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According to Bob Gaudio, who was the organist/singer with The Four Seasons,, the song took about 15 minutes to write and was originally titled "Jackie Baby" (in honor of then-First Lady Jacqueline Kennedy). In a 1968 interview, Gaudio said that the song was inspired by the 1961 Bruce Channel hit "Hey! Baby". He says it took the group longer to decide upon a name for the song than it took him to write it. At the studio, the name was changed to "Terri Baby", and eventually to "Sherry", the name of the daughter of Gaudio's best friend, New York DJ Jack Spector. One of the names that Gaudio pondered for the song was "Peri Baby," which was the name of the record label for which Bob Crewe worked, named after the label owner's daughter.

When The Four Seasons wrote and recorded a demo of this song, they didn't have a record deal. Frankie Valli was friends with Randy Wood, who was the West Coast Sales Manager for Vee Jay Records. Vee Jay was a owned by a black couple and had a lot of success distributing Doo-Wop and R&B songs in the '50s. Their only Pop hit to this point was Gene Chandler's "Duke Of Earl." Valli played the song for Wood over the phone, and Wood loved it. Valli sent him a copy, and Wood took it to a local DJ named Dick "Huggy Boy" Hugg, who played it on his show. Listeners flooded the station with calls, and the song was released on Vee Jay, where it became a massive hit. The Four Seasons never had an official contract with Vee Jay - they submitted material to the label song by song for distribution - and after 7 more Top-40 hits with the label, The Four Seasons sued over non-payment of royalties and signed with Mercury/Philips. Vee Jay went under, leaving behind a legacy as the most successful black-owned record label pre-Motown, and as the first American label to distribute The Beatles.

Before breaking through with this hit, the group was known by a few different names, including The Four Lovers and The Varietones. They did make an Ed Sullivan Show appearance as The Four Lovers, but couldn't score a hit. The group ended up singing backup on songs for other artists, including Danny & The Juniors and Johnny Halo. They spent much of the summer of 1962 performing local New Jersey bars before "Sherry" hit it big.