More questions toy and gift owners ask

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.

The instruments are the Consumer Goods (Toys for Children up to and including 36 Months of Age) Safety Standard 2023 (F2023L01185), the Consumer Product Safety Standard: Lead and Certain Elements in Children’s Toys, being Consumer Protection Notice No. 1 of 2009 (F2009L00223), the Consumer Goods (Projectile Toys) Safety Standard 2020 (F2020L00687), the Consumer Goods (Aquatic Toys) Safety Standard 2026 (F2026L00797) and the Consumer Goods (Toys Containing Magnets) Safety Standard 2020 (F2020L01074).

Three permanent bans sit alongside them. Small high-powered magnets are banned under Consumer Protection Notice No. 5 of 2012 (F2012L02171) where separate or loose magnets are supplied in multiples of two or more, fit within the small parts cylinder and have a magnetic flux index greater than 50 (kG)² mm². Yo-yo water balls are banned under Consumer Protection Notice No. 20 of 2011 (F2011L00230), and that ban is still current. Children’s plastic products containing more than 1 per cent diethylhexyl phthalate are banned under Consumer Protection Notice No. 11 of 2011 (F2011L00192).

The obligation attaches to you as a supplier, and supplier under the Australian Consumer Law covers manufacturers, importers, wholesalers and retailers. You cannot discharge it by relying on an assurance from the party who sold you the stock. That is the point the Federal Court made in the City Beach proceedings decided on 22 December 2025.

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.

Four instruments make up the regime, all registered on 21 December 2020 and all mandatory from 22 June 2022 at the end of an 18 month transition. Two are safety standards, F2020L01656 for products containing the batteries and F2020L01658 for the batteries themselves. Two are information standards, F2020L01657 and F2020L01659, which govern the warnings on packaging and in instructions.

Exemptions across the set are narrow. They 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. A general purpose gift or toy range will rarely fall inside any of them.

Treat compliance evidence as an asset with a dollar value. A buyer who is given a folder with a test certificate and an artwork proof for every affected SKU will price the stock. A buyer who is given nothing will either discount the stock or ask for an indemnity that survives settlement.

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.

The ACCC states the position plainly on its product safety guidance: a manufacturer includes a company that imports the goods where the maker of the goods does not have an office in Australia. If you buy direct from an overseas factory or an overseas brand owner with no Australian entity, you are that company.

The consequence is not paperwork. Manufacturer liability under the Australian Consumer Law includes liability for goods with a safety defect and consumer guarantee actions brought against manufacturers, not just against sellers. It is a different and longer tail of exposure than the retailer obligations you already carry.

Where you buy the same lines through an Australian distributor rather than importing them yourself, the distributor generally carries that deemed manufacturer status instead. Mapping your range by import route, direct import against domestic distributor, is one of the more useful things you can do before a buyer asks.

It depends on how the deal is structured, and this is one of the few sector questions where structure changes the answer rather than just the tax. Deemed manufacturer status under section 7(1)(e) of the Australian Consumer Law attaches to the entity that imported the goods, not to the shopfront or the brand.

In an asset sale, the importing entity is the company or trust you keep. The buyer takes the stock, the fixtures and the lease, and you keep the historic liability for goods your entity brought into Australia. You will normally be asked for warranties and an indemnity on compliance, and those are worth negotiating hard because they are the tail you cannot hand over.

In a share sale, the buyer acquires the entity and the liability travels with it. That is why buyers of importing businesses run deeper compliance diligence on a share sale, and why they price it. Expect requests for test reports, supplier declarations of conformity, artwork approval records and any report lodged under section 131 of the Australian Consumer Law.

Neither structure removes the exposure from the world. It just decides who is holding it after settlement. Get advice on structure from your accountant and your solicitor before you go to market, because it is very hard to change once a buyer is at the table.

A SKU-level compliance register, and in this category it is the first thing a competent buyer requests. For every product containing a button or coin battery, a test certificate against the applicable standard and an artwork proof showing the required warnings on packaging and in the instructions.

