How ugly holiday sweaters ramped up into a USD 50 million business
Friends and co-founders Evan Mendelsohn and Nick Morton were resolute about the untapped market for Ugly sweaters around the holidays and thought it had huge potential, and simply how Tipsy Elves was born in 2011.
Just within their first year, they sold ugly sweaters worth USD 500,000. With beginner’s luck, both buddies decided to quit their jobs and invest their time and effort into their newfound business.
Fairly soon they launched their website and started attending trade shows with samples of their ugly sweaters. The response was very encouraging and further boost their confidence. They learned Photoshop basics to start designing their own sweaters. They aimed to create and add a series of humor-based designs over just plain old ugly ones. Another stroke of brilliance, as they ended up selling 5000 sweaters worth USD 400K.
In 2013, the duo convinced Robert Herjavec on Shark Tank to invest USD 100K for 10% stake in their company. After Robert’s investment, their focus changed — Diversification was the key mantra rather than limiting themselves to just holiday sales. They switched from a seasonal sales company to a lifestyle brand. According to a recent online publication, Tipsy Elves generated 35% revenue from non-holiday sales, fairly excellent considering it was started based on the concept of just holiday sales.
They have been extremely creative on various social media campaigns to optimize clickbait monetization and gain traffic. One such feat in 2017 on Tinder recompensed in 100K clicks and over 15K sweepstake entries to win a custom Tinder sweater via their website. Another claim to fame and instant success was partnering with Swarovski Crystals for THE Ugliest sweater giveaway.
Their out-of-the box thinking, and innovative minds had no bounds. It took them from a ugly sweater selling seasonal company to a lifestyle brand retailing in various categories. As of Oct 2020, they generated a revenue of USD 50 million, not bad for ugly sweater selling buddies. I guess the important lesson for any budding entrepreneur here is to believe their instinct and start off with a niche and gradually scale up.