Business success can often be attributed to being in the right place at the right time. I love the quote when preparation meets opportunity because it’s about being ready as much as it’s about being there when it’s about to happen. Investing is the same; being in the right place when it’s about to happen means you pay less for your investments and make more profits. I remember the story of eBay and Beanie Babies when I think of being in the right place at the right time. eBay was the perfect company ready to reap the rewards of the Beanie Babies craze in the 1990s and early 2000s. Companies in a position to support eBay’s growth made a lot of money during that time. Can you find the clues for what the next big opportunity will be?
Every internet business was picking up speed in the late 1990s, and it was a time of extreme growth, endless possibilities, and erratic investment crazes. The masses were investing way more money than they should have into ideas, potential, and strange collector’s items. The clever Ty Toy company became one of these crazes.
Ty Beanie Babies were first manufactured in 1994. Ty had an interesting approach; he would release a series of Beanie Babies and then discontinue them before creating the next series. This created a supply and demand problem, which compelled buyers to think all Beanie Babies would all be worth more money. After the first series of stuffed bean toys skyrocketed in price, later editions of the toys also gained popularity as investment opportunities. People who were never involved in investing before flocked to invest in these intentionally rare stuffed animals. Ty only brought out a series at a time and stopped manufacturing older editions, making the appeal for all models even greater.
It was 1997, and Beanie Babies were all over eBay. Sure, eBay was selling all sorts of collector’s items back then, but Beenie Babies were definitely taking a pretty big lead. eBay admits that Beanie Babies were more than 6% of their profits back then, but I’m sure it was much more than that at certain points of the craze for buying and collecting these stuffed animals filled with plastic beans. eBay even joined in with their own listings selling the toys.
I remember my sister and aunt lining up at McDonald’s to purchase dozens of Happy Meals for the tiny stuffed animals inside. They would check local stores for the regular-sized Beanie Babies a few times weekly. They even bought clear boxes to display the Babies.
In the summers, while staying in the US visiting family, my brother and I would go with our older sister to the flea market on weekends so that she could look for potential opportunities in Beanie Babies. By 1998, I was sixteen, and my twenty-five-year-old sister was setting up an eBay account to watch her Beanie Babies opportunities from home. The craze for Beanie Babies was everywhere! And it was fueling eBay’s business.
Knowing when to sell and jump out of that market enabled many people to make thousands in profits. eBay made a name for itself associated with an open-source online marketplace for buying and selling, and people loved it! Love it, as eBay still dominates the collector’s market.
eBay was founded in 1995 as AuctionWeb by Canadian programmer Pierre Omidyar. In May 1997, the company became eBay, and $500 million worth of Beanie Babies was sold on the platform. Those two years of preparation between 1995 and 1997, along with some trial and error, created the right environment for the toy craze to accelerate the growth of a brand-new online company. As a business owner or investor, these moments are vital when it comes to preparation.
Sometimes, we don’t know the potential of our business plan or investment play. That’s why it’s essential to diversify well enough. That we have protections against dangers but not too many choices so that we can regularly modify or change as needed. Imagine eBay’s first big contract with the hosting company that would be taking over the hosting of their website. That was a big deal or investing in the delivery companies supporting eBay or Amazon early on.
There is a lot of potential for growth regardless of the world’s economic situation, and there are always opportunities. Keep your ear to the ground, as they say. We have seen a lot of crazes over the years, and it’s fantastic to say be an eBay. Don’t be the Beanie Babies purchaser who falls for the craze, but it’s not that easy. A lot of us get sucked into investing crazes all the time. Just look at the Dotcom bubble, real estate bubbles, and many more over the years. It’s essential to be on the side of the profiters for the long term, not just the short, but it’s easier said than done.
Let’s use reason while investing and look for the eBays of the world through the trees and over the mob rushing of the crazy.
5 Things You Need to Reason to Be in the Right Place at the Right Time
- What are current trends moving towards– what can be the next big opportunities? For example- AI is a recent trend that may take over many industries. What companies are utilizing AI in an intelligent way that you can use reason to invest or create to capture market share?
- What will stand the test of time– not just two years, but be an investment you can capitalize on long term? If everyone else is doing it, it’s probably already too late.
- Where might the future of the opportunity evolve into– For Ty, it was obvious that as soon as people caught on that the more Beanie Babies that came out, the more the value went down, and the more people sold out and moved on. You must be above the trees, not in the craze, and see beyond today, tomorrow, and next year. Seeing eBay as an excellent investment would have been part of it, but seeing the service providers selling services to e-commerce sites would also be a great move.
- Who will be the customers of the future? Knowing who will be buying the future products helps us understand what will survive the next generation of buyers.
- When will the next opportunity come? Look at trends and research well to determine when the next opportunity might come.
Knowing the who, what, where, when, and why will get you above the crowd and out of the trees of the craze. Keep your reason and think through every opportunity before investing or starting a business. For example, if you started a store selling Beanie Babies in 2000, thinking that you had long-term buyers, you would have been sorely mistaken. Use reason. No trend lasts forever, and with eBay as a competitor, that would have been foolish.
I recently saw an article about Beanie Babies and eBay and thought it would be great to research and write this post about being in the right place at the right time. There are a lot of stories about Ty and its founder, H. Ty Warner. He created the company, made loads of money, and then pivoted into hotels. It’s an interesting story. His net worth in 2023 is 5.7 billion. It’s pretty impressive for a toy creator, but he was wise with developing Beanie Babies and then invested in luxury hotels, the next big thing. Now, go find your next big thing. Subscribe for more investing posts. I hope you have a lovely day.
