Remember when retailers were stalked by shoppers waiting outside their back doors for the UPS truck? Now, Beanie Babies are selling for a buck ninety-nine at Osco Drugs. We dove though the bin for old times sake. There was the blue Princess Diana bear that once sold for hundreds of dollars, the bull with the red feet no one could get when the Chicago Bulls kept on winning the NBA play-offs, and a bunch more Beanies people all over the US coveted, thinking those little stuffed toys might one day pay for their kid's college education.
During the Beanie Baby heyday, we were giving the keynote at a hardware show when suddenly attendees began to get up an leave the room. Geez, was it something we said? Nope. The gift shop had just received a new shipment of Beanie Babies and everyone needed their fix.
Around 1995 we saw nearly 150 shoppers lined up outside a Hallmark store waiting for it to open. When the retailer opened the door all hell broke loose. Fascinated, we hung around to watch shoppers fighting over the tiny stuffed animals. Then we called a handful of retailers and told them about the circus we'd just witnessed. One of those retailers jumped on the Beanie bandwagon and was able to turn his Beanie Baby profits into a very expensive college education for his child, and had enough left over to pay cash for a fancy vacation condo. Yep, Beanie Babies were a good thing.
And then in 1999 Ty, Inc. decided to stop making Beanies. Not such a smart move. Consumer demand made the company change its mind, however, but the damage had been done. That's why today you can find them in a dump bin at Osco for $1.99.
Hindsight is a beautiful thing, isn't it?
Today Crocs and Webkinz come to mind. What happens when today's hot items become yesterday's news? Too many Beanie Baby retailers rode the profit wave, but didn't have a back-up plan. They were SOL when that equity stream dried up. The moral of this retail story is this: when you are selling something like hotcakes, and much of your sales rely on this particular item, make sure you keep your eyes open for what's next. Because the question isn't IF demand will stop; the questions is WHEN. And you need to be prepared.