Beanie Bubble
Sure, prices are insane--but how long can they last?
The staff of Poor Richard's, a gift shop in Doylestown, Pa., call them "the vultures"--the people who stampede their store, clawing over one another to seize as many Beanie Babies as they can. "Somehow they find out within five minutes that you get a shipment and they are here," says Emma Lukens, Poor Richard's office manager. "Then the kids come in with their crumpled dollar bills and fists full of coins, and they can't find the ones they want. It's a shame."
Beanies are everywhere--in card shops, nurseries, gas stations, even restaurants. They adorn office cubicles, dominate dinner conversations, and send parents on wild-goose chases for creatures with names like Fetch the golden retriever, Fortune the panda, and Stinger the scorpion.
But the Beanie phenomenon differs from toy fads of the past, like Cabbage Patch Kids and Tickle Me Elmo. Beanies, introduced as a children's toy in 1994, have spawned a huge secondary market in an ever growing line of collectibles. The older styles are the most coveted; Peanut the royal blue elephant in mint condition is said to be changing hands for over 1,000 times its original $5 price, and predators of plush are buying up as many Beanies as they can and reselling them at an enviable profit. "Beanie Babies are more than just a phenomenon--I've never seen anything like it in my 42 years in the toy business," says Russ Berrie, head of another firm that sells stuffed animals.
Behind the hysteria is a remarkable story of clever marketing by the toys' manufacturer and relentless hype by promoters of a vigorous secondary market, fueled by books, shows, Web sites, and magazines that tout Beanies' rapid ascent in value. But speculative bubbles finally burst--and the faster Beaniemania grows, experts say, the quicker the pop.
Beanies were born at a small, privately held toy company called Ty Inc. of Oakbrook, Ill. Ty's founder, Ty Warner, who doesn't speak to the press and declined requests for an interview, had several sure-fire marketing ideas. One was to sell Beanies through boutique outlets like gift shops and Hallmark card stores while avoiding big chains like Wal-Mart and Toys "R" Us where they might lose their cachet. A second was promotional tie-ins--giving out Beanies at sporting events and McDonald's (the so-called Teenie Beanies). But the masterstroke was Ty's decision to "retire" certain Beanies--discontinue their production--while periodically bringing out new versions. Almost instantly, prices for pre-owned Beanies skyrocketed as collectors, dealers, and speculators realized some would become a rarity.
Struck by the potential for profit, people started trying to guess which ones would be retired next. Others, fearful of missing out, started scooping up every Beanie that Ty makes, including new ones sitting on store shelves ("current," as they're described by fans). "People have gotten carried away," says Vicky Krupka, a contributor to the BeanieMom Netletter (www.beaniemom.com) Web site.
Ty's next move is sure to be a winner, too. Collectors are anxiously awaiting Clubby, the first direct-mail offering of the Beanie Babies Official Club. For about $10, collectors can buy a kit that allows them to join the club and send away for Clubby, a royal blue bear, for $5.99 plus shipping and handling. "Ty Warner wanted to make sure that despite the Beanie collecting frenzy that so much has been written about, kids would still have access to Clubby the bear at the basic price," says Patrick Brady, president of Cyrk, the Massachusetts-based promotions company that is handling the club.
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