Well loyal Shark Tank viewers, I have been absent the past couple of weeks but, with a new episode airing this week I wanted to share my review with you all. This episode showed the Sharks were rather stingy with the offers but, I think for the most part they were well warranted. Lets get started with the review…
Inventors: Brook Bryant and Brittany Hayes
Product: Addison’s Wonderland (www.addisonswonderland.com)
Requesting: $90k for 20% stake
The two ladies entered the Shark Tank to promote their designer, ultra posh sheets and bedding accessory company for children. They spoke of the niche market and that lack of competition that offer the fun colorful offerings. Their solution was to develop a company that offered the most exclusive bedding for kids. They are currently selling only through the online website and for the first year grossed $130k with a 55% margin. Each bedding set sells for $1400 and order sizes range from $800-1200. All marketing has been through social media means. The high price and cost prohibit any Sharks from making a deal.
Feedback: The thing is that they obviously have sales and that would defy logic considering the sales price being so high. As Lori stated, in order to attract the mass market the cost and price need to be much more affordable to the public. I realize they are making the product by hand which is leading to the high costs but, I would think they need to send this overseas if they want to hit it big. I can tell you that a custom printed fabric from China would cost a fraction of the USA (probably $0.10 on the dollar) not to mention the labor rate being so low. A custom bedding set should retail for no more than $149 with a wholesale target of $79 and a gross cost of goods being about $15. From looking at the most updated website the prices do appear to have come down slightly from what they mentioned on the show.
Inventor: Steve Maloney
Product: Muddy Water Camo (www.muddywatercamo.com)
Requesting: $150k for 5% stake
This is an interesting pitch because Steve is a passionate hunter that identified a clear problem with the existing camouflage companies. The patterns used were too simplistic and out of focus and never resemble the real settings. The solutions is a high resolution printed fabric that is used for hunters to stay out of sight from the wildlife. A photo even showed how blended into the surroundings the hunters appeared with the Muddy Waters Camo being worn. The Inventor not only has over $600k invested on his own but they also obtain some investment from other hunters (16% with a valuation of $2.5million). they are selling in 58 retailers but none of the big box players (Dicks, Bass Pro or Gander Mountain). The money would be used for inventory. The Sharks all bow out except Kevin who offers a $150k for 20% stake and Steve quickly turns it down without a counter offer. No Deal.
Feedback: I am not a hunter but I could see this being really successful as a license pattern if they actually hold the IP (not too sure they do or not). If that is the case, making an easy 5-7.5% royalty on a pattern for use by the top textile companies would be huge. The outdoors market is huge especially here in Texas and I can tell you they have a good product but they need to really figure out what they want to be active Managers or lucrative Investors.
Inventors: Megan Jackson-Carreker and Amy Miller
Product: Hip Chixs (www.hipchixs.com)
Requesting: $150k for 35% stake
The two Texas girls from Baylor came to the Tank to pitch their designer jean company for women. The idea behind the design is to make the sexy look available to all people by eliminating the muffin top and whale tale problems that occur. The high end jeans incorporate an elastic waist that helps conform the body. To date the girls have sold $12k in product but the cost breakdown is as follows: MSRP $187, Wholesale $80 and Cost $68 (Yes, only $12/pair margin on wholesale). They are selling through small boutique stores at the moment. Each Shark drops out as there doesn’t appear to be a good ROI and proof of sales. Daymond does offer a nice suggestion of sending a pair to celebrities and public figures in hopes of getting a partner. Kevin is extremely rude to the two girls as they were on the verge of crying telling them to abandon the idea and move onto something else.
Feedback: While I don’t think the girls should have been on the show at this early point in the company I do think that they were treated poorly by the Sharks. Any new Entrepreneur knows that starting a business is never perfect in the beginning and learning the ins and outs of cost management is a hard lesson for most. As with the designer sheet company above, high end is just not the best market right now with the economic uncertainty. They could probably pursue making these jeans in Colombia, India or SE Asia for about $10/pair gross. From here they could then target a MSRP of $100-110 with a lot of profit margin to be made. Don’t give up girls and keep charging forward just take advice along the way and learn to have thick skin and don’t let anybody tell you to quit your dreams.
Inventors: Brooks, Taylor and Tanner Dames
Product: Proof Eyewear (www.iwantproof.com)
Requesting: $150 for 10% stake
The three brothers grew up in a family of millers and their father started up a wood mill in the state of Idaho. That is when they decided to start a company around creating eco-friendly sunglasses by using wood as the main material instead of plastic or metal. The guys started selling and marketing through trade shows and have sold $433k in 12 months. The financials breakdown to: MSRP $100, Wholesale $50 and Cost of Goods $14. They also have gotten some good publicity by celebrities sporting the shades in public. They are in the process of growing an order with Pacific Sunwear which is what the money would be used for. When asked about the company logo, they spoke about an eye clinic in India that some of the proceeds go towards helping fund the charity. Lori, Mark and Daymond all drop out. Kevin then makes an offer of $150k for 25% with a $2.5/pair royalty. Robert matches the offer without the royalty. The guys consult their father and decide to decline the offers.
Feedback: These guys are smart. They didn’t get lured into giving up too much of the company for a small amount of money. They chose to stay true to the mission and declined the offers. I am glad they did too. First off, the publicity on the show alone will help bring more investors to the scene so no sweat. I like the product and I think it will be very successful (for a time). I say that because being wood, they will be more prone to breakage and damage. I really like the styles of the frames (reminiscent of the old Oakley Frogskins). I don’t have much in the way of critical feedback. I only might suggest to expand the branding to a lifestyle approach and add more products to the portfolio. I think they will be try successful so best of luck.
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