Episode #41: From Mail Order to Mega Trends: Revolutionizing Toys with David Socha
In this episode of U.S. Manufacturing Today, host Matt Horine chats with David Socha, CEO of the Beverly Hills Teddy Bear Company. David shares his journey into the toy and collectibles business, starting from his childhood love for toys and progressing through his entrepreneurial ventures. They discuss the company's commitment to quality, craftsmanship, and ethical manufacturing. David also provides his perspective on the challenges and trends in the toy manufacturing industry, including the impact of globalization, the shift towards customization, and the importance of maintaining high safety standards. The conversation delves into the role of creativity in manufacturing and the potential of automation and AI to improve the industry. David concludes by sharing his optimistic vision for the future of US consumer goods manufacturing and the evolution of his company. Listeners can learn more about Beverly Hills Teddy Bear Company at plush.com.
Links
- David Socha on LinkedIn
- Plush Website
- Navigating Trump 2.0
- Veryable Is Revitalizing U.S. Manufacturing
- Sign Up on the Veryable Platform
- Veryable Shop
Timestamps
- 00:00 Introduction and Guest Welcome
- 00:46 David Socha's Journey into the Toy Industry
- 02:22 Building a Legacy in Toy Manufacturing
- 03:58 Challenges and Trends in US Manufacturing
- 07:13 Globalization and Manufacturing Realities
- 10:17 Adapting to Market Changes and Trends
- 21:10 Balancing Creativity and Efficiency
- 22:44 Future of Toy Manufacturing
- 24:34 Optimism for U.S. Manufacturing
- 26:36 Conclusion and Contact Information
Episode Transcript
Matt Horine: [00:00:00] Welcome back to US Manufacturing today. The podcast powered by Veryable where we talk with the leaders, innovators, and change makers, shaping the future of American industry, along with providing regular updates on the state of manufacturing, the changing landscape policies, and more.
Today we're joined by David Socha, CEO of the Beverly Hills Teddy Bear Company, and name. Many listeners may not know, but a product line. Millions of Americans absolutely do. For more than 30 years, David and his team have blended craftsmanship, creativity, safety, and ethical manufacturing to bring toys, plush, and collectibles to life for partners across the US and the world.
David, welcome to US Manufacturing today.
David Socha: Thank you, Matt. I couldn't have said it better.
Matt Horine: Great. I always like when we lead with a strong intro, so we're very excited to have you on the show and we can jump right into it. I, if you could, you start by giving listeners your background. How did you find your way into the toy and collectibles business?
David Socha: Yeah. Yeah. As a kid, I loved toys and I was a toy junkie from a very young age, from GI Joe [00:01:00] to King Kong, whatever the toy was, I loved it. And fortuitously, my dad opened a toy store when I was about eight years old. I actually worked in the toy store for three years while it was open. Then unfortunately, big recession hit in what, 1980.
He had to go outta business, but I don't know, just got a real love for toys and passion about it. That was my first touch into it. And then I did an internship at a family gift company in Los Angeles for about a year, and probably deepened my love and passion for toys and just things that put a smile on kids' faces.
When my roommate and I, when our hockey careers went a bust, we said, you know what? Let's start a mail order company with toys. So we started a company where we bought teddy bears, dressed teddy bears in our apartment in Los Angeles. If you want to send one to your girlfriend who is a nurse or whatever it [00:02:00] might be, we would customize them and that's really how it all kicked off was starting with a mail order company doing one at a time.
Matt Horine: Wow. One at a time. That's a little bit different. Built from the ground up versus the fast pace we see with e-commerce brands or even like vast fashion type stuff today. Really a testament to building businesses the old fashioned way and doing that with that passion for sure. For those people who may not know the company by name, what do you produce today and what sets your approach apart?
David Socha: I think more recently we've taken more of a hundred year view of our company to really try and create legacy brands. So what really sets us apart, and I've had some great mentors, I wish I could say I learned this all myself, but I've had tremendous mentors that have taught me creative sourcing and just true.
