Beanie Babies’ Marketing Worked Because of These 10 Hacks

In 1998, Beanie Babies’ Ty’s sales were over $1.3 billion. And, I’m not trolling you! So it’s definitely worth thinking about what those little bags of beans got right. Join along below as we explore the Beanie Babies marketing secrets that made this fun toy so successful⁠ — at least for a while.

Furthermore, now is a great time to look back at this nineties toy because everything is cyclical. In fact, the theory of Eternal return postulates that the universe and all existence and energy has been recurring. When you think about “tear-away pants” and tie-dye T-shirts making a come back this year, you’d probably agree.

Discover 10 Beanie Babies marketing secrets:

The best news is that some of these are very cheap marketing ideas, and easy to implement.

1. Use scarcity

Ty Warner, the creator of Beanie Babies, created limited edition animals, and would retire specific animals at whim. This created scarcity in the market and inspired collectors to pay up to $5,000 for a plush toy that originally retailed for $5. In fact, certain “retired” characters were going for as much as $13k on the resale market — 3,000x their original price.

Actionable takeaways:

  • Say “limited stock”
  • Retire products without warning
Certain “retired” Beanie Babies characters went for as much as $13k on the resale market — 3,000x their original price. Click To Tweet

2. Reach a mass-audience with a very specific product

84.6 million people in the US own a pet, making animals one main area of our lives that the most people have in common. That created a massive potential audience for Ty. Plus, animals are unisex, and appeal to people of all ages, further keeping the audience broad.

Rather than creating human toys or Beanie Baby houses, Warner kept to one core product to launch. And, for years after launch he kept the same size of toys. It wasn’t until much later some larger and smaller sizes were introduced.

Actionable takeaways:

  • Look at Google Trends, Facebook Interests, and more to identify a common interest of a large audience
  • Create a very specific solution (think four words “flexible, small animal toys”) for them

3. Build a simple brand

Don’t get hamstrung trying to develop a brilliant name. Just get started doing the work. Ty Warner used his name to get started, when creating “Ty”. Disney did the same thing.

Pick a memorable product name

“Beanie Babies” alliteration makes for a great product name because it’s memorable. Alliteration adds a textural complexity to speech, making it more engaging, moving, and memorable.

Make products feel personalized

Some of Ty’s first products were named “Legs the Frog, Squealer the Pig, Spot the Dog, Flash the Orca, Splash the Whale, and Chocolate the Moose”. Naming each of the Beanie Baby characters with one to three-word human names and descriptions of their species, made them more personable and relatable. And, it made them easy to remember and talk about as people recommended them to each other by word of mouth. There was also an element of surprise and delight that came from the personalization of seeing every animal’s birthday and unique poem.

Differentiate the product

In 1996, Warner told People magazine that “no one had tried the combination of under-stuffed with beans. All [other stuffed] animals were stiff and hard.” This would prove a crucial innovation, as Warner’s new posable toys, unlike most stuffed animals, could be made to “wave, dance and cuddle.”

Actionable takeaways:

  • Use your name to name your brand
  • Make your product names short and something you can say out loud to other people, with normal spelling so it’s easy to find when searched for
  • Create origin stories for your products, perhaps even in poem form
  • Emphasize the one thing that’s truly different about your product in its marketing by showing it

4. Use novelty in moderation

Warner introduced new animals at least each month, and he also frequently changed his product line, “always tinkering and always discontinuing old products, changing existing ones and adding new ones.” You can use novelty in your digital marketing to build a sense of newness that keeps people intrigued and coming back, but it only works if you don’t overwhelm them with tons of new things at once. There’s a reason you get only one piece of candy at every house when trick-or-treating! It’s just enough to keep you moving on.

Actionable takeaways:

  • Launch new campaigns and flash sales every month at sporadic times
  • Cycle through showcasing a new product on your homepage every few days
  • Put products “in the Disney Vault” by retiring them for periods before bringing them back

5. Create your own secondary market on re-sale sites

In the case of Beanie Babies, stories of people buying $5 under-stuffed plush toys and selling them a week after they retired for upwards of $40 were rampant. In fact, Beanie Babies were 10% of all eBay sales and when they filed with the SEC to go public, eBay was required to list Beanie Babies as a risk factor.

Beanie Babies were 10% of all eBay sales and when they filed with the SEC to go public, eBay was required to list Beanie Babies as a risk factor. Click To Tweet

The initial craze was sparked by a group of soccer moms in the suburbs of Chicago. Collector Peggy Gallagher was one of the first who established the re-sale market that exploded. She even wrote a price guide, and now admits she made the prices as she went along. 

But you don’t have to wait for someone else to establish your resale market, when you can set it up yourself.

