Kazoo Toys: How a Small Business Can Compete with the Big Boys

[tweetmeme]One challenge for small business entrepreneurs is how they can compete — and thrive — against big businesses in their niche. It is hard and scary, particularly if you have limited resources and cannot afford to make mistakes.

But there are small businesses who are able to carve a niche for themselves and succeed, despite the presence of big competitors. One example is Kazoo Toys, a specialty toy store based in Denver who has now expanded on the Internet through their website http://www.kazootoys.com/ .

Diana Nelson, CEO of Kazoo Toys, purchased the store in 1998 and launched the online store in 1999. The Toy Industry Association awarded Kazoo Toys as one of the Top 5 Specialty Retail Toy Stores in North America in 2003, 2004, 2005 and 2006. It was also voted #1 Toy Internet Site in 2006 and 2007 by Playthings Magazine. A recent post in their website show the email from Inc Magazine informing them of the toy store’s inclusion in the Inc 500 listing of top small businesses.

So what factors help this small online store compete with Toys R’Us and other big businesses? From interviews of Diana and other articles on Kazoo Toys, here are what sets this small toy store apart and succeed:

• Customer Service, customer service and more customer service: Testimonials from customers repeatedly harp on the excellent customer service offered by the company. One review from a user:

“I do not remember the persons name that help me with my order but I have to say if you could go pass a 5 being excellent she would get that number. She really went out of her way to help me with my order. Thank you so much, I will be shopping there again”

• Manage the business well: Cut your controllable expenses, increase your margins and increase your visibility.
• Offer something unique in the market: ditch the common products sold by everyone in the market (e.g. Fisher Price and Mattel toys) and offer interesting albeit lesser known products such as Gotz dolls from Germany to innovative new companies such as WaDaYaThink.
• Differentiate your brand: Kazoo Toys is building an excellent reputation for offering unusual toys at great prices.
• Go for calculated risks: While the retail toy store had good bones, Diana knew the future will be the Web and expanded through this medium instead of building more brick and mortar stores.