Business wisdom, which I'm still trying to gain a lot more of. But we just try to do things a little better. And I think that's, there's [00:03:00] terms like Kaizen and all these terms where never settle for good, always just keep striving to make it better. So we do that really with all of our products. And sometimes people say, what?
Why did you go the extra? You could have made it cheaper. It's just not who we are. We're not, I'm trying not to make landfill. I'm trying to make. Toys that'll be in the, that could be in the toy box for 50 years and pull it out 50 years later, and it's still there. That, that's really in a small nutshell, what I think sets us apart is we try to do things a little better.
Matt Horine: Yeah. What you said there caught my attention because when you step back from modern day. My family has, I've got a 3-year-old and we've got a bunch of nieces and nephews. There's a lot of toys, there's a lot of things going on, but some of them stand out and the manufacturing process behind that probably has a lot to do with bundling it with, they're personal, they make memories, and that responsibility probably shows up in the way that you lead and manufacture.
So that makes a lot of sense. Speaking of the [00:04:00] manufacturing, turning to that manufacturing and. What's going on in the bigger world right now? Toys Plus all those things are one of the most globalized consumer categories, yet there's growing interest in some US-based production. What are you seeing out there and what are some of the kind of trends that you fought through over the past, past year as the market changes have interrupted?
Business as usual?
David Socha: Yeah. Obviously tariffs have played a key role in all of that, and I believe, and I'm probably gonna make some haters here, I do believe tariffs have a place. Because we're being tariffed and charged from other countries. I think toys is a difficult one because we're conditioned to pay certain prices for products.
And if I drill it down just to my plush toy business, there's I believe one maker left in America in Vermont. And which is a Vermont teddy bear company. I know the owner, great people, and [00:05:00] there's some other people who finish off the stuffing in America. The difficulty is if we wanted to try and make in the USA and I have, I visited the biggest G seven factory about eight months ago.
Tremendous, unbelievable. And we tried working with them to figure out is there a way. To cut and sew stuffed animals in America, and the quality that we are used to at the price we're used to is an impossible dream at the moment. The infrastructure that other countries have and. Probably in this order.
China's number one, Indo or Vietnam is number two. Then you get down to Philippines and maybe Mexico. These are all places with pretty large workforces that are willing to do cut and sew product in America. This new, the new generation wants tech jobs, right? They want to be working [00:06:00] for, no offense, apple or Samsung or someone like that, or Amazon.
Where it's very techie and we don't have, I think kids or this next generation wanting to work in a factory cutting and sewing garments or cutting and sewing stuffed animals. The beauty of it is that, and my friend who he actually, when I first started the company, he said, the good news is you're manufacturing in Asia, but 80% of the GDP stays in America.
And it's very true because. We design, we have a team here that does all the design work, all the art, then we contract manufacture, and then we import it, and then we sell it, wholesale it or retail it. And on average, 80% of the GDP stays in the USA between salaries, shipping, the sale of the good at a Hallmark store, wherever it might be.
So I think that's the part that's really hard to understand. For products [00:07:00] like this, because the majority of our products sell for under $30 and to bring manufacturing to the us, you're looking at multiples hourly wage because the cost of living is just so much greater here. And you know what a lot of people don't understand is, oh, you're working in China.
The people are treated so poorly and they're not the majority. All of our factories, the majority, the employees dorm at the factory. They get two meals a day that are paid for. They can go off for the third meal and they get a doctor care. So they save up their earnings, their wages, and then they send them home.
And then when they go home for Chinese New Year, I'll just, I'll pick on China for a minute. They go home for Chinese New Year. They bring their money home and help support their family and the younger kids who are in the house. So really, China is us 150 years. 120 years ago, right? We, you see these pictures of.
Kids working on the [00:08:00] railroad when they were six years old. China's not that, I think the working age in China, I think you have to be 15 if you are 14 or 15 if you're related to the factory owner and 16. If not, it's a, it's a really interesting, and it's gonna sound, I know the name of your podcast, but the, I love my Chinese partners.
Some of 'em are, have become dear friends over the years and they. Love America. Love America. When they go on vacation, they wanna come to America.
