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How 3 Michigan siblings turned ugly Christmas sweaters into a business bringing in over $5 million a year

Siblings Fred, Mark and Vanessa Hajjar are co-founders of UglyChristmasSweater.com
Source: Fred Hajjar

Three Detroit-based siblings have turned a niche product, ugly Christmas sweaters, into a business that does millions in sales every year.

Over the past three months, Fred, Mark and Vanessa Hajjar, who run UglyChristmasSweater.com, have had over 130,000 orders come in. They're on track to bring in $6.2 million in revenue this year, according to co-founder Fred Hajjar. That's almost double what they brought in just three years ago.

This is the sixth year the siblings have been operating the site and each year brings new opportunities to grow and expand. The site now not only offers festive sweaters, which generally cost between $30 and $70, but also leggings, pajamas and even stuffed animals.

Fred Hajjar, 38, tells CNBC Make It that the most rewarding aspect of running his own business is knowing he built this from scratch — with the help of his family.

Working with his siblings is "usually great," he says. "Of course we bicker sometimes, but at the end of the day, we know that we have a goal here and that's to make sure the business succeeds."

Why ugly sweaters

Hajjar has been involved in online retail since 2001, when he was a student at Michigan State University. After trying and failing to get several sites off the ground, he made a go of it with TV Store Online, selling t-shirts that referenced popular shows and movies.

"I was pursuing a job in engineering and doing this on the side, and it ended up doing quite well," Hajjar says. So well that, after college, he moved into his parents' basement and set up shop. "They were a little bit disappointed, thinking, 'How is this going to be your career?'" Hajjar recalls with a laugh.

But just six months later, he was doing enough business that he knew he'd never search for another job in engineering again.

Over the years, TV Store Online earned enough business to start expanding. In 2011, Fred and his brother Mark started a costume-manufacturing arm of the business, selling costumes to major retailers such as Spirit Halloween and Party City. "We really started understanding manufacturing," Hajjar says.

Then, in 2012, he and his brother Mark noticed some old, ugly Christmas sweaters selling for upwards of $500 on eBay. They bought the domain UglyChristmasSweater.com and, within a few months, designed several sweater styles in time to sell for the holidays.

UglyChristmasSweater.com
CNBC

Six employees, including Hajjar, work to come up with the designs and new concepts like the new 3D ugly sweater that have stuffed animals and other objects popping out of it.The company's biggest win so far has been a create-your-own sweater, Hajjar says.

"When we launched that, we got tons of corporate companies requesting sweaters," he adds, noting they've filled custom sweaters orders for the Ellen DeGeneres online store, as well as for companies including Frito Lay, Twitter, Dropbox, Volkswagen and T-Mobile. Currently, the create-your-own sweaters are manufactured in the U.S., while a majority of the other sweaters sold by UglyChristmasSweater.com are made in China.

Hajjar says building a business around such a unique product comes down to being on top of the trends. And not just with the designs — although thankfully an ugly sweater company means a degree in fashion isn't a necessity. In order to continue to grow in an increasingly competitive space, Hajjar says he and his siblings have focused on the retail and marketing trends, too.

"When we started this, it was really SEO-based, maybe some digital marketing here and there, but now, it's shifted," Hajjar says. So their strategies have shifted too.

We grew quite a bit, and that's probably because of all the social media influencers we've teamed up with to try to promote the product.
Fred Hajjar
co-founder
How social media helps

If you Google "ugly Christmas sweater," UglyChristmasSweater.com is typically one of the top results. And while the company's high ranking is primarily thanks to Hajjar's SEO skills, mentions on social media have also fueled growth.

"We grew quite a bit, and that's probably because of all the social media influencers we've teamed up with to try to promote the product," Hajjar says.

UglyChristmasSweater.com partnered with YouTube star Felix Arvid Ulf Kjellberg, known online as PewDiePie (pronounced like "cutie pie") to produce an exclusive line of sweaters. "His fans are so die-hard that they buy anything he tells them to buy," Hajjar says.

And, just this December, the company partnered with Method Man from Wu Tang Clan.

Small business, big rewards

In addition to helping out with design ideas, Fred Hajjar handles much of the day-to-day management. Mark, 36, is in charge of production and manufacturing for costumes and some of the sweaters, while Vanessa, 34, oversees customer service and social media.

Over the years, Fred Hajjar says the company has been cautious about investing too much in the ugly Christmas sweater trend. But that has shifted as bigger players like Walmart, Kohl's, J. C. Pennys and Macy's have gotten into the game.

"Now you almost feel there's going to be something every year," he says, ranging from new sweater designs to offshoots such as ugly Christmas pajamas. "It's a mass market item," he says.

Donald Trump Christmas Sweater on UglyChristmasSweater.com
CNBC

While the company, which operates out of a 42,000-square-foot warehouse in Detroit, has grown dramatically from just five employees to 35 year-round employees, it remains relatively small and nimble.

Its size helps it compete against bigger companies because it can be more flexible and push boundaries. For example, Hajjar says, UglyChristmasSweater.com can create a Donald Trump sweater. The item, which they debuted after the 2016 election, ended up a best-seller.

"A Walmart won't do that because they have investors and it's politically incorrect, but we're a smaller company and can take those chances," he says.

Don't miss: How this 66-year-old Orthodox Jew turned being Santa into a thriving, year-round business

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VIDEO0:4500:45
My dad's gift-giving tradition taught me a critical money lesson that forever changed the way I spend
Siblings Fred, Mark and Vanessa Hajjar are co-founders of UglyChristmasSweater.com
Source: Fred Hajjar
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