Sector guide · Toy, gift & hobby retail
Selling a toy, gift or hobby business
Your December takings are not the business a buyer is pricing, and your button battery compliance file is worth more in due diligence than every fixture in the shop. This guide sets out the mandatory safety standards that bind you as a supplier, why importing makes you the manufacturer under section 7(1)(e) of the Australian Consumer Law, and what the Retail Shop Leases Act 1994 (Qld) requires before your landlord must release you.
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How do you sell a toy, gift or hobby business in Queensland?
Selling a toy, gift or hobby business in Queensland turns on product compliance and the lease. Mandatory safety standards made under the Competition and Consumer Act 2010 are enforced by the ACCC and published on the Federal Register of Legislation. If you import stock, section 7(1)(e) of the Australian Consumer Law makes you the manufacturer. Retail leases are governed by the Retail Shop Leases Act 1994 (Qld).
- Buyers assess a toy, gift and hobby business on supplier and distribution rights, brand strength and how much revenue survives without the owner.
- Exclusive or agency distribution rights are among the most valuable and least replicable assets in the sale.
- Seasonality is expected in this sector. What matters is that the working capital cycle behind it is documented.
- Aged stock is discounted or excluded at settlement, so the inventory position is worth cleaning up before market.
The short answer, in six lines
Everything below is expanded further down the page, with the register or the regulator named so you can check it yourself.
At a glance
Competitors buying range, supplier accounts and catchment, operators adding a second brand through warehouse and pick and pack capacity they already pay for, and private buyers leaving salaried roles. Where the business imports under its own brand, buyers lean toward acquiring the company rather than the assets, because deemed manufacturer status under section 7(1)(e) of the Australian Consumer Law attaches to the importing entity.
No occupational licence is required to retail or wholesale toys, gifts or hobby goods in Australia. What binds you instead is product compliance. Mandatory safety and information standards made under the Competition and Consumer Act 2010 apply to you as a supplier regardless of turnover, and character or brand licences are contracts that normally need the licensor’s written consent to move.
Stock at an agreed valuation, plant, fixtures, fit out, the customer and trade database, trade marks by signed assignment recorded with IP Australia, and the lease by assignment under the Retail Shop Leases Act 1994 (Qld). Outstanding indent and forward orders transfer only if the contract schedules them. Your ABN does not transfer, and the buyer applies for a new one.
Stock quality before stock quantity, meaning aged and dead stock bands by receipt date and sell through by supplier and class. Then the compliance file: test certificates and artwork proofs for every SKU containing a button or coin battery, and evidence of any report made under section 131 of the Australian Consumer Law.
Six to nine months from appraisal to settlement is a reasonable planning range. Longer where the landlord’s consent to assignment is required, where a licensor has to approve a change of control, or where a stocktake has to be timed away from the fourth quarter peak. Plan the settlement date around the buying calendar, not the sales calendar.
Gross margin return on inventory investment rather than turnover, the proportion of sales concentrated in the fourth quarter, supplier account terms and exclusivity, and the state of the compliance folder. Stock is normally negotiated separately at valuation, with dead stock excluded or valued at nil.
A flat annual figure hides the eight weeks that pay for the year
Show a buyer twelve months as one number and they will assume the risk is spread across it. Show them the same year month by month, with the trading pattern and the stock build that supports it, and seasonality stops being a surprise and starts being a plan.
Inventory, and what it is genuinely worth
All four instruments were registered on 21 December 2020 and became mandatory on 22 June 2022, at the end of an 18 month transition period. Exemptions across the set include hearing aids and zinc-air hearing aid batteries, batteries soldered into audio-visual and IT equipment, professional-use equipment and bulk professional supply, and one-off consumer resales. Source: ACCC Product Safety Australia, current as at August 2026.
Owner dependence, buying and range selection
In a toy business the owner does the buying, and that is you. They go to fair, they pick the range, they judge what will sell. That instinct is genuinely valuable, and it is also the owner dependence problem in this sector, because it walks out the door at settlement.
