Shark Tank (2009–…): Season 13, Episode 8 - Episode #13.8 - full transcript
Narrator: Tonight, it's the most
wonderful time of the year
in the Tank.
Hello‐ho‐ho!
Not today, Santa!
[ Laughter ]
Which one of you wants a spot
on Santa's nice list?
Our valuation is awesome.
How much do you make
in one month?
$1.7 million.
‐Ohh.
‐Wow.
You gotta be kidding.
A broken heart
turns to cash flow.
I'm smart.
You are such a shining example
for so many people.
And you make the world
a better place.
Oh, my goodness.
3, 2, 1.
[ Party horn blows ]
♪
Narrator: First in the
Tank is a business
that seeks to delight with
their magical creatures.
♪
[ Chuckles ]
♪
Hey, Sharks.
First of all, I need
to say thank you.
All the years
watching "Shark Tank"
inspired me to be
an entrepreneur.
I turned a hobby I
love into a business.
I'm Wendy Hoffmeister,
owner of Wendy's Gnome Shop.
I'm here seeking $200,000
in exchange for 20%
equity in my company.
We can all use a little
more joy in our life.
So I created Wendy's Gnome Shop!
We make and sell decorative
gnomes for your home,
and gnomes need homes!
They're for all
types of occasions.
They make the perfect gift
to put a smile on
someone's face all year long.
We have pre‐made
birthday gnomes,
graduation gnomes,
sports‐themed gnomes,
and, of course, gnomes
for every holiday.
At Wendy's Gnome Shop,
we love hanging
with the gnomies.
[ Laughter ]
And if our customers
are feeling extra creative,
we have a custom option
called Design‐A‐Gnome.
Our customer designs
the gnome from hat to boot,
choosing their colors and theme,
and we make their
vision come to life.
Now, throughout history,
gnomes have been known
for good luck and prosperity.
So, Sharks, who wants to prosper
and put a gnome in every
home with Wendy's Gnome Shop?
I don't even know
what a gnome is.
So, I designed these custom
gnomes for each of you.
You know, Wendy,
I don't have one.
Mine has a crown.
Barbara, we chose you to
experience Design‐A‐Gnome.
So if you please come up ‐‐
So I have to work for my gnome.
You get to pick it out yourself.
Alright ‐‐ Oh, that's good.
Now, what do
people use these for?
They're just around their
home to make them smile.
The first step I want you to do
is tell me which embellishment
you would like on your hat.
Oh, definitely this. Sunflower.
So you want the sunflower on
your hat. Of course. It's the best one.
Then the next thing
is your hat color...
Oh... and your little boots.
This beard, and I'll
take a nice red hat.
Perfect. Okay, it'll just
take her a few minutes
to build your gnome.
So I'm ready for questions.
How do you acquire a customer
that wants to buy one of these?
15% is our website,
and about 80% is on Etsy.
So, let's just talk about
your website business.
Have you ever looked at how
much it costs you to get somebody
to actually want to buy one
of these on your own website?
So, our customer
acquisition cost right now,
it's about $5.
What does it cost
to buy a gnome?
Our average price is about $35.
‐$35? ‐$35?
That's what you sell it for? And
what does it cost you to make one?
$3.50 for materials.
Greiner: Oh, my God.
‐Great margins. ‐Dang.
Great. Now, but if I said,
look, I have to have a gnome,
Yes. and I find this
gnome expensive,
are there options
that are cheaper?
I compare what's on Etsy.
It's about the same price range.
Do people, like, brush their
gnomes and ‐‐ They do brush them.
Do you sell, like, gnome
brushes? Comb their gnome.
We tell people that.
Comb your gnome.
Kevin, it'll give you something
to finally comb again!
Greiner: Comb your gnome.
I'm just ‐‐ I'm amazed
people pay $35 for this.
They absolutely love them.
Wendy, I want to understand
the gnome market, right?
'Cause I wasn't even ‐‐
You didn't read that study,
the research that came out
recently on the gnome market?
Yeah. But ‐‐ [ Laughter ]
So, gnomes, people love them.
They have an emotional
connection with them.
They make them
smile and feel good.
So, what have your
sales been to date?
So, I've been in
business 18 months,
and my sales are
$688,000 lifetime.
‐Whoa. ‐You gotta be kidding.