Beyond batteries, expect requests for test evidence against the standards that apply to your range. Small parts assessment against the small parts cylinder for toys aimed at children up to and including 36 months, migration limits for the eight elements under F2009L00223, projectile energy and the warning statement for anything that launches, and magnet flux index evidence for construction and puzzle lines.

Buyers also ask for the reporting history. Section 131 of the Australian Consumer Law requires a supplier to report within 2 days of becoming aware that a consumer good they supplied has caused, or may have caused, death, serious injury or serious illness. A clean, documented reporting history is a positive finding. A gap in the record is not.

Recall exposure is checked against the Product Safety Australia recalls register. A buyer will search your supplier names and your own brands. Knowing what is on that register about your suppliers before the buyer does is straightforward preparation.

Nothing happens automatically, which is the problem. Indent and forward orders placed at trade fairs months earlier are commitments of your entity, and unless the sale contract schedules them and the buyer expressly assumes them, you are the one who has to take delivery and pay.

Build the schedule before you go to market. For each outstanding order, list the supplier, the SKUs, units, agreed price, the delivery window, deposits already paid and whether the order is cancellable. Toy and gift suppliers commonly treat indent orders as non-cancellable once the production slot is allocated, so the cancellation column often reads no.

Then decide who wears them. Common outcomes are the buyer assuming the whole book at cost, the buyer assuming orders landing after settlement while you fund anything already in transit, or the value of the book being deducted from the price. Whichever you agree, put it in the contract with the schedule annexed.

The timing risk is real. A settlement in September can leave you liable for a Christmas order book that the buyer will sell and you will have paid for. Aligning the settlement date with the delivery windows on that schedule is worth more than a small movement on price.

Your landlord cannot unreasonably withhold consent, and since 1 August 2025 that is a statutory position across Queensland. Section 142(3) of the Property Law Act 2023 (Qld) states the obligation and it cannot be contracted out of, and section 142(5) gives the landlord one month to respond after receiving the required information.

The mechanism is a proposal notice from you followed by a decision notice from the landlord. Under section 142(8), if the landlord delays or refuses without justification, you can apply to the court. That is a meaningful change from the position before 1 August 2025, and it applies to leases entered into before that date as well.

Where the premises are a retail shop, the Retail Shop Leases Act 1994 (Qld) applies on top. Section 22B requires you to give the prospective assignee a disclosure statement and a copy of the current lease at least 7 days before the earlier of entering the assignment agreement or asking the landlord for consent. Section 22C requires the landlord to give the assignee a disclosure statement and a copy of the lease at least 7 days before the assignment is entered into.

Plan for the landlord to want financial and trading information about the buyer. Section 22D requires a prospective assignee who is not a major lessee to give a financial advice report and a legal advice report before entering into the assignment. Getting the buyer moving on those two reports early is often what decides whether a settlement date holds.

Only if you got the disclosure right and on time. Section 50A of the Retail Shop Leases Act 1994 (Qld) requires the landlord to release the assignor and any guarantor from the lease, but that release is conditional on the assignor having complied with sections 22B and 22C.

That makes the 7 day disclosure window the deadline that decides your exposure in a Queensland retail sale. Miss it, and the statutory release under section 50A is not engaged, and you can remain exposed on the rent and the make good after the buyer has walked into your shop.

There is a partial safety net. Section 22B(1A) allows later delivery of the assignor’s disclosure statement where the prospective assignee gives a waiver notice, and section 22E allows a party entitled to a disclosure document to apply to QCAT within 2 months for an order that the document be given. Neither is a substitute for meeting the deadline in the first place.

Separately, sections 143 and 144 of the Property Law Act 2023 (Qld) provide that on a further assignment the original tenant and guarantors are released from post-transfer liabilities, notwithstanding contrary lease wording. Have your solicitor confirm how the two Acts interact on your particular lease before you sign anything.