Matt Horine: The one thing that we highlight often on the show is that there's a lot of nuance to this in the trade environment, right? And then sometimes too far one direction or the other, non partisanly.
You look at it through a version of, we want to bring everything back. It's okay. What is the next logical step? The infrastructure, the energy usage. We get a lot of notes about how much the energy grid has to be impacted to support that kind of manufacturing. And at some level, China, the way that globalization has shifted is it's not China of 30 years ago.
In a lot of ways, [00:09:00] labor has become a lot more expensive in China and other places because it's caught up. That industrial base caught up. And you look at it, I've, I, that's a really great way of framing it. 80% of the GDP is staying in the country. That's a big component. That's real. We, we talk to a lot of companies that they're fighting just labor arbitrage from the top down.
It's like completely offshore. There's nothing going on. And then it hits the dock and then all the money is ne never absorbed into the American economy. It's the American consumer paying out nothing. There's layers to this and there, there are certainly levels to understanding that and we, we want people making things.
We're a proponent of manufacturers. And one thing that you did say that's very interesting is if you look at textiles, and I think the stats on this were something like it's flipped from 97% of our garments were made in the US in the sixties. Now it's three. It's a complete inversion of that type of thing.
It's because the productivity never caught up. Now people who are looking at making those types of changes, even if they did bring that back, it's basically one job headcount for what used to be 10, [00:10:00] and that's the nature of the world. That's industrialization. That is how things happen over the course of decades and even centuries.
It's a real productivity question, and I think you framed it really nicely there. The other thing that your market very specifically encounters, there's obvious, this applies to everybody, but I think specifically with toys. And plus and anything else is the pace of play kind of trends that changed dramatically?
You see more engagement maybe on TikTok now, or fan communities that organize or licensing cycles speed up. How have you guys kept up with the pace? Because it seems like you, you started 30 years ago, I'm sure that environment has changed and how do you engage with this new world?
David Socha: And when I look back at some of my biggest customers in the nineties, it was blockbuster video.
They were huge and the lifecycle of a movie. A movie would come out if it hit Blockbuster, would want product by the time the video hit the shelf, and then you'd have a long run. Now, the time from Movie to on demand [00:11:00] is very little, and we're not selling near the DVDs that we were obviously, because all of our videos are within Amazon Prime, right, or whatever it might be.
So the lifecycle for licenses is really fickle and really interesting. There's some crazy licenses and from SC toilet to things like that, that to an adult, you're like, how in the world is this ever anything? But it became a sensation on YouTube or TikTok, and it translates to a kid's toy for a certain amount of time.
Then you have these mega influencers, right? Like Mr. Beast or Dude Perfect. Or whoever it might be. So there's completely different collaborations that would've always been with an athlete before someone, Michael Jordan or someone like that. Now you have guys who shoot trick shots like Dude, perfect, who are [00:12:00] wonderful, family friendly, that have a massive following.
It doesn't follow the traditional way of the world of how consumer products, what they're driven by anymore. Now they're driven by an influencer, not an athlete, not an actor. These are just YouTubers. Right. And I guess they are entertainment, but yeah. So it's become a very difficult world in terms of it's split up and spliced with so many different ips out there.
Matt Horine: Yeah, that's a really. Interesting way to to frame it. You had hit the nostalgic button there for me when you mentioned blockbuster video and like the hive around Jordan and those types of things. I obviously, I grew up in the nineties, so all of those things made sense. We should bring Blockbuster back.
By the way, that should be something that should be on someone's agenda. There's one store
David Socha: left, I think. I think there's one store left in the northwest. No kidding is what I've heard. No
Matt Horine: kidding. That would be, yeah. Man, they could relaunch that and I think they'd have a fast following and cult following.
But you did mention a couple things, [00:13:00] and I might be aging myself here, but I heard a stat at some point that a certain percentage of kids were asked what they wanted to be when they grew up. And a lot of them answered Famous or like a YouTuber. And it's just, it's such a different mentality than like a traditional profession, and you've seen people become famous, and that's obviously a huge dynamic to balance.