‐With these little
things? ‐Yes, sir.
‐People like gnomes.
‐They must be good luck.
If I go online and
look for gnomes,
there must be
lots of doll gnomes.
Hoffmeister: I do
have some competition.
They do have some
factory‐produced gnomes
that are more like
stuffed animals.
Mine are much better quality.
I am the top gnome
seller on all of Etsy.
I've sold over 23,000 of them.
You have?! Yes.
This is super impressive.
You started your hobby
in 18 months. Yes.
Almost hitting $700,000.
Yes.
How did you do that?
Two years ago ‐‐ Two
years ago today, actually,
me and the love of my
life, our relationship ended.
And I was pretty heartbroken,
and I needed something to make
me smile, and I needed a hobby.
I made a gnome, and
I thought it was cute.
And I put it on Etsy,
and it sold the next day.
And I made some
more, and they sold.
So it was just like a
spontaneous kind of thing.
Did you always love gnomes? So
that person did you a huge favor.
A broken heart
turns to cash flow.
Wendy, we've established that
you're the Gnome Goddess, right?
Yes.
The question becomes,
how much did you invest
to start this business?
And are you profitable?
To start this business, I
started with less than $1,000.
‐Yeah. Good job. ‐Wow.
The power of broke, baby.
Exactly. That's only
a 668 times return,
but, you know,
who's counting? Yes.
And we're profitable.
So, last year,
we netted $135,000.
There you go! Okay.
‐That's great. ‐Who's we?
How many people do you
have in this business? Me!
So, I have three ladies that
work for me, and my daughter.
Barbara's gnome is complete.
Look at that. I love it!
Wow.
It's darling. I now get it.
I feel immediately
motherly toward it.
[ Laughter ]
Wendy, what's your background?
I was a nurse was my background,
and, you know, I worked for
a community‐based program,
so I helped women in
labor, and I loved it so much.
So then I decided
at 35 years old
to enroll in college
for the first time
to be a labor and
delivery nurse.
‐Wow. ‐Yeah, that's amazing.
And I'm just curious,
lovely daughter
gnome over there,
how do you feel about your mom
and what she's accomplished?
Oh, my gosh. I'm so
proud, so over the moon.
She's a huge inspiration.
Yeah, she's ‐‐ Yeah.
We're both nurses,
and we both have retired
from nursing to make gnomes.
This is an incredible story.
The product is ‐‐
I don't ‐‐ I don't know
what to tell you about it.
I mean, it's ‐‐ You know,
I really respect sales.
But I don't need a
gnome in my portfolio.
I really don't. And so I'm out.
Okay. Thank you.
You have a thriving business,
and you deserve some
serious credit for that.
Thank you.
This isn't the right
business for me,
but I think it's really cute,
and I'm super happy for you.
I'm out.
Thank you so much.
Yeah, Gnome Goddess,
I just got to tell you,
I mean, you are such a shining
example for so many people.
You take $3.50, you sell one,
which leads to
two, which leads to
$674,000 or whatever in sales.
It's great. Yeah. [ Applauding ]
Yeah, and I think I can
grow it so much more.
I have no doubt. But, really,
you're a niche category, right?
It's not a $5 million or
$10 million business.
It's a great business for you,
but it's not something
I want to invest in.
So for those reasons, I'm out.
Wendy, I ‐‐
Where can I add value
to you, or anybody here?
So, I definitely
feel like, you know,
I want a strategic partner.
I think if I had someone
that has marketing expertise,
SEO knowledge,
can really grow this business.
I've decreased the
cost of making a gnome
by 50% since I started by
learning to source materials,
but I think I can improve
that to even scale it more.
And I think someone
with your experience
can help me with those things.
Well, I think I
can help you. I ‐‐
I want to give you an offer.
You're asking $200,000 for 20%.
$200,000 for 35%.
That's my offer.
I think the hair on that
gnome is falling off now.
You can counter, Wendy.
Well, before you counter, Wendy,
let me ask you a few questions.
I don't know the gnome business.
So, is this something in the
last few years people are into,
or they have been into gnomes
from the beginning of time?
Forever. Gnomes have
been around forever.
Okay, my next question is
you had $688,000 in sales,
but you only had
$135,000 profit.
