When it comes to toys, parents know that small children lose interest quickly. Parents may spend hundreds of dollars on toys and other learning tools only to find those toys at the bottom of the barrel after a week. A rental toy business, particularly an online business, that allows parents to rent toys for a specific amount of time, is a convenient solution for frustrated parents. If you are an entrepreneur who likes kids, a toy rental business may be right for you.

Things You Will Need
  • Sales tax permit

  • Room to store inventory

  • Toys

  • Web site

  • Rental policy

Apply for a Sales Tax permit and a federal tax identification number. Without these, many wholesale suppliers won't sell to you. Create a catchy name for your business and consider forming a Limited Liability Company (LLC).

Conduct research on popular toys. Test the toys out on your kids or a family member or friends' kids. Read toy reviews online at such sites as Amazon.com.

Determine where you will store your inventory. To start, consider using a garage or spare room. As your business expands, you can find a larger location. Purchase product insurance and liability insurance through your current home insurance provider or compare quotes online (See Resources).

Build an inventory of popular toys for varying ages from such manufacturers as VTech, Baby Einstein and Fisher-Price. Purchase activity centers, crib toys, mobiles, musical instruments, puppets, learning tools, rattles and puzzles. Remember that you are looking to buy toys that kids will enjoy for a short period of time. High chairs, cribs and other items that will last more than a few months are inappropriate for a rental company. Find wholesale toys at Overstock.com and eBay.com. Contact manufacturers' corporate offices about purchasing wholesale.

Visit the Consumer Product Safety Commission's Web site on a regular basis for the latest recalls and safety information. Review the Guide to the Consumer Product Safety Improvement Act for Small Businesses, Resellers, Crafters and Charities. As a toy retailer, you are not required to test for lead paint; however you cannot knowingly sell a product that has lead paint. Any toy you purchase from large retailers, such as Target and Wal-Mart, will have been tested. However, if a toy can't be verified as having been tested, you may get it done at an accredited lead-testing facility (See Resources).

Choose an e-commerce site to host your toy rental business. Volusion.com offers a package that includes your domain name, shopping cart and web hosting, and starts at $19.95. Corecommerce.com offers packages for as little as $29.95 (you will need to purchase your own domain name). Both of these sites offer business e-mail addresses, Web site templates (and the ability to use your own design), marketing tools, accounting tools, data feeds, Google AdWords coupons, the ability to create coupons or newsletters, and the ability to accept a number of different payment methods, such as PayPal, Google Checkout and credit cards. GoDaddy.com allows you to pick and choose the services you need, such as a domain name or shopping cart. Web hosting starts at $4.99. If you aren't familiar with SEO and online selling, an all-inclusive site, such as Corecommerce.com, may be the way to go.

Design toy rental packages that offer parents a variety of services (e.g. a parent can rent four toys per month for $30). Include an FAQ that addresses return shipping, what happens when a toy is damaged and what to do if a customer wants to purchase the toy. Consider shipping toys already assembled or including easy-to-follow instructions and tools for assembling the toys.

Take high-quality images of your toys. Include relevant information in your product listings, such as what age the toy is designed for, how it works and whether batteries are needed. Create an About Me page that includes a brief biography of your business, as well as your vision and goals. Create a Privacy Notice page that details how you will use your customers' information.


Set up a PayPal, Google Checkout or merchant account so you can accept credit cards.

Check your business e-mail every day. You don't want to lose out on a sale because you neglected a potential customer.

Include testimonials on your Web site.

Purchase your inventory with a card that offers a rewards program, such as cash back or air miles. Depending on how much inventory you purchase, you may earn two to three free flights per year.

If you have Excel, take advantage of it. Keep records of all your purchases for supplies and inventory.

Visit the IRS Web site ASAP and familiarize yourself with your tax obligations.