Tariffs are fueling a quiet shake-up in how holiday toys get to stores

"Under direct import, retailers place big orders months in advance and use their own logistics operations to bring goods to the U.S., with the goal of boosting margins. With domestic shipping, suppliers like Mattel handle the importing and warehousing, while retailers make smaller, closer-to-need orders. Toy maker Hasbro noted the same trend among U.S. retailers in July, saying it expected to see delayed ordering into the fourth quarter as sales ramp into the holidays."

"Mattel CFO Paul Ruh told investors Tuesday that U.S. retailers have made the move to give themselves "more time and flexibility to commit to orders." Ruh called 2025 "an anomaly," but analysts say the pattern may persist as companies brace for continued trade uncertainty. Threat level: Mattel says retailers are waiting longer and ordering in smaller, more frequent batches - giving themselves flexibility but leaving Mattel holding more inventory."

U.S. retailers are shifting from a direct import model to domestic shipping, where suppliers handle importing and warehousing and retailers place smaller, later orders. Direct import previously had retailers placing large orders months ahead and using their own logistics to boost margins. Tariffs and trade turbulence, especially around imports from China, are changing cost math and prompting the shift for discretionary goods like toys. Hasbro and Jakks Pacific reported similar retailer behavior and delayed or reevaluated ordering. Mattel says retailers want more time and flexibility to commit to orders, raising Mattel's inventory exposure as retailers order closer to demand.

Read at Axios