, strengthen brand awareness on the Internet, and, most importantly, bring a steady stream of distributors and agents. Therefore, it was necessary that all departments could support our work to the maximum extent, and they all voiced their faith in the feasiblility of the digital marketing plan that is about to kick off. After that, I spent a few days on a comprehensive training for the digital marketing department, making sure that every team member had grasped the skills of posting information, writing blogs, and answering questions online. This is how we moved onto the next preparatory stage of the digital marketing.

2. Build five websites with different functions

(1) www.alextoy.com.cn is the company’s official website in sync with the U.S. website. As a window-dressing, the website lists out all products sold by the company to make it easy for customers to find products they want. In order for that, we asked programmers to design the website with the same template and functions as the official U.S. website.

(2) www.qizhiwanju.cn teaches parents about child-rearing from the perspective of ECE and intellectual development, and explains the ECE function of each toy for ECE institutions across the country.

(3) www.wanjudian.org is a website for agents and distributors. All promotional and product information of Alex brand is included in it to facilitate the use of existing images and texts in all regions and online stores.

(4) www.diy-toy.cn focuses on recommendations for Alex handmade toys for girls and DIY toys.

(5) www.alexgift.com mainly sells children’s gifts for the gift industry.

3. Promote products through various online channels

(1) Baidu Bidding: as we focus on wholesale and expanding the number of distributors and agents, we didn’t launch ads with popular keywords in the industry (e.g., “toy”, “children’s toy”, “imported toy”, “educational toy”, and “girls’ toy) like others. Instead, we ran several ads regarding wholesale and distribution (e.g., “toy sources”, “toy agency”, and “toy wholesale”), so the monthly cost in advertising was not high, only about 1,000 yuan. But the customers that had made transactions were all that we wanted.

(2) Natural ranking: as mentioned, we built 5 different independent websites dedicated to different industries. With the exception of that, all of them promoted the keywords of so-and-so’s sources, so-and-so’s wholesale, and so-and-so’s general distribution, aiming to enable customers looking for children’s toy to find us.

(3) Free published information: in addition to mass postings on major B2B information platforms, we also published information on investment promotion websites. Apart from assigning a full-time information clerk in charge of mass postings, we guided certain online distributors to conduct mass postings as well, which could bring them retail business and get the publicity of Alex brand exponentially.

(4) Since there are ready-made DIY videos about Alex toys, we tried video marketing, that is, following the idea of mass postings, we put videos about Alex toys in all places where videos could be placed. Thus interestingly, when you search for “handmade toys for girls” on Baidu, nine out of ten search results on the first page are about Alex products, two of which are videos and three are published by our distributors rather than us. That’s the reason why the Alex brand is not well known offline, but is everywhere online: With the exception of us, many of our distributors are publishing a large amount of information on free platforms. So there are dozens of people in total working at the same time, which is hard for any other company to realize.


Note that the websites in the figure above are rich in sources, involving retail websites, video websites, B2B platforms, B2C malls, and even Baidu Know, which indicates how sophisticated our techniques in mass postings are and how huge the workload is.

4. Build as many online distribution platforms as they can, and expand the number of online and offline distributors

By promoting the five independent websites and conducting mass postings, we have attracted many distributors. Dozens of businessmen interested in reselling Alex products came to us every day for consultation through various communication tools. To make exchanges more convenient, we set up a store and a distribution platform on Taobao. Unlike other online retail stores, we inserted into the product titles the names and item numbers of our products, and sold them at a fixed price, namely recommended retail price (normally the online stores will set a price lower than recommended retail price). The distribution platform on Taobao is built for online distributors, which is available for dropshipping and can automatically manage payment and collection matters. Under normal circumstances, when a big customer has picked out the goods on the Internet, the buyer and seller will complete the order in a traditional manner—signing the contract, placing the order, paying for the goods, shipping and receipt of the goods. As to small orders, people are inclined to complete them on Taobao where the payment will be guaranteed by Alipay and the delivery process can be monitored online in real time. It is worth special attention that this kind of distribution system offers convenient access to small online store owners, since they only need to focus on online promotion without purchasing goods in advance. When customers place an order in the store, the owner will purchase the same product from the general distribution store which will arrange the delivery.

5. Establish customer service system with good pre-sales and after-sales services

Tmall specifies that two online customer service staff must be on duty from 9:00 to 22:00 every day. The two staff we assigned are also responsible for the customer services of Alex’s distributors. Because we tied the bonuses of customer service to the performance of distributors from the very beginning, all of them are motivated to provide services for online distribution activities. The customers normally communicate with us through online customer service, chat tools (e.g., AliTM and QQ), or phone calls (note: Unlike industrial products, people rarely communicate about consumer goods via email). Both customer service staff have been given basic training beforehand and so they were able to answer basic questions from new distributors. In addition, we have also prepared electronic versions of distributor recruitment letter, quotations, brand introduction, product manuals and other material to ensure that they are delivered to customers in a timely manner and thus reduce the pressure of the customer service. Because online store distributors never stock up on goods, they know nothing about the products. They forward all the questions raised by their customers to our customer service, and then copy our answers to the customers. Imagine how huge the daily workload of customer service is (we only recruited people who could use Wubi Chinese Input Method to improve efficiency), not to mention the workload in the peak season of toy sales, when dozens of distributors ask questions online at the same time. At that time, one customer service specialist is far from enough, and staff is temporarily drawn from other departments for assistance. It is worth mentioning that the online channel is much faster in sending notices to distributors than the traditional channel. All we need to do is send text message blasts to them with chat tools, which can be done in only a few minutes. This is much faster and easier than traditional ways—sending notices through fax or telephone. Except for customer service, the graphic designers are also providing a large number of services for distributors: design the store layout for offline stores and provide a complete set of decoration design blueprints and product detail drawings for Taobao stores.

6. Rewards

After the all-round online distribution in October 2009, the company has increased the number of consultations about new business from 0 to 30 per day, which is a huge transformation from scratch after starting the online distribution. And thanks to the online distribution plan advocated by my oustanding marketing team that Tegarmon achieved so much. According to the statistics in 2010, the offline distributors (those who opened offline stores or stocked goods for their online stores) that made transactions with us on the Internet reached a purchase amount of more than 3 million yuan, the wholesale and group buying business had a purchase amount of about 1.5 million yuan, and the retail sales of online distributors contributed to a turnover of 1.8 million yuan.