The Middle Man Trick.

I'm going to need to watch "The Beanie Bubble" because of how much Beanie Babies helped my business. It was one of four fads in a  row that helped us survive the massive debt incurred by the first couple of fads.

1.) Sports cards (and non-sports cards.)

2.) Comics

3.) Magic

4.) Pogs

5.) Beanie Babies

6.) Pokemon.

My definition of a "bubble" is along the lines of, "I know it when I see it." A bubble is madness, exponential growth in face of doubt, a complete buy-in, a cresting series of warning signals, and then a collapse. 

All of these bubbles (or, if you will, fads) happened in our first twenty years of business. I think since the internet came along there haven't been any retail bubbles that quite match them. (By my definition). Covid revived some of them, but not to bubble level.

Obviously, there have been many bubbles since then, but mostly I've sidestepped them over the last 23 years. Bitcoin is a good example, the housing bubble another. Ironically, it was my experience with retail fads that helped me avoid the housing bubble. I joked that Pogs and houses had the same dynamic, but it's also strangely true. 

Everyone is excused one bubble, because unless you've actually experienced one, you have no idea. 

I don't have the excuse for one bubble; I was caught by two of them. Sports cards were the biggest bubble, the biggest buy-in, the biggest collapse. Followed quickly by comics. Ironically, the comics bubble helped us survive the first bubble, at least at first. Then, the comics collapse just added to our debt level.  I thought I could outmaneuver the bubble, but it still caught me because the rules of the game changed. (Hint: there are no "rules of the game.") I tried to time the comics bubble, but the massive load of comics that came in after the collapse caused us to add to our credit card debt.

Yep. I did the classic. Maxed out 8 credit cards to survive. You could say it was stupid, but we did survive, after all.

Back to Beanie Babies. I decided that I couldn't forgo the massive influx of money that comes in on the upswing of a fad; I just had to be careful to get out in plenty of time. Fortunately, I'd learned a good trick: The Middle Man.

Toward the end of the sports cards boom, I decided to opt out of buying massive quantities of product direct from the manufacturers and instead buy smaller, more affordable quantities from a Middle Man. My discount was about 20% less, so I had to go full retail. (Another reason we survived--after we shed the huge number of customers who wouldn't pay "retail," we rebuilt with customers who valued us enough who would.)

So when Magic and Pokemon and Beanie Babies and Pogs came along, I continued that practice of not opening accounts with the manufacturers, but ordering what I needed from the Middle Man.

The Middle Man was a kill switch. I wasn't obligated to buy massive quantities in order the qualify for the product. I could cut my orders at any time without repercussions. I had an escape valve.

It's funny; I can look back on that moment in all these fads when I decided to get out. In every case, I had customers look at me in astonishment and say, "But the Beanie Babies, (Pogs, Magic, Pokemon, et al) are bigger than ever!"

And I'd just nod my head and quietly start reducing my risk. 

A dangerous game to play. I look back and see Pogs as a bases filled home run; Beanie Babies as a home run; Magic and Pokemon as good, strong triples.

I'm just as glad not to have to gamble on these things anymore, but it was the playing this game that pulled us out of debt that the game incurred in the first place. 

I still order, whenever possible, through a middle man.