Employment does not transfer automatically. The buyer chooses whether to offer employment, and the transfer of business provisions in sections 311 to 316 of the Fair Work Act 2009 (Cth) then decide what service has to be recognised.

Three entitlements are not negotiable where there is a transfer of business. The new employer must recognise service with you for personal and carer’s leave, requests for flexible working arrangements, and parental leave. Those carry across regardless of what the parties would prefer.

Three others are a choice for a new employer who is not an associated entity of yours. Redundancy pay, annual leave, and the unfair dismissal minimum employment period. If the buyer does not recognise service for redundancy, you owe redundancy pay on termination unless the employee rejected an offer on similar terms that recognised service. If the buyer does not recognise service for annual leave, you must pay out the accrued leave. The unfair dismissal qualifying period can only be reset if the employee is told in writing before the new employment starts.

Check award coverage while you are at it. The General Retail Industry Award 2020, code MA000004, covers the retail sale or hire of goods for personal, household or business consumption, with the current consolidated version incorporating amendments to 10 December 2025. Warehousing and distribution are among the exclusions, which matters if your business runs a separate wholesale operation.

Accrued long service leave and continuous service transfer to the new employer. Queensland long service leave is governed by the Industrial Relations Act 2016 (Qld), and the Queensland Government states that a transferred employee is entitled to all long service leave accumulated for the total period of their employment, including leave accumulated with the previous employer.

The entitlement is 8.6667 weeks of paid leave after 10 years of continuous service. A further 5 years gives an additional 4.3333 weeks, taking it to 13 weeks at 15 years, after which leave accrues without further qualifying periods.

The protection is not avoided by a break at settlement. Where an employee is dismissed on the change of ownership and rehired by the new employer within 3 months, continuity is preserved. The Queensland Government describes this as not negotiable.

Pro rata sits between 7 and 10 years in defined circumstances, including death, illness, domestic necessity, unfair dismissal, and employer-initiated dismissal not related to conduct, capacity or performance. After 10 years, pro rata on termination is automatic. Quantify the liability across your team before you set a price, because a buyer will.

Usually only with the licensor’s written consent, and that consent is not a formality. IP Australia’s guidance on licensing sets out that a licence agreement should specify assignment and transfer rights, meaning whether the licensee can transfer their rights to third parties, and that this typically requires the licensor’s written consent.

IP Australia also expects a licensor to vet any third party assuming licensee rights, checking that they will not breach conditions, will maintain quality standards and will not cause reputational harm. Read that from the other side of the table. Your licensor is entitled to assess your buyer, and will.

A share sale does not reliably solve it. Where the licence contains a change of control clause, acquiring the company triggers the same consent requirement as assigning the agreement. The specific mechanics of approval rights, minimum guarantees, territory, royalty reporting and sell-off periods are contractual, and there is no Australian legislation that sets them, so the only reliable source is the agreement itself.

Practical sequence: read every licence agreement before you go to market, identify the consent and change of control clauses, and have an early confidential conversation with the licensor. Discovering a non-transferable licence at week ten of due diligence is how deals on licensed ranges fall over.

Only if they are registered and certified. A registered design protects the overall visual appearance of new and distinctive products, and IP Australia is explicit that a design must be both registered and certified through examination before it can be enforced. An uncertified registration is not an enforceable right.

Copyright will generally not fill the gap for a manufactured product. Sections 74 to 77A of the Copyright Act 1968 operate so that copyright in an artistic work is not infringed by making a product embodying a corresponding design once that design has been industrially applied. Regulation 12 of the Copyright Regulations 2017 treats a design as industrially applied where it is applied to more than 50 articles.

The practical effect for this category is blunt. A toy or giftware line made in a run of more than 50 units generally loses copyright as the operative right in the shape. Vendor materials that claim our designs are protected are routinely overstating the position, and a buyer’s lawyer will test it in the first week.

