How Beanie Babies fell into a death spiral

In the past four years, more than 250,000 Beanie Babies have been brought in to I Sold It, an eBay dropoff store in Edina. Owner John Kavanaugh pays 40 cents each, if they're clean and still have tags attached.

He's become used to delivering bad news to sellers such as Melodie Swanson of Otsego. She brought in 202 beanies that she collected from 1995 to 2004. For her $1,000 investment, she got $82.

Two years ago, people told Kavanaugh that they could get $1 for Beanies at garage sales. Last year, they claimed they could get 50 cents.

"This year, they're saying, 'I'm glad someone will take them,'" he said.

Back in the day, buyers were paying $5 to $10 for new Beanie Babies in stores, lots more on the secondary market. Specialty Babies such as Princess Di, which came with a book and a display case, fetched $100 new. But fate has not been kind to Di's buyers. Even the princess is worth only 40 cents, Kavanaugh said. "She's one of the most common bears we get," he said.

Many of his customers refuse to accept that their collection has fallen on hard times until he shows them prices of finished auctions on eBay.

What people don't realize is that maker Ty produced as many as 100 million of some styles, despite its savvy marketing strategy that appeared to limit production, Kavanaugh said.

If it makes collectors feel better, Princess Di and her many Beanie friends will be resold to carnivals, amusement parks and claw-machine vendors, according to Buyingbeans.com, which distributes them from I Sold It and other buyers.

JOHN EWOLDT