Especially in your market, because when you look at that, how do you balance the classic Evergreen products, right? Like your core products against those newer micro trend type collectibles or those types of things?
David Socha: We've had a lot of licenses over the past, and as of late, I'll say the last five years we've really pulled back from licensing.
We do have a couple of licenses that are, I believe are up and coming, but we've really tried to. Create brands that have evergreen appeal, and I think with the way technology and things are pulling us [00:14:00] away from people and kids, I don't know. When I grew up, I was outside all the time, playing with my friends, fighting with my friends, whatever it was, right?
You're interacting now. A lot of kids are behind a screen, but. I think human nature, we still seek that companionship and fortunately or unfortunately, stuffed animals has become a huge super category because I believe it's aging up where little kids were with stuffed animals when they slept. Now I think it's all ages.
I can't tell you the amount of people I see on airplanes that are under their twenties and thirties holding a stuffed animal. And it might only be a clip-on, but a lot of people use it as a pillow. I believe it's that nurturing aspect of, okay, I don't have 10 best friends. I talk to my friend and I play video games with them virtually, but who do I have companionship with?
So. We've looked at toys in that framework, so hopefully that answered your question.
Matt Horine: No, absolutely. I I think you've [00:15:00] also teed something else up there. Do you think this is a general business question, does the longevity you've had in the market at this point now give you the advantage, or does it create a pressure to constantly reinvent?
Because I think that's a really serious challenge of, it's very fast paced now, but you've got the longevity, you've got the core product or the classic evergreen. What's the advantage and what is the pressure?
David Socha: The pressure is there's always something new. Almost every year there's a mega trend. Every two years, there's a mega trend that hits and it takes shelf space no matter what your legacy might be, because if that brand is selling crazy, squish malos have been a massive hit over the last five years.
Massive, and they've done an amazing job of. Growing that brand from a generic brand to now they have every license from Star Wars to Mickey Mouse to Harry Potter, and they've expanded shelf space. So the pressure is you still have to [00:16:00] have some unique and trendy items. Hence, we've started a trend division where these products may only last 24 months, 18 months, but it fills that need of.
What's hot, what's popular now, and trying to find the next trend or product that can help you kind of balance, balance your company out. We really try to have at least three pillars to our company, direct to consumer. Licensing with other people's product. Then we have our trend division, then we have our classic, which world softest and other brands fall into because they're not all gonna hit every year.
Matt Horine: Yeah. There's a little bit of inner mixed volatility there with uh, maybe something is not as big of a trend one year as another. How do you design for fans versus a traditional retail buyer? 'cause it sounds like within those pillars. You might be looking to a traditional retail buyer that's looking for something highly customized, or you may be looking to a traditional buyer.
Is there [00:17:00] a big split or thought on that?
David Socha: I think you're alluding to this whole kiddo area, which goes from a 50-year-old down to a 10-year-old who's gonna collect something. So it's really finding, in terms of that, finding the product or product category, is it a luggage tag? Is it a stuffed animal? Is it a figurine that fits that license?
So that's on more of the fandom side, I'll call it, where you're really trying to match who's really the fan. Is it a 30-year-old or is it a 12-year-old? And what's popular? And then in, in the basic, I'll call it stuffed animal world of basic dogs, cats, ax, lots, capias, whatever the hot animal is of the time, we just try to make it.
So that it'll appeal. The whole cliche thing is from anyone one to 99, right? Make a product that if a grandma picks it up or a little kid picks it up, they say, wow, [00:18:00] this is very nice and very high quality. So those are the two dynamics and they're, they do crossover because you might have the same people buying both, but the fandom is very specific.
To the fan of that license.
Matt Horine: That makes a lot of sense. One thing that you said about there is the quality can be felt, whether it's the 10-year-old or the 30-year-old or the grandmother buying the gift or something like that. Sometimes you see a mismatch in that grandparents are buying for kids and hit or miss, and if it's a quality item or a quality toy and made that way, then it probably has the appeal.