Actionable takeaways:

  • List some of your products on eBay, StockX, GOAT, Amazon, and other re-sale markets at high prices, especially those that involve bidding to make demand look high
  • Pay influencers or authors to create a price guide book, a collectors magazine, and so on

6. Create distribution exclusivity

Warner created exclusivity for partners who could carry Ty products. Ty only sold to to mom-and-pop specialty and toy stores, which were more likely than chains such as Walmart to highlight his toys. He also limited the number each shop could purchase.

Warner was constantly approached by companies seeking to collaborate or co-brand and refused almost all, including five major television studios and Steven Spielberg.

Today, a lot of streetwear brands such as Kith employ this strategy.

Actionable takeaways:

  • Only create and publish content on certain social media channels
  • Offer your product to select retailers and limit the number they can purchase
  • Only release certain content to people who pay to subscribe

7. Price low to sell more: that’s a Beanie Babies marketing secret

Launch at an affordable low price and make money on high volume, if your product appeals to a large audience.

Beanie Babies were priced at just $5 a pop — making them accessible enough for anyone to get in on the trend. One way they were able to keep the costs down was by skipping the packaging. Due to increased demand for sustainable business practices, that strategy might be even better received today.

The one licensing agreement Ty did enter into was with McDonald’s, because Warner thought it could help introduce Beanie Babies to less-affluent people. The promotion was scheduled to last five weeks, but all 100 million toys were gone in two, with McDonald’s canceling all scheduled television advertising over worry that “massive crowds were putting employees’ safety in jeopardy.”

Actionable takeaways:

  • Pricing is one of the most powerful marketing levers your business has so revisit your pricing strategy yearly
  • If you’re not selling enough products, test bringing the price down
  • Partner with brands that have customers with a similar affinity for spending

8. Turn mistakes into magic

Many Beanie Babies were made with factory spelling or Tag errors. Here is a list of confirmed sales of errors that are known to exist.

“The most common error on a hang tag is on the front and back. The word “ORIGINAL” on the front of many early 5th generation hang tags read “ORIGIINAL” and the word “Surface” on the back of the hang tags read “Suface”. This mistake was common on Peace Bears, Blackie, Curly, Ears, Roary and several others.”

As a result of publishing information about these mistakes, Beanies with them saw their value sky-rocket, as they were part of a select group.

Actionable takeaways:

  • Create a “leaked” PR campaign around a mistake
  • Hide Easter eggs on your product labels
The most common error on a Beanie Baby hang tag is on the front & back. The word "ORIGINAL" on the front of many early 5th generation hang tags read "ORIGIINAL" & the word "Surface" on the back of the hangtags read "Suface". Click To Tweet

9. Create a culture of secrecy

Warner engineered an incredibly tight-lipped culture at Ty. For example, there was a “total information blackout” on things such as how many ‘Patti the Platypus’ toys would be sold, or which stores would carry ‘Baldy the Eagle.’

This created a certain mysticism around the product. Buyers could never find the whole collection in one place, and toys always seemed like they were sold out at each location.

Actionable takeaways:

  • Keep your FAQs vague
  • Don’t create a Help Center
  • Instead create a “Secret {Insert Company Name} Group” group on Facebook and seed it with all sorts of questions that throw people off the tracks

10. Build barriers to entry

If your product is easy to imitate, invest heavily in building barriers to entry to destroy the competition. Ty went aggressively after knockoff producers and summarily cut off supplies to retailers that undercut prices by running promotions such as buy five bears and get one free.

Cleverly, the toy giant did whatever it could to stem the tide of rule breaking, including urging children to report counterfeits online and registering its trademark with U.S. customs officials.

Actionable takeaways:

  • Encourage user-generated content to help keep your competitors at bay

Now that you know what marketing worked for Beanie Babies so long, let’s take a quick look at the steps that led to Beanies demise.

Why did the Beanie Babies market crash?

In short, Ty stopped following their own marketing principles.

In January 1999, Ty announced a series of retirements (good exclusivity), while also announcing the release of 24 new Beanie Babies that same day (novelty but not enough moderation).

This was the true beginning of the end, as the release overwhelmed collectors. Wholesale shipments fell by 20 percent versus the previous year, and Beanies were seen selling at flea markets for $3. Supply was finally eclipsing demand, and retired issues were suddenly easy to find on store shelves.

By early 2000, newly retired Beanie lines were selling three for $10, and by later that year, the toys were available in dollar stores nationwide (no distribution exclusivity). Sales declined by “more than 90%” in subsequent years.

Put Beanies Babies marketing secrets to use

Now you’re ready to use some of the tactics that worked so well for one of the hottest trends in the mid-nineties. Up next, check out new growth hacking marketing tricks.

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By Megan Mitzel

I'm the wearer of overalls behind the marketing advice website Marketing Overalls. I'm also a senior marketing director with more than ten years of experience leading acquisition and lifecycle marketing at successful startups. Before that, I got a business degree at UNC-Chapel Hill. Before that, I owned a seashell shop. And that's the tea on me.