That strikes me like your
overhead is way too high.
What are you spending
that money on every month?
Right, so, a lot of that
actually is Etsy fees.
So that's why I'm trying to
draw more people to the website.
You know what? I had a business
that was usually successful
from the get‐go, Grace and Lace,
and they sold 90% of
their merchandise on Etsy.
Yeah. But I learned
from working with that business
the importance of taking control
of your own customer base.
I've done it with Holiball.
I've done it with Hire Santa.
And it's a lion's effort to
build up your own club,
to get those people
coming directly to you.
But you must if you want
to control your business.
So I'm going to make
you an offer of 30%
for $200,000, but I
want a buck a gnome.
♪
So a royalty, a gnome royalty.
I'm not calling it a royalty.
I'm calling it a buck a gnome.
But that's what it
is. A buck a gnome.
It's a royalty.
You know, we can
make it more interesting.
$200,000, 30%,
50 cents per gnome sold
until you pay back the money,
and then we go straight to
just a 30% equity position.
Okay.
And I'm dropping
the $1 per gnome.
So just 30%.
‐No royalty. ‐No royalty.
O'Leary: Wow, that's
interesting, Wendy.
Now you've really got a
competition going on here.
I know. I see that.
[ High‐pitched ] What
are you gonna do, Wendy?
[ Laughs ]
♪
Oh, my goodness. [ Laughs ]
Narrator: Three Sharks are out.
Daymond has offered Wendy
$200,000 for a 30% stake
in her custom gnome
business, Wendy's Gnome Shop.
But he also wants
a 50‐cent royalty
until his investment is repaid.
Barbara has undercut Daymond
by offering the same deal
without the royalty.
[ High‐pitched ] What
are you gonna do, Wendy?
Oh, my goodness. [ Laughs ]
So, Daymond, will you do that?
The same thing?
Are you playing us
against each other, Wendy?
She's the Gnome Goddess.
Why would she not?
[ Laughs ] I'm smart.
‐Yeah! ‐Yeah, you are.
Why do you feel
that we should keep
negotiating against ourselves?
Because this
business is worth it.
You're gonna make lots of money.
What do you believe
you will make this year
and net this year?
So, my revenue will
be $750,000 this year,
and I will net $150,000.
So, out of $150,000 at 30%,
then I would have
made $50,000. Yes.
O'Leary: 25% of
your capital back.
[ High‐pitched ] Not
a bad deal, Daymond.
You know, Wendy ‐‐ Not
a bad deal. I'll match it.
I'll match it. I'll
match her deal.
30% for $200,000. Honest to God, I
don't care when the money comes back.
It's not where my
head is at on this.
I'm just very ‐‐ No royalty.
Excuse me. Excuse me. I'm sorry.
I was finishing my thought, Barbara.
You want a rude person
like that being your partner?
Oh, my goodness, gracious!
And I'm gonna tell
you one other thing.
Your enemy is your
reliance on outside websites,
and I know how to take
it right off the outside
and give you the
power within your shop.
So, not like I don't
have Bombas,
the #1 brand in
"Shark Tank" history
that sells direct like that,
so I can do the same.
You have two
options. Just pick one.
I want to counter
with 25% for $200,000.
‐To both of them. ‐Yes.
No, I won't go that far. No.
I won't, either. I'm sorry.
Wow.
♪
What are you gonna do, Wendy?
♪
Daymond. That's my gnomie!
‐Yeah! ‐Aw.
Come on. Come on.
Give it up. Give it up.
Oh, my God.
Thank you so much.
Congratulations.
Yeah! [ High‐pitched
] Way to go, Wendy!
Way to go! Congratulations,
Gnome Goddess.
Well done.
[ Squealing ]
Oh, they're so cute.
[ Laughing ] I
cannot believe it.
I don't know. Just in the
moment, it spoke to me.
Like, originally, I
was thinking Barbara,
and then I was like
Daymond ‐‐ Daymond's it.
That's perfect. It's perfect.
I'm so ‐‐ I'm so
happy. I can't believe it.
Perfect. Good job, Mama.
Barb, the only thing that
I think was the difference
between you and I
was that you didn't even
know exactly what they
were. No, I didn't know.
I'm embarrassed. You know,
I never heard of a gnome.
Excuse me. I have a different
question for both of you.