Documenting the buying process, building a second person capable of range selection, and being able to show a buyer that the last two seasons were bought by someone other than you is among the highest return preparation work available in this business.
Gift shops, homewares and hobby retail
Everything on this page applies equally to gift, homewares and hobby retail. The buyer questions are near identical because the economics are the same: seasonal revenue concentration, stock that ages badly if it is bought wrong, supplier and agency terms that may or may not transfer, and a lease that often carries more weight in the negotiation than the profit figure does.
Wholesale and distribution businesses in this space are assessed differently again. There the buyer is looking at your stockist base and how concentrated it is, whether you hold exclusive distribution or agency rights for any brand and whether those rights survive a change of ownership, your minimum order terms, and how much of the range is genuinely yours rather than resold. An exclusive agency that terminates on sale can hollow out a wholesale business overnight, and it is the first thing I check.
If you run both, a retail front and a wholesale arm, or bricks and mortar alongside an online store, present them as separate profit centres with their own numbers. Buyers frequently want one and not the other, and a business that can be cleanly split usually attracts more interest than one where the numbers are tangled together.
Not in this sector?
I sell businesses in every industry. These nine are the ones I have run, built or worked in, which means I can talk to a buyer in their own language from the first meeting. That is an advantage where it applies, not a limit where it does not.
E-commerce & retailRan a national online window furnishings retailer, and co-founded and sold a toy business built to several million a year.
Transport & logisticsTwenty years around trucks, trailers and fleets, and what a financier looks at before your profit.
Earthmoving, plant & civilIndustrial auction and remarketing. Machine hours, condition and the difference between the two.
Construction & buildingThe QBCC licence question comes before the price question, every single time.
Mining services & supplyPrequalification status and safety record price straight into the multiple in this sector.
Window furnishings & interiorsRan one. Custom manufacture, measure and install, and where the revenue ceiling actually sits.
You are reading this oneToy, gift & hobby retailCo-founded one with my wife, built it across store and online, and sold it. I have sat on your side of this.
Turf farmsMy father in law built a turf farm and sold it to his competitors. A sector few brokers have been near.
OH&S consultancy & trainingCertificate IV in Training and Assessment, and safety training systems built from scratch. Including RTO risk.Nine published seller guides, and the one you are on is marked. Every industry outside the nine gets the same process, the same buyer research and the same discipline. View all seller guides.
Who wrote this, and why he has sat exactly where you are
Tony Pope holds Queensland Office of Fair Trading licence 4963575 and is a member of the Australian Institute of Business Brokers. Of every page on this site, this is the one written from the inside. He co-founded this exact kind of business. He and his wife owned it and built it together, from a home based startup into one of Australia’s largest independent children’s and educational toy retailers, carrying over 4,000 SKUs and turning over several million dollars a year, including the fit out of a 600 square metre retail and warehouse facility. Then they sold it. That means he has sat on the seller’s side of due diligence in this category, with his own money on the outcome. He built the barcode driven SKU system and the automated pick and pack workflow behind it, which is the difference between a stock figure you can settle on and a stock figure you argue about for three weeks. He orchestrated the acquisition and integration of a major competitor, so he has sat on the buyer’s side of a transaction in this exact category and then done the integration afterwards. He navigated the COVID demand surge at over 80 per cent growth through inventory control and supply continuity, which is a polite way of describing eighteen months of allocation calls and container delays.
That is why this page opens on seasonality rather than on multiples. He has lived a fourth quarter that carries the year, and he knows what it does to a stocktake, a cash flow forecast and a settlement date. Every figure on this page is traced to a primary source: the Federal Register of Legislation, the ACCC and Product Safety Australia, IP Australia, the Fair Work Ombudsman, the ATO, the ABS and Queensland Legislation. The sources are listed above so you can check them yourself. Where something could not be verified against a primary source it is flagged in the text rather than filled in. That is why you will find plain notes about the aquatic toys transition dates and about the effective date of the magnets ban.
Questions people ask
3 of the 23 answered in full on the questions page for this topic.
What product safety standards apply to the toys I sell?
