In 1922, Bauer attracted customers by giving them an unconditional guarantee, unheard of in that era. The creed for his business was, according the Eddie Bauer website: "To give you such outstanding quality, value, service and guarantee that we may be worthy of your high esteem." Customer satisfaction remained important to him throughout his career.

Bauer married the former Christine "Stine" Heltborg on February 21, 1929. Like her husband, the beauty shop owner was enthusiastic about hunting, fishing, skiing, and other outdoor activities. The couple had one son, Eddie Christian Bauer.

When Bauer could not find a product he wanted to sell, he designed, manufactured, and distributed it himself. One of the early examples of this practice was fly-fishing ties, which Bauer made by hand. In 1934, he took out a patent in the United States and Canada on what was called the "Bauer shuttlecock." This invention spread the game of badminton all over North America.

Personal necessity led Bauer to design one of his best known products, the first quilted goose-down insulated jacket. He designed this jacket after contracting hypothermia while wearing wool in the rain on a winter fishing trip in 1936. Bauer remembered some of the light but warm goose down-filled clothing his uncle from Russia had told him about. That uncle served as a Cossack soldier in Manchuria during the Russo-Japanese War of 1904. Anthony and Diane Hallett quoted Bauer in the Encyclopedia of Entrepreneurs: "I remember my dad saying that if it hadn't been for those down-lined coats the Cossacks wore, my uncle would have froze to death." Bauer patented his design, after making jackets for his friends. The so-called "Skyliner jacket" became extremely popular with those who spent a significant amount of time outdoors, especially sportsmen and climbers. Soon, Bauer held 16 patented designs for quilted apparel, including a sleeping bag. Bauer continued to develop new and innovative products until his retirement.

Bauer's product line expanded to include women's wear (of which his wife was in charge), sleeping bags, tents, skis imported from Norway, hunting and fishing equipment, and boots.

During World War II, Bauer's parkas, backpacks, pants, and sleeping bags were standard issue for American
troops. Bauer was able to solve several problems for the military. There had been a sleeping bag shortage until Bauer stepped in. He eventually sold the armed services over 100,000 sleeping bags. The U.S. Army commissioned Bauer to make what came to be known as the B-9 flight parka.

After the war, veterans who had worn one of the 50,000 jackets in combat, wanted to buy more. They knew exactly where to purchase these jackets because Bauer insisted that his company's label be included on all of his products. With this customer base, Bauer began a highly successful mail order business in 1945. His original mailing list included 14,000 names of soldiers who had worn his clothing, supplied by the American government.

Despite a thriving mail order business, Bauer's retail establishment was suffering, and the company almost went bankrupt several times. Bauer, whose health was affected by years of overwork and a serious back injury, was forced to take on William Niemi as a partner. This local businessman reorganized the store and soon improved the cash flow. Niemi and a revitalized Bauer decided to focus most of their efforts on mail order catalogs. By 1953, catalog sales totaled $50,000. Three years later, the total was $500,000.

Bauer continued to supply his equipment for significant events, including the American K-2 Himalayan Expedition and several journeys through Antarctica. In 1963, James W. Whittaker, the first American to climb Mount Everest, was wearing an Eddie Bauer parka. His whole expedition used and wore Bauer's products.

Bauer and Niemi included their sons, Eddie C. Bauer and William Niemi, Jr., as partners in 1960. The company continued to prosper throughout the 1960s, based mostly on mail order sales, though the original retail store remained open. In 1968, Bauer retired and sold his share of the business to the Niemi family for $1.5 million. That same year, the second Eddie Bauer store was established, the first of many retail stores that would open in the next three decades. By 1971, the company had become part of General Mills. The Eddie Bauer Company continued to build retail stores and expand its line of merchandise. By the time of Bauer's death, there were 39 retail stores and two million mail order customers. Bauer died of a heart attack in Bellevue, Washington on April 18, 1986, two weeks after his wife died of pancreatic cancer.

Eddie Bauer's name lived through the constant expansion of retail stores, merchandise lines, and mail order business. By 1988, there were 61 stores, all bearing Bauer's name. That year the company was bought by Spiegel from General Mills for $260 million. Bauer's name continued to appear on products for the home, many kinds of clothing, as well as specially designed automobiles and sports utility vehicles. By 1999, there were 530 Eddie Bauer stores throughout the world. The company continues to emphasize Bauer's 1922 customer satisfaction policy and unconditional guarantee.