Design rights are also short. The maximum term is 10 years, requiring renewal after the initial 5 years. IP Australia indicates registration takes about 2 months and certification about 4 months, so if you have unregistered designs worth protecting, starting the process before you go to market is realistic. Starting it during due diligence is not.

Not if you can produce the paper trail. Section 122A of the Trade Marks Act 1995, inserted by the Intellectual Property Laws Amendment (Productivity Commission Response Part 1 and Other Measures) Act 2018, provides a defence where the person had made reasonable inquiries in relation to the trade mark.

The test is what a reasonable person would have concluded after making those inquiries: that the trade mark had been applied to the goods by, or with the consent of, a relevant person. Relevant person includes the registered owner, an authorised user, a permitted user, a person with significant influence over use of the mark, and an associated entity within the meaning of the Corporations Act 2001.

The burden sits on the importer to have made and documented the inquiries. That means keeping the chain of title evidence, supplier declarations and correspondence for each parallel imported line. A buyer conducting due diligence will ask for that evidence trail, and its absence turns a lawful trading practice into an unpriceable risk.

There is a separate consumer-facing consequence to explain to a buyer. The ACCC states that where there is a consumer guarantees problem with a parallel import product, the seller is responsible for providing a solution to the consumer. A manufacturer’s warranty may not apply in Australia, and the local authorised distributor is not responsible for problems with parallel imports.

They are resolved on the Personal Property Securities Register, and in a stock-heavy category they need to be resolved before settlement, not at it. Suppliers who provide stock on consignment or under retention of title register purchase money security interests, which carry super-priority over other registered interests in the same collateral.

Run an organisation search against your own entity first. Every registration you find is either current and needs to be disclosed to the buyer, or discharged and needs to be cleared off the register. A buyer will run the same search, and unexplained registrations against your ABN are among the fastest ways to lose momentum in a deal.

The reverse also matters if you wholesale. Where you supply stock to retailers on consignment or under retention of title, an unregistered interest ranks as unsecured. If a stockist fails, you rank behind registered creditors for stock you still consider yours. A buyer of a wholesale business will check whether your registrations are in place and correctly described.

Deal with this early because discharges take supplier cooperation and supplier cooperation takes time. Settlement conditions that require a clear PPSR search as at the settlement date are standard, and they are only comfortable if you started the clean-up months beforehand.

Yes. Section 131 of the Australian Consumer Law, in Schedule 2 to the Competition and Consumer Act 2010, requires a supplier to report within 2 days of becoming aware that a consumer good they supplied has caused, or may have caused, death, serious injury or serious illness. Where the second day falls on a weekend or public holiday, the deadline moves to the next business day.

The trigger is low. The obligation applies whether you become aware directly or through a customer, and it applies regardless of whether you believe the product caused the incident. Reporting details are prescribed by regulation 92 of the Competition and Consumer Regulations 2010 (Cth). Section 131(2) extends the obligation to product related services.

The ACCC has enforced the deadline itself rather than the underlying incidents. It cites Woolworths paying $57,000 for failing to lodge 8 mandatory reports on time, and Thermomix paying $108,500 for failing to lodge 14 reports within the 2 day deadline.

If you know of an unreported incident, get advice from your solicitor before you go to market rather than after a buyer’s lawyer finds it in your customer service inbox. A disclosed and managed historical issue is a negotiating point. An undisclosed one discovered in diligence is usually the end of the deal.

The sale can be GST-free as the supply of a going concern where three conditions are met. The sale is for payment, the purchaser is registered or required to be registered for GST, and the purchaser and seller have agreed in writing that the sale is of a going concern. The governing ruling is GSTR 2002/5.

The ATO also expects the sale to include everything necessary for the continued operation of the business, and the business to be carried on by you until the day of sale. In a toy or gift business, the first of those is where the risk sits. A licensed range that cannot be transferred without consent, or supplier accounts that do not move, are gaps in what is being supplied.

Get the written agreement into the contract of sale. It has to be in place at the time of supply, not documented afterwards by an invoice notation or an exchange of emails once settlement has happened.