Five mandatory safety standards apply across the toy category, each made under the Competition and Consumer Act 2010 and each registered on the Federal Register of Legislation. They cover toys for children up to and including 36 months, lead and certain elements, projectile toys, aquatic toys and toys containing magnets.
Do the button battery rules apply to everything in my range?
They apply to any consumer good containing a button or coin battery, and to loose button and coin batteries sold on their own. That is far wider than the toy aisle. Light-up accessories, greeting cards with sound modules, novelty keyrings, digital notepads, remote controls and craft kits are all caught.
I import my own stock. Does that make me the manufacturer?
Yes, in the situation that describes a large part of this category. Section 7(1)(e) of the Australian Consumer Law deems you the manufacturer where you import goods into Australia, you are not the maker of those goods, and the maker has no place of business in Australia at the time of importation.
More questions toy and gift owners ask, all 23 of them.
Go deeper
The long form, where it belongs
The full detail is on the pages below, each on its own page.
Check it yourself12 primary sources
Primary sources, none of them affiliated with me and none of them endorsing this site. Where anything here differs from an official source, the official source is right.
The terms a buyer and their accountant use in a toy business sale10 definitions
Plain definitions of the words a buyer, a financier or a regulator will use. Where a term has a statutory anchor, it is named.
An order placed directly against a supplier’s forthcoming production or import shipment, usually at a trade fair or seasonal range presentation, for delivery months later. Indent orders are typically non-cancellable and sit on different terms from stock-on-hand orders. The indent order book is a material item in a toy or gift business sale because it binds the buyer with commitments made before settlement.
A supplier treated as the manufacturer of goods under section 7(1)(e) of the Australian Consumer Law. It applies where a person imports goods into Australia, is not the maker of those goods, and the maker has no place of business in Australia at the time of importation. The deemed manufacturer carries manufacturer liability, including liability for goods with a safety defect and consumer guarantee actions brought against manufacturers.
The proportion of stock received in a period that is sold in that period. Units sold divided by units received, or by opening stock plus receipts, expressed as a percentage. Measured weekly or monthly by SKU, class or supplier, it is the number that separates a range that works from a range that has been bought badly.
Aged stock is stock on hand beyond a defined threshold, banded by days from receipt, commonly 90, 180 and 365 days. Dead stock is stock with no realistic prospect of sale at or near cost, such as discontinued lines, broken assortments, damaged goods and superseded licensed product. In a sale, dead stock is normally excluded from the stock at valuation figure or valued at nil.
A planned forward purchasing budget for a period, in dollars or units. It is calculated as planned closing stock plus planned sales plus planned markdowns, less opening stock and less stock already on order. It is the amount a buyer is still free to commit, and a business with no open to buy left for the coming season has already spent the incoming owner’s money.
Gross margin return on inventory investment. Gross margin dollars divided by average inventory at cost, expressing the gross profit returned for each dollar invested in stock. It combines margin and turn in one figure, which is why it describes a toy or gift business better than gross margin percentage alone.
The Queensland Government defines stock turnover as the number of times the stock in a business has turned over, or been replaced, in a year. The formula is cost of goods sold divided by average stock. Reported alongside GMROI, it shows whether margin is being earned on stock that moves or stock that sits.
The total cost of getting one unit into the warehouse. Ex-works or FOB cost, plus freight, insurance, customs duty, port and clearance charges, the import processing charge, currency conversion cost and inland freight. It excludes recoverable GST. A margin calculated on invoice cost rather than landed cost overstates the business.
Recommended retail price, being a supplier’s suggested selling price. A supplier in Australia may recommend a price but must not require a minimum resale price. Resale price maintenance is prohibited under Part IV of the Competition and Consumer Act 2010, so a supplier agreement that fixes your floor price is a diligence issue, not a commercial nicety.
A factor for each month or week expressing that period’s sales as a ratio to the average period, used to plan buying, cash and staffing. A December index of 2.5 means December sales run at 2.5 times the average month. The ABS does not publish a toy, hobby or gift turnover series, so any index has to be built from your own point of sale history.
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