The Beanie Babies Bubble
© Kevin Horan/Corbis
Nothing says “Destined to hold its value indefinitely” quite like a teddy bear stuffed with plastic pellets. Or so collectors thought in the late 1990s, when Beanie Babies, the plush stuffed animal brainchild of Ty Inc. founder Ty Warner, were sweeping the national collecting market. But what made these little stuffed critters a billion-dollar industry that sucked in both children and adults?
A number of factors contributed to the beanbags’ meteoric rise as collectibles. Ty’s brass originally envisioned the product line as a set of inexpensive, high-quality stuffed animals that kids could afford. Prices were generally around $5, low enough that kids could get the whole set of Beanies. Ty eschewed normal distribution chains for stuffed animals; the company avoided big chain discount retailers in favor of smaller gift-shop type outlets, a decision that made the product seem classier and rare.
Moreover, the Beanie Babies themselves received constant tweaks. Colors or names changed, their trademark ear tags would be subtly redesigned, and, most importantly, Ty retired certain models, further spiking collector demand.
As you may remember, the secondary market for the toys absolutely exploded. By 1996, Beanies had graduated from kids’ fad to full-blown collecting craze. It seemed that almost any Beanie could conceivably become the next hot limited edition, so collectors snapped them up as soon as they hit store shelves. A royal blue Peanut the Elephant, which was only produced in limited quantities for a short time in 1995, could sell for over $3,000. Other individual Beanies, like a wingless Quackers the Duck, fetched prices well over $1,000 apiece. The good times were never going to stop rolling, and Beanie Babies seemed poised to replace the less-adorable dollar as the nation’s currency.
That is, until the good times promptly stopped rolling.
By 1999, the craze had started to lose steam. Most of the newer toys hadn’t appreciated like their predecessors, possibly because the market was so flooded with bean-filled animals. (Ty’s revenues had ballooned to over $1 billion, which represents an awful lot of stuffed bears flowing into collectors’ hands.) In 1999, Ty announced it was completely retiring the entire Beanie line, and although a fan outcry convinced the company to revive the line in 2000, the hysteria was dead.
Certain rare Beanies still have significant value, but they’re far below their heady late-90s peaks. Peanut the Elephant seems to be bravely soldiering on; examples of his royal blue variant have pulled in four-figures on eBay in recent years. These examples are exceptions, though; the great bulk of speculative Beanie purchases seem to be worth a few bucks at most.