Keep trading right up to settlement. Running down the range, cancelling forward orders and letting the shelves empty during a long settlement period puts the going concern treatment at risk and reduces the business the buyer agreed to purchase. This is one of the areas where a broker and an accountant should be talking to each other rather than to you separately.

Possibly, through the small business capital gains tax concessions administered by the ATO. There are four: the small business 15-year exemption, the small business 50 per cent active asset reduction, the small business retirement exemption and the small business roll-over.

Basic eligibility requires you to be a small business entity with aggregated turnover of less than $2 million, or to satisfy the maximum net asset value test, and then to satisfy the active asset test. Aggregated turnover counts connected entities and affiliates, which catches structures where the shop, the warehouse property and a wholesale arm sit in separate entities.

Timing and structure both matter, and both are decided long before settlement. Whether you sell shares or assets, who owns the trading entity, and how long assets have been held all feed into eligibility. That is a conversation to have with your accountant at the appraisal stage.

Nothing on this page is tax advice. The concessions are set out on the ATO website and the eligibility conditions are detailed. Get the position confirmed in writing by your accountant before you commit to a deal structure.

Four years of monthly point of sale data at SKU level, aged stock bands, sell through by supplier and class, and gross margin return on inventory investment. Those four tell a buyer more about a toy, gift or hobby business than the profit and loss does.

Add the compliance register, the outstanding indent and forward order schedule, and a PPSR organisation search on your own entity. Those three are the documents that cause delays when they are missing and build confidence when they arrive on day one of due diligence.

Do not lean on external retail benchmarks that no longer exist. The ABS ceased Retail Trade, Australia with the June 2025 issue released on 31 July 2025, and the Retail Business Survey ceased with it. The replacement Monthly Household Spending Indicator publishes a Recreation and culture category, which rose 1.4 per cent in the month and 5.0 per cent through the year to June 2026, but it is household spending rather than retail turnover.

There has never been an ABS turnover series specific to toys. Toy and Game Retailing is ANZSIC 2006 Class 4243 and gift shops fall in Class 4279 Other Store-Based Retailing n.e.c., and neither was published as a separate line in Retail Trade. Your own point of sale history is the only reliable seasonality evidence you have, which is why four years of it is worth more to a buyer than any market report.

Not if it is presented properly. Every experienced buyer in the sector understands that toy revenue concentrates into the Christmas quarter. What damages a sale is showing a monthly revenue chart without context, so it reads as volatility rather than a predictable annual cycle. Three to four years of monthly figures side by side, with the working capital cycle explained, turns the seasonality from a concern into evidence of a business that is understood and managed.

That depends entirely on what the agreements say, and it is one of the first things to check. Many distribution arrangements are personal to the principal or carry change of control provisions that let the supplier terminate on a sale. If a large share of your revenue rests on brand relationships that do not survive the transaction, a buyer is acquiring far less than the headline numbers suggest. Establish this early with the actual documents in front of you, not from memory.

Realistically, not at cost. Slow moving lines, discontinued ranges, damaged packaging and seasonal stock from previous years are not worth what the accounts say, and any experienced buyer will test it. Going to market with an ageing analysis by line, sell through rates and a write down already taken feels like giving money away, but it does the opposite. It gives a buyer confidence in every other figure you have presented.

Neither is automatically worth more. Wholesale tends to have stickier customer relationships and lower working capital per dollar of revenue, while retail can carry better margins but more fragmented demand. What actually drives the price is the same in both: transferable supply arrangements, realistic inventory, revenue that does not depend on the owner's buying instinct, and a channel mix that is not overexposed to a single marketplace or account.

Six to nine months from the appraisal to settlement, of which three to six is the market campaign and contract. Preparation before the appraisal is additional. Timing matters more in this sector than most. Going to market with the Christmas quarter still ahead of you generally presents better than trying to sell in the February to April lull, when the numbers look their weakest and stock levels are at their lowest.