Anyone of a certain age in the mid to late 1990’s knows all about the crazy fad called Beanie Babies. These small beanbag-type plush animals were sought after by children and their parents in obsessive fashion. At one point during the height of their popularity, one of the “rare” toys sold for $10,000 and the online Beanie Baby resale industry made up a whopping 10% of all of eBay’s (EBAY) business.
New York Times bestselling author Zac Bissonnette took a closer look at the phenomenon in a new book entitled, “The Great Beanie Baby Bubble.”
To understand the craze you must first understand the man behind it, toymaker tycoon, Ty Warner. Bissonnette says Warner started his toy company, called Ty, in his condo, and through some unique design and marketing techniques turned Beanie Babies into a cultural phenomenon.
“He would change pieces after they’d been released because he had this sort of compulsive desire to make them absolutely perfect,” Bissonnette says. That practice resulted in some truly rare Beanie Babies like Peanut the Royal Blue Elephant. After shipping some of that particular toy, Warner decided light blue made for a better elephant and the royal blue hue became perhaps the most sought after of the rare toys.
“The second thing that [Warner] did that was so unusual... he refused to sell to any big box chain stores. He wanted his pieces to have this kind of exclusivity to be sold through small mom and pop gift shops and he would only sell them 36 of each style per month.”
Store owners would camp out at Warner's office begging for more, but he would refuse to increase their order. Suburban parents would wait outside these small gift shops across the country waiting for a fresh delivery.
Warner “had this idea to kind of limit the supply and once the demand picked up it created this huge run up,” Bissonnette says.
The fad started with a group of suburban moms near Chicago. Their goal, Bissonnette says, was to obtain a complete set of the toys. They called stores from coast to coast and in doing so began to discover which Beanie Babies were the rarest and would snap them up. Interest grew from there.
In researching the book, Bissonnette found some incredible stories of Beanie Baby mania, including a West Virginia man who was convicted of murdering a co-worker over Beanie Baby debt. Bissonnette also tells the story of a soap opera star who zeroed out his son's six figure college fund “investing” in the toys.
Beanie Babies didn't pan out as an investment vehicle, but they are still for sale.
So whatever became of old Ty Warner? He got rich, really rich: $2 billion and the richest-man-in-the-history-of-the-American-toy-industry rich. He owns the Four Seasons hotels in New York and Santa Barbara, and decided to put some of his other cash in a Swiss bank account.
The problem is he never told anyone about that and ended up the defendant in “the largest swiss bank tax evasion case in U.S. history,” according to Bissonnette.
Bissonnette says Warner remains a free man as the case goes through the appeals process but there is still a chance the man behind Buzzie the Bee, Patti the Platypus and Quackers the Duck could end up behind bars.
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