If you have young children, operate a daycare, or work in an elementary school, then you may have heard of Discovery Toys. This company, which operates on a direct sales, multilevel marketing model, offers a range of educational toys geared towards children ages 0-8 years of age, as well as toys that engage the entire family.
How does Discovery Toys operate?
Discovery Toys (DT) does not sell its products through retailers. Instead, as a direct sales company, DT sells to independent consultants, called Educational Consultants (ECs). These ECs purchase the items at discount, after which they sell them to customers at full retail price.
Currently, ECs purchase DT products at a 34% discount.
The toys that DT offers appear to be of good quality and comparable price to other similar toys. The following screen shot of the site catalog showcases toys you’d purchase for an 8-year-old child:
Discovery Toys kits
To get started as an EC, one first purchases a starter kit from the company for $79 (USA) or $109 (Canada). This kit contains a few company products, access to a personal website, and business materials (order forms, etc.)
The next size up is the Business Launch Kit, which costs $139 (USA) or $179 (Canada). There is also the Business Builder Kit, which goes for $369 (USA) or $469 (Canada). The more money you pay for each kit, the more toys you receive. These toys are important because, as an EC, you will be expected to host at-home parties as your primary means of showing and marketing DT products.
You can also host a DT party without signing up to be an EC. By doing so, you score free and discounted products depending on your party sales and how many of your guests sign up to host a party of their own.
As an EC, you are compensated a little differently. You earn money from your product sales as well as bonuses. You can also earn commissions from ECs that you recruit.
The DT website does not list its EC compensation plan; however, I was able to discover it by performing a Google search. There are eight levels of consultants in DT, with each level having its own sales goals and corresponding commissions and bonuses.
Overall, as advertised on the actual DT website, ECs can earn 25 – 34% on their personal sales and up to 7% on team sales.
Discovery Toys: Pros and Cons
As with all direct sales MLMs, there are pros and cons to joining the business and pitching its products. Here are the results for Discovery Toys:
Quality toys– DT features toys for different ages that are organized to foster growth of specific developmental goals, such as social interaction, problem-solving, logic, etc. Some toys have been specifically developed for children with autism and special needs and are marked with a symbol denoting this. DT also offers a chart explaining which toys are intended for children with different developmental challenges. Finally, DT’s products have received excellent reviews from occupational therapists, daycare providers, and special needs teachers.
Cookie-cutter websites– DT offers you your own ‘personal’ website as a way to generate online product sales. However, the websites are cookie-cutter, meaning that every EC’s website looks about the same.
If you’re hoping that your personal website will be indexed by Google, think again. The only customers who will find your site will be those that you tell.
Low compensation– ECs earn only 20% on their monthly sales of up to $250, and an additional 5% if they exceed that amount. For a starting EC, that is extremely low and hard to make a decent profit at. It’s also hard to offer any kinds of promos or discounts with such a tight profit margin.
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Party marketing– DT emphasizes the party model of selling, which is a good tactic when you are starting out and your friends and family members aren’t yet tired of DT. But once you’ve hosted three or more parties, no one in your immediate social circle will want to attend “yet another Discovery Toys party.” You’ll need to branch out online, via third party selling platforms, etc…and DT offers little to no advice on how to tackle those selling domains.
eBay competition– Search for DT on eBay and you will (currently) find over 8,500 listings, with many products priced far below their suggested retail price. With this kind of stiff competition, you’ll be hard-pressed to sell your products and make a good income from them.
Discovery Toys: Good products, not so good business
DT offers an impressive lineup of toys for kids of varying ages nd developmental stages. While the toys are of good quality and well-researched, the business model is lackluster. The company provides little direction except to sell via home parties, and 20% commissions on product sales means that, even if you throw great at-home parties and know lots of young families, you’ll still be scraping by.
Think about it: if you throw two parties a week that average an impressive $1,500 in product sales, that will give you $6,000 for the month. Even with your bonuses, you’ll be walking away with only $1,620. Over the course of a year, that doesn’t even take you above poverty line income.
Simply put, you’re better off looking elsewhere.
If you’ve had experience selling DT products, I’d love to hear from you! Please leave a comment below.