Elf on the Shelf creators cash in on toy's wild success

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While the Elf on the Shelf is by no means a new phenomenon, its popularity continues to balloon. The pixie, who flies to the North Pole every night to tell Santa whether your children have been naughty or nice, was introduced to the masses in 2005. But since then it's become a holiday tradition in its own right, appearing for the first time in this year's Macy's Thanksgiving day parade and starring in the Pinterest boards of parents around the world. Even Saturday Night Live poked fun at the elf's tattle-tail nature. Dressed in the red suit, a shrunken Bobby Moynihan tells Seth Meyers that he loves being "a little snitch" and a "friggin' narc" in the holiday episode's dress rehearsal.

The product, which retails for about $38 in Canada, was invented by mother Carol Aebersold and her twin daughters Chanda Bell and Christa Pitts. Packaged in a keepsake box alongside a hardcover book, the seasonal sprite likes to play hide-and-seek in different places in the house. Children are told not to touch the elf, as he will lose his magic, but they're encouraged to give him any special messages they have for Santa.

While the three women have sold more than four-million dolls since the company's inception, according to Fox Small Business, it wasn't an easy road. In 2004, after finishing the book, Ms. Aebersold began pitching the idea to book publishers. Faced with rejection, the women eventually pooled their money - from retirement accounts, houses and loans - to create a privately owned publishing company, Creatively Classic Activities and Books (CCA and B), and self-published 5,000 copies of The Elf on the Shelf.

The three Southern women also worked hard and hustled. With a strategy of starting small, they carefully targeted specialty family stores and leveraged social media sites such as Facebook and Twitter to reach parents directly. For more on their roller coaster ride to success, see Elf on the Shelf's Sleigh Ride to Success.

Though the women deliberately started small, The Elf on the Shelf has experienced strong steady growth year after year, with annual revenue topping $16-million in 2011. All sales, marketing and distributions remain in house.

And while not everyone is a fan of the Elf (a guest parenting blogger in this Globe and Mail video says "Ho Ho no thanks" to this tradition), there's no denying the worldwide success of this new Christmas tradition and the entrepreneurial accomplishments of the Elf's family of inventors.

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