Word-of-Mouth and Referral Marketing Blog

PoundToy: How We Built the UK’s Fastest-Growing Toy Business

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PoundToy is the UK’s fastest-growing online toy store. Their promise is simple: quality toys at a price that beats any high-street retailer. As their name suggests, most toys are sold for just one pound (£1, or about US$1.20). Simple.

Rob tells us word-of-mouth is their most powerful marketing channel. Their business took off through word-of-mouth, and their customers are always sharing tips and tricks with other parents about where to get a good deal.

Co-founders Rob & Elliot are now eyeing international expansion and world domination. To get here has taken a lot of hard work and quite a bit of business savvy, but Rob tells me (with a cheeky grin) that most of the time, he and Elliot were just winging it and making it up as they went along. After all, just four years ago, they were still selling on eBay.

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Cheeky smiles. We should specify: Rob is the one on the right.

1. Where did it all start? “You Should Build A Website”

“You should build a website.”

That was how Rob Owlette met Elliot Lumb. They met through a mutual friend. Elliott was selling toys through eBay. Rob, who had online marketing experience, suggested he build a website and start a business. Elliot laughed it off at the time. Three years later, he came back to back to Rob and they went into business.

PoundToy started with just the two of them. Elliot knew all the right people and was a savvy negotiator and could buy toys for cheap. Rob was a veteran performance marketing who knew eCommerce and how to sell the toys for a profit. Elliot could buy anything; Rob could sell anything – and together they made a great team.

They did okay in the first month. Elliot packed one or two orders a day in his garage and dropped it off at the post office. And then, one morning, they woke up to 200 new orders overnight.

“One of the mums took a photo — ‘Look at all this stuff I got, for just £25!’ and posted it to a Facebook group for parents.” Rob remembers. Overnight, they went from 2 orders a day to 200 orders a day – and just kept growing from there. In the meantime, though, Elliot suddenly had 200 orders to pack by himself.

Elliot and Rob had to scramble and regroup. In the span of a few months, the pair bought more warehouse space, took on an apprentice, quit their jobs and quickly built out the business. They had to pull in their parents and Elliot’s wife to help with answering the phone, while they dealt with picking and packing.

A lot of it was winging it, Rob remembers. Overnight, they went from side-hustle to a thriving small business. That meant a lot of new paperwork and administration. Suddenly, Rob and Elliot had to deal with taxes and laws, figuring out the logistics with the Royal Mail, and even hiring a team. They were making it up as they went along.

But PoundToy was off the ground, and they’ve been growing ever since.

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One of the proud Mums showing off her PoundToy haul. Via PoundToy FB

2. PoundToy’s Biggest Challenge: Logistics

Rob’s biggest challenge is getting the product to their customers. The average PoundToy order is about 25 items. PoundToy offers more than 1500 different toys. Having to pick 25 from 1500 bins is difficult enough.

Add to that the complexity of packing; PoundToy sells everything from small jars of slime to bulky wading pools to flat children’s books to bigger toys like swords. Picking and packing all the toys in a box is a huge challenge.

Having a wide assortment makes PoundToy appealing to so many parents – there’s always something for everyone – but also makes their logistics difficult. It’s also weighing on Rob’s mind as they eye international expansion, with Volumetric Weight being complicated.

But for Rob, it’s a good problem to have.

3. The Biggest Growth Driver: Word of Mouth (and bragging rights!)

“We’re not precious about our prices,” explains Rob. In fact, PoundToy fully embraces its brand values of affordable quality. They offer most toys for a pound, they have massive summer sales at 50% off, and they even have the lowest price guarantee. Rob says after 2 years and thousands of orders, they’ve only had to honor the price guarantee twice.

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PoundToy are extremely generous with sales – and parents love being savvy shoppers. Via PoundToy IG 

PoundToy is where savvy parents shop. And embracing that image has helped tremendously with word of mouth. Happy customers love bragging about the great deals they got, and are constantly sharing it with other parents on Facebook groups, in WhatsApp chats, and in online forums.

“People like to brag about saving money and being a savvy shopper. And that really helps get people to talk about our brand. Mums talk to mums.” And every time a mum posts about her haul, PoundToy gets a small spike in sales.

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Parents love being savvy shoppers and getting a great deal. Via PoundToy FB

Referrals are also a big driver of growth. Rob says that referrals are a perfect fit for their target audience of parents and PoundToy has had great ROI from installing ReferralCandy.

“We got our first referral sale within an hour of installing. It was everything we were looking for: works with Shopify, contributes a huge amount of revenue every month, does everything we need without having to pay a developer lots of money.”

On top of word-of-mouth, PoundToy has a broad marketing mix, with PPC, SEO, social and content marketing. Affiliate marketing is incredibly important, and Rob works closely with mummy bloggers and parenting communities. PoundToy has also tied up with local toy retailers and Nectar, the largest loyalty scheme in the United Kingdom.

PoundToy featured on TV. Via PoundToy YouTube

4. Lesson Learned: Slow Down & Enjoy the Madness

If he had any advice for his younger self, Rob reflects, he would tell himself to slow down and take his time rather than breathlessly rushing onto the next thing.

Rob describes his every day as ‘madness’; no two days have ever been the same. For example, PoundToy recently expanded to sell children’s books, and the category is booming – but it also means more logistical headaches for Rob and the team.

Rob quite likes it: the pace of growth, coming up with new solutions on the fly, solving different problems every day. He has more challenges to come, especially with PoundToy looking towards international expansion. But he’s got a plan, and if not, he’ll just wing it, one toy and one pound at a time.

“Winging it is how you do it when you build something that nobody else has built before.”

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The PoundToy team, as sketched by one of the employees. Rob in white, Elliot in Black.

PoundToy: Links & References

PoundToy: Where Savvy Parents Shop

Darren Foong

Darren works on Growth at ReferralCandy. He spends too much time reading fiction, performing improv, and doing things that don't scale. One day he hopes to be quite interesting.

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