A former City Hall staffer’s toy company is rewriting the rules of e-commerce in a Frankford warehouse

On a warm Monday afternoon in November, Alyssa Thomas opened the front door of her rowhouse in the Hawthorne neighborhood of South Philadelphia. Her two children weren’t home, but it was their delivery she was receiving. From a wheeled bin pulled by e-bike cyclist Blake Carroll emerged a stash of toys: Brain Flakes, rainbow-colored counting bears, and dominoes.

“It’s so much better than a big truck stopping by,” Thomas said. “There are a lot more smiles with this toy delivery.”

As she grabbed one bag of toys totaling $40.91, she handed another over to Carroll. Inside were a batch of toys, delivered weeks before, that Thomas’ kids — a 3-year-old son and a 6-year-old daughter — had already made short work of. Carroll packed the bag, hopped back on his bicycle, and started the three-mile return journey to a warehouse on Tackawanna Street in Northeast Philadelphia’s Frankford neighborhood.

On an unassuming block of cracked sidewalks and auto body shops, the warehouse stores thousands of toys. It’s run by Unless Kids, a company offering Philadelphia parents toys at a discounted rate using a business model focused on environmental sustainability. It takes cues from the circular economy, a model for retailers and consumers that prioritizes reusing goods to keep them out of landfills.

The company’s cofounder, Nic Esposito, said he wants to change the play habits of Philadelphia’s kids, then fully rewrite the rules of e-commerce. Esposito sees toys as a perfect use case: Kids grow out of toys at supersonic speed, but not before packing them with sentimental value that could give parents pause before sending them to a landfill. Yet the solution isn’t to start filling boxes with unused toys in a space-limited Philadelphia rowhouse.

“There’s something in people’s mindsets that they just feel awful about throwing this stuff out,” said Esposito. “We’re giving them an option to not do that.”

Instead, why not give the toy another life in the home of another family?

Incentive for parents to buy into his Unless Kids model comes in the form of discounts. Toys on the company’s site are marked down from their retail price in two ways: a flat discount for participating in a system that relies on customers to return the toy and a further markdown based on how worn the toy is. There are no return dates, and parents may keep the toy if they would like — Thomas, for example, is holding onto a toy fire truck her kids have lovingly nicknamed Puppy Hat — but must pay back the flat discount.

Once a child outgrows a toy, Carroll, one of Unless Kids’ cofounders, will cycle out to their house to retrieve it. Back at the warehouse, the toy gets some TLC and a new valuation based on its wear. (Unless Kids uses a more euphemistic rating system that calls distressed-but-usable toys well-loved.) The toy will be labeled and reappear on the Unless Kids e-commerce site before being repackaged into a tote bag and heading to its next home.

“We end up getting seven or eight uses out of this toy,” he said. That’s seven or eight times the toy avoided a trip to the landfill.

Once toys are too weathered to resell, Unless Kids will donate them to Circle Thrift in Kensington if they’re still good to play with. Products that can’t be sold head for Rabbit Recycling, another Kensington company that keeps hard-to-recycle goods out of landfills.

The Unless Kids model is similar to other prominent consumer brands without being exactly the same. Like Blockbuster or Rent the Runway, users return goods once they’re through with them — but products aren’t rentals. Like eBay, customers are likely to receive a toy that has had prior owners, but Unless Kids is handling sale, delivery, and return. Like a library, community is central to the ethos. But make no mistake, this is a business, seeking to profit from an opportunity in the consumer market.

Whether the Unless Kids model can achieve success remains an open question. The fledgling operation exists under Circa Systems — which Esposito hopes can anchor future circular economy-focused enterprises — and now employs five people, including Circa’s three cofounders: Carroll, Esposito, and Samantha Wittchen.

In similar consumer economies, such as France, entire sections of stores are devoted to selling used toys that have been repackaged and relabeled.

“That’s just not happening here in the U.S. market,” said Juli Lennett, a toy industry expert at Circana, a market research company. “I think we’re really behind the eight ball.”

That’s not for lack of want among parents. According to consumer polling in August by Circana, about half of 1,557 respondents said eco-friendly toys with less packaging were an important factor to their purchasing habits. The same survey found that 63% of respondents had donated their children’s toys and 45% bought one secondhand.

“There’s a lot of room for growth for the U.S. market in terms of sustainability,” Lennett said. “But we’re just not there yet.”

Unless Kids has sprung up to fill the gap. Even within Philadelphia, it’s not alone. Rutabaga Toy Library, a small storefront in East Falls, offers access to its toy inventory to subscribers for a monthly fee. The core tenets of the circular economy are evident on the company’s website: “We keep our toys out of your landfill and clutter out of your home.”

» READ MORE: FROM 2019: Philadelphia’s new toy library lets families save money — and the environment — while forming a community

According to Esposito, whether models like Unless Kids or Rutabaga’s can catch on relies on how convenient they can make their services to customers. The conviction comes not from his entrepreneurial experience, but from a rule Esposito learned during his 3½ years as zero waste and litter director under former Philadelphia Mayor Jim Kenney: the 10-10-80 rule.

Whether it’s a city policy or a product, about 10% of people will willingly adopt something. “They’re like, ‘I love that,’ Esposito said. “Then you got 10% of people that are gonna go out of their way to not do your thing.” Success lies in winning over the middle 80%, who are open to the idea, so long as it’s convenient.

“How do you kind of build for that?” he asks. The answer, he hopes, is the delivery system, the prices, the saved space.

Unless Kids is still in its infancy, having launched earlier this year. After a summer pilot program serving parents in a string of neighborhoods along the Delaware River, including Fishtown and Northern Liberties, the company expanded service to the whole city in October.

But user uptick is still to come. Right now, the company has about 30 regular customers. If the company can expand, it’ll start buying and stocking brand new products. For now, its inventory still relies on community contributions.

One Monday in November, Scott Purdy came to the warehouse with a little pink bicycle. Last year, his adult son and family moved from South Jersey to Florida. The bike was too big to take along, so Purdy offered to hold onto it. “He was just gonna put this out on the street,” he said.

Purdy’s little granddaughters have outgrown the bike — nearly new but condemned to his garage. “I’m trying to clean out,” he said. “So someday my own kids won’t come in and say, ‘What the hell’s this?’”