Running a toy company is anything but child's play

Walled Lake, Mich. — John Gessert remembers his early days in toys. More than 30 years ago, he was on a sales call in Ohio presenting his company's new toy lines. The distributor he called on reviewed the toys, but he told Gessert to beware: If he was still in the same job next year, he'd be in the toy business for life.

"I remember going into his office the next year for the same line review. You had a spring set and a fall set. I walked in and he said, 'I don't know whether to cry or to hug you.' And he's right, I've been in the business ever since," said Gessert, the president and CEO of Walled Lake-based American Plastic Toys Inc.

The toy industry has that effect on people, Gessert said, pointing to the creativity involved and the industry's attraction of entrepreneurs.

"With the toy industry, everyone wants to bring a smile to a kid's face. Everybody wants to provide creative play, productive play," Gessert said.

The Littleton and Yoquelet families launched Gay Toys Inc. in 1962, changing its name to American Plastic Toys in 1986. Gessert started with the company in 1982 right out of Michigan State University, having worked as an intern through a family connection.

"That first summer, I worked with the VP of sales doing market research. Kmart was our biggest client. I traveled to virtually every Kmart in the southern half of Michigan. I checked to see if blue boats sold better than red boats. I met with department managers. I worked with them, asking them how we could be better resources. So, I submitted reports to the vice president of sales but also to the chairman of the board."

His full-time employment began in sales and operations, eventually rising to national sales manager, executive vice president and then president in 2003.

Now, Gessert runs the 300-person American Plastic Toys with its five facilities, 1 million square feet of manufacturing and warehouse space and 60 injection molding machines, supplying every major retailer with toys and now drop-shipping products as requested.

One business advantage for American ​ Plastic Toys is implied in the company name: Made in America, including the company's popular Gigantic Vehicles series. Less than 5 percent of Gessert's company's products are imported and those are primarily the electrical components that some toys include. He's actually in the market for a domestic supplier of a small basketball and net, marking one of the only imports that's not electronics.

"I used to quote that 85 percent of all toys in the United States were made overseas. That percentage was even higher, according to an article in The Wall Street Journal. It was in the mid to high 90s. And that's something that keeps people at American Plastic Toys engaged. They realize they are doing something kind of special. The new generation of employees want to do something special," he said.

Gessert calls American Plastic Toys a midsize company. He points to his experience as the chairman of the Toy Industry Association that shows this range of business is a dying breed in the toy industry.

"There's a few big ones, a ton of small ones, but that middle section is almost nonexistent," he said.

Gessert said that American Plastic Toys is growing and that 2016 was a good year for the toy industry overall.

"Last year, the toy industry had its best year of growth for the last five years. About 4.5 percent increase, which is good because it's a mature industry. We're going through the same transition like everyone else in retail — the conversion from bricks and mortar to online sales. Our stuff is big and bulky. We never thought it would be as good a fit as it's turned out to be."

American Plastic Toys donated its 1 millionth free toy destined for needy kids during the holiday season this year through a partnership with the Society of Plastics Engineers, a resin supplier, label maker and a trucking company.

"Everybody has a part in it and little programs like that start to add up," Gessert said.

American Plastic Toys used to exclusively purchase Van Dorn injection molding machines. Gessert said when Van Dorn went away — the brand is now part of Sumitomo (SHI) Demag — choosing his next primary supplier kept him up at night. They tested three machine brands and landed on Nissei and Milacron.

With that issue now settled, resin is his main concern.

"The fall toy preview is typically the first weekend in October. And that's when we present our Christmas line for the following Christmas. So, the fall toy preview in 2017 will be the fall toy introduction for 2018. So we're 14 months out. … If you want to see a plastic producer or a plastics sales person or wholesaler's head explode, say to them: 'Tell me what you think plastics [prices] is going to be in 12 months.'

"But that's what keeps me up at night. I don't begrudge the plastics companies to make money on their product. But the volatility that we've had. And I'm really fortunate. I've got some phenomenal suppliers that we work with for plastics," he said.