Holiday Central

A holiday gift for kids that's truly one of a kind

For 30-year-old Alex Furmansky, a lot has changed in a year.

Last November, the founder and CEO of Budsies — the custom plush toy company he founded in 2013 — was celebrating its placement on The New York Times' annual holiday gift guide. In the months that followed, that attention helped the Florida-based start-up earn a spot on ABC's "Shark Tank," and lock-in a retail partnership with Gap.

Now, after logging its 10,000th custom creation in July, Budsies is closing in on 17,000 orders, with plans for new partnerships and product categories to keep the momentum going.

Budsies founder Alex Furmansky with his sister, Michelle
Source: Budsies

That momentum, however, hinges on one major factor: a successful holiday season. In 2014, the October to December period accounted for more than half of Budsies' sales — putting additional pressure on the company to perform in the fourth quarter.

It's off to a good start. Furmansky said Budsies experienced an 800 percent increase in orders in October, despite applying surge prices to ensure delivery by Christmas.

"My Econ 101 professor at UPenn would be proud," Furmansky joked.

Budsies was founded when Furmansky's then 11-year-old-sister, Michelle, would return home from camp or school with her drawings, only to have them tossed in the basement shortly thereafter.

"It dawned on me she has this immense creativity and she loves her stuffed animals. What if we could bring them together?" he said.

Her drawing of a red and blue, four-legged "pig-like" creation named Dongler became the first-ever Budsie. But it wasn't an easy process. Without the economies of scale or relationships with factories, it took about three months and a few hundred dollars to produce the one-off creation.

To expand production and increase its speed to market, Furmansky — who had a background in finance and technology — invested $25,000 of his savings into the company. A few months later, he received an undisclosed amount in funding from San Francisco-based venture capital firm MHS Capital.

He said that enabled him to take a longer-term view for the company's growth.

The first step on that journey was expanding the brand's product mix. Whereas Budsies began as a way to transform a child's artwork into a plush toy, it recently expanded into "selfie" dolls. In many cases, Furmansky said, these creations have taken on a deeper meaning than the unicorns and "Frozen"-inspired drawings it brings to life.

For example, if a child's father or mother is serving in the military, the family can commission a doll that looks like that parent. That way, the child can give their parent a hug, even while they're apart.

"That's a really beautiful use case," Furmansky said.

Since launching in July, selfies have grown to account for a quarter of Budsies' sales.

Budsies once again broadened its reach when it launched arts and crafts creativity kits earlier this month. It's also teamed up with Gap Kids on in-store gift cards, and will announce an upcoming partnership will Celebrity Cruises next month. Then, early next year, the company will start producing "Petsies."

"It's super cute to do for a pet that's living and you love, but at the same time we're also getting a lot of inquiries from people whose pets have passed away," Furmansky said.

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Budsies have gotten so popular that Furmansky adopted an Uber-like surge pricing model for the holidays. The increase initially took place on Oct. 22, when the price of Budsie was raised to $79 from $69. On Nov. 4, the price for original Budsies (those based on artwork) went to $89.

Furmansky said he took this approach so that he could ensure holiday orders would be delivered on time. As it stands, it takes a minimum of six people and roughly four weeks to assemble each creation.

In addition to its internal growth initiatives, Budsies may also see a lift from what is expected to be the best year for toy sales in more than a decade. According to NPD Group, sales in the plush market were up 5.6 percent through September, thanks to the popularity of the "Minions" movie.

Plush revenues are expected to reach about $1 billion this year, with the fourth quarter typically accounting for half of the category's sales, according to NPD.

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What makes Budsies unique is that it's one of a very few companies that makes products that are truly a one-off, Furmansky said.

"There's this mass trend of personalization and customization," he said, listing companies like Build-A-Bear and M&M. "[But] you're still combining premade components into one kind of automated unit."

"We are the only people in the world that can, in a scalable way, make one-off plush designs," he said.