You'll be picked up by anybody, which is a pretty unique challenge in your space because if we're making cars, that's, there's a target market, right? That's not something that, that is that level of detailed customization for that wide of an age group. One other question on that, because that does imply a level of customization.
You alluded to your team that does all the design work. Where have you guys, this [00:19:00] over the past year looked at. This is something that is very specific to the toy manufacturing faces. Some of the strictest safety and compliance standards, right? In any consumer goods, just because of the nature and I, I think often to the age limit on the box kind of thing.
And I jokingly refer to the Lego up to age 99. It's a great joke about cutting, cutting the Legos off at age 100. But how does that shape operations? 'cause that's, that's something that stays true no matter what the environment, whether you're making it offshore nearshore in the USA, that's probably something that's pretty complex.
David Socha: It is. And I think that's where it really helps to have experienced people within QC internally. But then on the flip side, finding a lab that, whether it's, and I won't mention names 'cause we use a couple different ones, but finding a, a testing lab that you trust but also that collaborates with you and they say, this doesn't work, but if you did this, it would work.
So having [00:20:00] them in on the. Not the creative process, but the finishing process to make sure that we are compliant and toys with the C-P-S-I-A you, everything has to be up to standard in terms of materials, craftsmanship, pull tests, especially for plush. So it is, it's a complex process. That's why I would suggest anyone looking into anything manufacturing is to find a great, find great partners wherever they are, whether they're in the US or Asia or wherever.
Make sure that they're great partners and understand. Everything that's needed when they manufacture your product.
Matt Horine: And that is absolutely true. I've dealt with some testing in past contract manufacturers or with just manufacturing in general. It can be hard because sometimes they don't, they are regulatory or preparing you for regulatory, but at times it sits on the dock.
If you get something [00:21:00] UL tested or something like that, you gotta get the feedback into your design process, and that's something a lot of manufacturers face challenges with. You did allude to something there that was. Pretty interesting as part of the process. Toy manufacturing specifically is a rare mix of, of artistry and process.
How do you protect the creativity while running efficient operations? Because some folks don't see like a lot of creativity or room for creativity in manufacturing, and this is something that your industry does uniquely.
David Socha: Yeah. My favorite thing is creating product. So we have, usually we have two brainstorm sessions a week or creative calls a week to always add into our line, create a new line.
Or at least start to ideate something we could come up with. But it is, it is a race, right? Where people are like, oh, how you guys must be so busy now and they don't understand. I'm busy now for 20, for Christmas, 2026 because the major retailers and the major partners, they're making decisions [00:22:00] almost before this Christmas is over.
They're, most of their plans are laid, so unless they're, unless there's an item that bombs this Christmas and they'll drop it off, they're so far out. So yes, the creativity, you have to be fast. And there's, everybody has their own look, right? And the look is in the eye of the beholder. Make sure you have a great creative team.
If, if anyone's listening out there who wants to start a company, make sure you have a great creative team.
Matt Horine: Makes a lot of sense. I think it's something that doesn't get enough credit because creativity and manufacturing go hand in hand, right? Whether it's toys or anything else. A lot of people don't see that.
They see it as like this process driven thing that's step one through 10. The creativity behind it is actually what drives the manufacturing and the making of it, which is what makes it really exciting. Turning now to like the look ahead and on the horizon, if you look out five to 10 years from now, what do you think toy and plus manufacturing will look like?
Any big changes or just you see this kind of trend building, or what does it look like over the next decade?
David Socha: I [00:23:00] definitely see the trend continuing to be a super category. What we call it in toys is plush is a super category. It's a $10 billion category around the world, I think. But it's more than that because there's promotions that don't get counted in there and things like that.
I think there's a turn to more customization for sure, which we're doing more of where you can make one of a kind. So if God forbid, your pet dies or you want a replic of your pet, I think there's gonna be a lot more companies doing that. We're currently doing that. So customization, I think people are gonna expect better quality just across the board, just with manufacturing and the way we can do things now.
And I've seen it just in my time over the last 30 years in plush even how we sew the product or how we cut the product and [00:24:00] make the pattern. It's different. It's all laser cut now. It's all very precise. So I think, and I hope the bar continues to be raised and that the consumer will have great products for their kids or for themselves, right?
