It might seem an unlikely place for an innovator in the toy retail industry, but Elkorn, Nebraska is where you will find the headquarters of Fat Brain Toys. Entering its eighth year of operations, the private company that started as an online retailer and entered the bricks-and-mortar realm with a 2,700-square-foot, 6000-SKU outlet two years ago, has been making a name for itself in the kids specialty area due in large part to its dogged pursuit of differentiation.

‘We are trying to stay a step to the left of everything that is available in the market,’ says co-founder Mark Carson.

Quality is Fat Brain’s guiding principle, according to Carson, who says that he’s had to make some hard choices by not stocking licensed product that currently fills shelves at mass-market retailers. ‘We are trying to find those products that have an inherent value in them,’ says Carson. ‘We’re not just relying on a character to sell the product.’

The overt anti-licensing stance seems to be working. Fat Brain reportedly does around US$10 million in annual sales, and its website has more than 800,000 registered customers. With a modest marketing and advertising budget focused on paid online searches, digital buys and organic search engine optimization, Fat Brain has developed a reputation in the toy business as the little firm that could.

‘We crossed a threshold two or three years ago where more people now search online for Fat Brain Toys rather than the products we sell,’ says Carson.

With 29 different categories of SKUs, Fat Brain has moved away from its initial boy-centric, building toy-bent to offer a wide range of apparel, softlines, electronics, plush and décor. While there are no concrete plans to open more physical locations, Carson says it is something the company is considering doing over the next two years.

Hitting the major toy show circuit, including New York Toy Fair and ASTRA, Carson says he is always on the lookout for innovative new products that would serve his core customer. As Fat Brain’s reputation grows, he is fielding an increasing number of pitches from toy inventors looking for a breakthrough outlet.