Hottest Squinkies Toys 2010: Cheap, Collectible, This Year’s Best Toy

With the help of “mommy bloggers” and a tepid economy, Mr. Nichols turned the squishy toys, named Squinkies, into a fad. Walmart.com has been sold out of them for more than a week, and stores nationwide are sold out or limiting how many Squinkies each person can buy.

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Children cannot seem to resist scooping up the latest toys, which come in plastic bubbles, as a vending machine would dispense, or pronouncing the Squinkies name with glee.

Mr. Nichols’s toy story has defied the odds at a tough time for small manufacturers. His company, Blip Toys, is a 16-person operation in Minnetonka, Minn. It faces competition from giants like Mattel and Hasbro with multimillion-dollar advertising budgets. Big retailers, like Toys “R” Us, Target and Wal-Mart, all want exclusive toys to offer. Independent retailers who might take a chance on smaller manufacturers have all but disappeared.

Squinkies are sold out or on back order at many stores, and Mr. Nichols is busily expanding the line, with sets for boys based on characters like Spider-Man and new dolls based on Barbie and Hello Kitty.

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Mr. Nichols began by walking through stores, finding an opening in what’s known as the small-doll aisle, where My Little Pony and Littlest Pet Shop had reigned for years. “All of those brands have been there for a long time, and there’s not a lot of innovation,” he said.

In the eight years since he founded Blip Toys, Mr. Nichols has had enough success with novelty items that he can get meetings with Target, Toys “R” Us and Wal-Mart. From Wal-Mart, he heard that vending-machine concepts were popular in its Japanese division, Seiyu.

Kids can also buy play sets, like one that resembles a gumball machine, and insert plastic coins to dispense Squinkies. “Kids are seeing this every day, when they’re walking into every mall they go to,” he said. “There’s no learning curve.”

3. Squinkies Production with China Manufacturers - Hottest Squinkies Toys

Mr. Nichols presented his ideas to the three major toy retailers last December. Rather than having a toy sculptor create samples, he had a factory in China produce and spray-paint the dolls, to prove that this could be done at a low price. Asked if Wal-Mart executives thought it could be done well at the small scale, “we didn’t,” said Ms. Phillips, the Wal-Mart executive in charge of toys. “But he really worked hard on the execution.”

The retailers liked the Squinkies well enough. “The orders were good, but nothing like what we anticipated this could be,” Mr. Nichols said.

He knew the retailers would test it in August. To pique interest before Squinkies were even on sale anywhere, he reached out to more than 300 bloggers, sending them products for review and giveaways.

Tips: Like Beanie Babies or Zhu Zhu Pets, the toys are collectible — the hundreds of characters include a Lhasa apso dog and a tiny bride — but they are much cheaper, selling for $10 for a 16-pack.