The cute toy you once saw in your local gift shop is now in every home, and the movie everyone raved about last year is today's top-selling video. Were you able to predict the ensuing insanity? Do you have the ability to identify the longevity of a current trend? If you've answered yes, the next question you need to ask yourself is: "How can I profit?"
When demand for a particular product is high, prospective entrepreneurs who see an angle should jump on the gravy train. Since the 1997 release of Titanic, for example, entrepreneurs have cashed in on the hype with everything from 3-D puzzles to dinnerware.
But perhaps the biggest aftermarket craze of the decade was inspired by Ty's Beanie Babies. J. Craig Lundberg, 41, had the idea for the Beanbag Tree, a two-piece structure that houses up to 32 of the stuffed animals. Lundberg, owner of HMC Industries Inc., a Lynnwood, Washington, wood turning and display fixtures shop, designed the product with minimal start-up costs. "It helps to have familiarity and interest in the item you want to produce," says Lundberg.
Judy Tompkins, on the other hand, co-founder of Chicago Clipp Designs Inc., had absolutely no experience in the plastics field before creating Beanie tag protectors. So Tompkins, 32, along with her sister, Susan Shelton, 39, and her brother-in-law, Paul Shelton, 41, spoke with collectors, did research on the Internet, read up on the plastics industry and consulted various experts. "The plastics people kept telling us the heart-shaped, one-piece tag we wanted couldn't be made," says Tompkins. After several visits with manufacturers, the trio finally came up with the winning design. "The key was perseverance and research," says Tompkins. The tooling of the plastic mold was expensive, however, so to keep other costs down, orders, shipping and packaging were initially handled in Tompkin's home.
"Secondary markets are what keep [product] crazes alive," says Chris Gigley, editor of Giftware Business magazine. "If you're going to try to ride the wave of a product, theme or license, it must have a huge fan base. If you know someone will go into a store and buy everything that's related to the product, instead of just one or two things, [you have a winning market]."