Book Review: “The Great Beanie Baby Bubble”
Your broker thinks your portfolio needs more diversification.
Take a little out of metals, he says, put it into tech. Move money from here, put it there. Sell manufacturing, buy oil. You hope that’s sound advice but you’ve noticed that he never uttered a word about stuffed animals. That’s a good thing, as you’ll see in “The Great Beanie Baby Bubble” by Zac Bissonnette.
At the end of 1998, the “richest man in the American toy industry” threw a party for his employees, at which he handed out lavish bonuses and palm-sized bears stuffed with synthetic beans.
The man, Ty Warner, was the billionaire creator of Beanie Babies.
The bears, in coming weeks, were worth more than $5,000 each.
How did it happen that people lost their minds – and their childrens’ college funds – over stuffed animals? Zac Bissonnette tried to find out, but discovered that Warner grants few face-to-faces. Still, plenty of people were happy to fill in the blanks…
Warner got his start in toys when his father got him a job at Dakin, a premiere “plush” company; there, charm and a flirtatious manner quickly made Warner Dakin’s top salesman. When he was caught promoting his own line of plush on Dakin’s time, he lost his job but by then, he’d become obsessed with the animals he’d created. He constantly refined them, trying to understand how to make them a sensation.
That was only a matter of time. Says Bissonnette, “Warner understood things about toy sales that others didn’t,” pricing his Beanie Babies simply and at low-cost. That they became a fad with a handful of women in Chicago was a bonus.
Those women were fierce about Beanie Babies, and they called stores around the country, looking for hard-to-find animals and spreading the mania. Salesmen began referring to no-longer-stocked animals as “retired,” raising the perception of rarity. People realized they could “flip [stuffed animals] for two to five times” the original price. Word spread as “everyone who did it told everyone they knew about it.” Warner became a billionaire.
But as “people abandoned their senses” and the market became saturated by millions of plush on store shelves in the U.S., Canada, and England, the bubble burst. And, says author Zac Bissonnette, that’s still not the end of the story…
As someone who never bought one such toy, I found “The Great Beanie Baby Bubble” to be a fascinating study of the proverbial madness of crowds. From a what-were-we-thinking vantage point years removed from the loss of serious money in pursuit of toys, that’s amusing – but this well-researched and well-told story also serves as a cautionary tale: it’s happened before – as Bissonnette indicates, it’s perhaps no coincidence that Beanie Babies and the dot-com bubble burst at the same time – and it could happen again.
Pop-culture fans will find this book delightful. It’s a rib-poker for anyone who can admit to a boxful of beans still in the closet. And for businesspeople and marketers, “The Great Beanie Baby Bubble” totally pops.