So I do see the trend continuing and I see the quality bar being raised. I see more customization coming.
Matt Horine: It's the ever increasing trend of customization and fast delivery time. Like we call it the Amazon effect. We see it, the industrial pace all the time with folks pushing for that. So that makes a lot of sense.
What makes you optimistic about the future of US consumer goods manufacturing? It's, there's a lot to look forward to. I think customization, big part of that. Um, but it seems like there's a lot of room for growth and a lot of room for kind of adapting to the market. What's, what makes you the most optimistic about it?
David Socha: For the US really, I think you touched on it earlier, is the whole automation of things. 'cause I follow a lot of manufacturing companies from candy to [00:25:00] garments. I visited that G seven factory and the machines they have that do the majority of the work. You still need people to work the machines and bug out the machines and things like that.
But I think that's the optimism for the US is to embrace the automation. Embrace ai. Truly. I know AI's kind of a curse word these days, but I saw a futurist and he said, if we can just embrace ai, it'll raise the standard for everybody. And when he said standard, he meant standard of living. So it's how do we do that and how do we do it smartly and as a society, especially in the us 'cause it's gonna go, it's going crazy.
Look at Nvidia, look at all these companies who are making it. How do we make it better for us? Obviously the obvious one's, farming and things like that, but that's, that's my optimism, is I hope we can embrace the technology and the AI and use it for good and use it to. Help the [00:26:00] people on the margins truly who are barely making it by.
I hope it raises the bar that it's not raised the bar. Raise the standard for them.
Matt Horine: No, that's extremely optimistic. I think it's, we get this recurring theme and this drumbeat all the time about the doom of ai and it's, I guess it could have the potential, right? But everywhere we're seeing it, it's enhancing people's quality of life in that regards to.
Their daily life. They can make more informed decisions or help with menial on the fringe tasks that make them more productive as an employee, as a person, as a consumer, whatever role they're playing. Very good. Optimistic framing there. What's next for your company and where can our listeners go to find out more about Beverly Hills Teddy Bear Company?
David Socha: We're gonna continue to push the envelope to try and be better in everything we do. Push the quality standards and the design. And we just try to do it different. We'll expand our manufacturing. We'll continue to see if there's a way that we can find a factory on this side of the ocean [00:27:00] that that makes sense.
And yeah, you can find us. Our main website is plush.com. We have a couple other sub-brands called customplush.com and custom stuffed animals. plush.com will get you anywhere you need to be for our company and really grateful for the time today, Matt.
Matt Horine: Yes, I am as well. Great insights too. This is something that we don't get the chance to talk about.
It's something that's in everybody's everyday life and it's very nostalgic. By the way. Talking through some of this makes me think back to childhood toys and now you think about it as an adult. Where were they made? How were they made, and why are they still around? We kick 'em around from grandparents' house.
Now we've got things that are. Have been around for 30, 40 years, to your point, and nobody can seem to donate it or get rid of it.
David Socha: That's the unique thing about stuffed animals. People say, why should I get a stuffed animal if I'm doing a promotion? And I said, because no one will ever throw it out. Someone will own it.
Either they'll own it or they'll donate it, but it never gets thrown out unless obviously it gets soiled or something like that. But that's the beauty of stuffed animals. It takes on a living, [00:28:00] breathing friend.
Matt Horine: Well said. Thank you again for your insights and we really enjoyed having you on today.
David Socha: Thank you.
Matt Horine: Alright to stay ahead of the curve and to help plan your strategy, please check out our [00:26:00] website at www.veryableops.com and under the resources section titled Trump 2.0, where you can see the framework around upcoming policies and how it will impact you and your business. If you're on socials, give us a follow on LinkedIn, X, formerly Twitter, and Instagram. And if you're enjoying the podcast, please feel free to follow the show on Apple Podcasts, Spotify, or YouTube, and leave us a rating and don't forget to subscribe. Thank you again for joining us and learning more about how you can make your way.