From Family Tradition to Global Brand: The Story Behind The Elf on the Shelf

For millions of families around the world, The Elf on the Shelf has become a beloved part of the Christmas season. Since turning their own childhood tradition into a business in 2005, the founders of The Lumistella Company have expanded into international markets, developed major licensing partnerships, and built an entertainment portfolio around the characters and stories of Santa's world.

But the company's success was far from guaranteed. Its founders faced repeated rejection from publishers, invested their personal savings, and relied on grassroots marketing to introduce an unfamiliar product to customers.

At the 2026 CO—100 Small Business Forum, Christa Pitts, Co-Founder of The Lumistella Company, joined Elizabeth Peterson, Executive Director of Marketing at CO— by U.S. Chamber of Commerce, to discuss the company's journey and the lessons entrepreneurs can apply to their own businesses.

[Read more: Inside The Elf on the Shelf's Growth Strategy] 

Overcoming rejection and starting small

The idea for The Elf on the Shelf originated from a childhood tradition in Pitts's family. Each Christmas season, a “Scout Elf” would appear in different locations around the house and report to Santa overnight. Years later, Pitts's sister and mother came up with the idea to share that tradition through a children's book.

However, Pitts recalled, the concept was initially “rejected by everyone.”

"We took it to big publishers, indie publishers, small publishers — no one would touch it,” she elaborated. “We ended up being told that it was ‘destined for the damaged goods bin’ in writing.”

Rather than abandon the idea, the family decided to self-publish the book. With limited financing options, they invested their own resources to launch the business. Pitts sold her home and contributed the proceeds, while her sister and parents made their own financial sacrifices.

At the start of their journey, the founders initially focused on building interest in their own community.

"My sister likes to say, 'Grow where you're planted,' and I think that's a big starting point," Pitts said. "Don't underestimate your community; you don’t have to take over the whole world.”

They started at a small Christmas market in their hometown, where they could introduce the concept directly to families. The founders sold their initial inventory of 5,000 units during their first season, providing early proof of demand.

From there, they focused on independent specialty retailers that could explain the product and its accompanying tradition to customers. That approach eventually opened doors to larger retailers, including Hallmark and national booksellers.

An unexpected turning point came in 2007, when actress Jennifer Garner was photographed carrying The Elf on the Shelf. Two weeks later, the product was featured on “The TODAY Show,” generating so many orders that the founders recruited their friends to help fulfill them.

[Read more: Key Benefits of E-Commerce Fulfillment Services] 

Turning storytelling into an effective marketing strategy

Before co-founding The Lumistella Company, Pitts worked as a host at QVC, where she gained firsthand experience in retail, television, and sales.

"My job was to listen to their stories, find the reason it might be compelling to someone, and then share that story," she explained.

When the family began to sell The Elf on the Shelf, Pitts put those skills to use, explaining the unfamiliar concept and its accompanying tradition to potential customers.

"I could tell you what The Elf on the Shelf was, what it did, how it worked ... and I could do it in 30 seconds," she said.

The founders also experimented with inexpensive grassroots marketing tactics, including giving away light-up bracelets to attract families to their booth and capture their attention long enough to explain the product.

Pitts’s time at QVC also taught her some valuable lessons about retail strategy, including the risks of expanding too quickly. She cautioned entrepreneurs against rushing into mass retail before establishing a customer base and sufficient demand: “What are you going to do … if someone returns those goods?”

Growing through partnerships and adapting to change

As The Elf on the Shelf gained popularity, families began creating elaborate scenes with their elves and sharing them on social media. The company recognized that customers were developing their own creative experiences around the brand, and saw the potential to build on that.

“Recognizing that it was starting to take on a life of its own, we sat down, and we were like, 'Well, let's just go talk to Disney and Harry Potter and see if they want to engage in this moment,'" Pitts recalled.

Those conversations helped The Lumistella Company expand into licensed products featuring characters from Disney, Marvel, and the Harry Potter universe. The business has also pursued partnerships outside traditional toy and entertainment categories, including a collaboration with Chrysler.

Pitts encouraged entrepreneurs to pursue potential partnerships, even when the connection isn’t immediately obvious.

"Every entrepreneur is made up of some level of grit and tenacity, where no doesn’t mean no,” said Pitts. “It’s just about asking the right person who happens to believe in you … [so] get out from behind the desk, actually talk to people.”

[Read more: How to Build Strong Community Partnerships for Growth] 

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