With the approaching Christmas shopping peak season, American retailers are stocking up. China is the world’s largest toy manufacturing country, producing most of the toys sold in the American market. The process of how a toy priced at $30 at retail, from being manufactured in Chinese factories, shipped, paying tariffs, to finally being displayed on shelves, reveals the profit structure behind the US-China trade.
Most children’s toys sold in the US bear the words “Made in China” at the bottom. According to a BBC report on October 15 citing data from the US government, in 2024, nearly 78.3% of toys imported into the US came from China, with an import value of $9.8 billion.
As Christmas approaches, the toy industry in the US and other regions is gearing up for its busiest time of the year.
Whether it’s online retail giants or small physical stores, retailers are preparing for the holiday shopping peak season. Let’s take a closer look at how toys are transported from Chinese factories to the US and the flow of funds.
Guangdong Province, located in southern China and adjacent to Hong Kong, is the center of China’s toy manufacturing industry.
In Dongguan City, workers at the Mihox toy factory are taking plastic toys out of steel molds in the workshop, stacking them in boxes, and preparing for painting. The company says they have over 800 employees and produce about 55 million toys for the US market each year, accounting for half of their total business.
Each toy is designed by clients like American toy companies, and the factory then makes prototypes and molds to produce plastic parts and other components using those molds.
Melanie Wang, a member of the sales team at Mihox, said factories usually receive about 20% of the retail price of toys.
For example, for a toy with a retail price of $30 in the US, the manufacturing cost charged by Chinese factories is about $6, covering materials, labor, production costs, and factory profit.
Jay Foreman, CEO of US toy company Basic Fun, said profit margins for Chinese toy factories are usually around 3% to 10%. This means for a toy with a retail price of $30, the factory’s profit is between 18 cents and 60 cents.
Regarding wages, the full-time minimum monthly salary standard implemented in Dongguan City since September 2026 is 2,300 RMB, approximately $324. The comprehensive monthly income for ordinary workers ranges from 4,500 RMB to 6,500 RMB, about $634 to $915.
Although the average wage in Vietnam is about half of that in China, Samson Ko, chairman of the Hong Kong Toys Manufacturers Association, said less than 10% of…