What the hell are you thinking?
[ Laughs ] I think
that there is...
You can't argue with the
numbers... mail‐a‐potato.
Yeah. Yeah.
You know, silly deals like
that. Greiner: Buy‐a‐gnome.
And there's deals
like this that don't rot.
[ Laughs ]
[ High‐pitched ] Oh, no!
♪
Narrator: In Season 12, cousins
Kristy, Jennifer, and Amberly
made a deal with Mark
Cuban and Barbara Corcoran
for their giant inflatable
Christmas ornament company,
Holiball.
You can hang them,
stake them, sit them,
and even float them.
Let's see what they're
up to this holiday season.
Moore: It's the most
wonderful time of the year,
and we've been busy making
your Christmas bolder...
Brighter... And ballsier...
Together: Than ever before.
Couch: Last year, it
was just the three of us
packaging every single
Holiball that went out.
Mark was able to
provide us the cash flow
to move our packaging to
a fulfillment center in Dallas.
Barbara has been able to use
her sales and marketing expertise
to drive traffic
and boost sales.
We are now able to spend the
time needed to grow our brand.
But as the busiest sales time
of our season was approaching,
we fell victim to
an online attack.
Our banking
information was changed,
and they rerouted pay‐outs.
We lost hundreds of
thousands of dollars
during one of the most
critical points in our business.
We've had to persevere,
but we love this product.
We believe in it.
We stand behind it.
After updating our
security system,
we are up and running
just in time for
the holiday season.
We are not gonna let any
Grinch steal our Holiball cheer.
It's a lesson for every
young business out there
to have some kind
of protection in place,
to have security
protocols in place
and watch your back to
see those hacks coming.
We want other small
businesses to know,
the best way to protect
yourself is to do your research.
Make sure that the
platform you're using
protects you against
hacks and fraud.
And make sure that
you have cyber insurance
that can cover you
in situations like these
to help recoup the money.
I have never seen a
business that's taken a hard hit
that was worthy that
didn't bounce back up.
And if I'm reading you
guys right, you're that type.
I say you double those earnings
within the next six months.
It seems unbelievable,
but I believe you will.
Thank you, Barb.
Thank you. Thank you.
Happy Holiball. Cheers.
Couch: Before "Shark Tank,"
our sales were at $117,000.
Now our lifetime
sales are $4.4 million.
We are still in
awe of the success
that "Shark Tank" has
given our company.
Now that we're able
to hire more people,
we'll be able to spend more
time with our families this year,
and that's the best part of it.
Together: Happy Holiball!
♪
Narrator: Next up is a way
to keep your most
precious ornaments safe.
♪
Hi, Sharks. I'm Mika'il.
I'm Ayaan. I'm Sofia.
I'm Amanda. I'm Hamza.
We're the Naqvi family.
And today, we're here
with Ornament Anchor,
the smartest, easiest,
and best way to
hang your ornaments...
Hands down. Hands down.
Hands down. Hands down.
If we look familiar, it's
because we've been here before.
Take a look.
Mika'il: Kudo Banz
starts with a storybook.
At the end of the story,
they get a cool band to wear
and earn Kudos
for good listening.
That's a lot of
money for something
that isn't making
any money yet, but ‐‐
Our margins are huge, though.
Our valuation is fair.
I remember this kid. O'Leary:
I just think it's too early.
I can't go down
the path with you.
I'm out.
You're doing better than most
of the adults that pitch here.
They're gonna regret this.
They're definitely
gonna regret this.
[ Laughter ]
Don't worry. We're
still your biggest fans.
It's our dream to get a deal.
So we're back seeking $90,000
for 5% of our
ornament‐saving business.
Sharks, we all know
ornaments are fragile,
and even just
bumping into the tree
can make your
ornaments fall and break.
Not to mention if
you have dogs or cats.
Flimsy hooks and simple
ribbons just don't work.
They only drape over a branch
waiting for accidents to happen.
It's about time this changed.
By actually anchoring
ornaments to the branch,
Ornament Anchor keeps
your memories safe and secure.
This is an ornament that Ayaan
made when he was 2 years old.
I'd be really upset if it broke.
To secure it, I simply
take Ornament Anchor,
and I put it through the hole.
Then I pull it up and over.
I find a branch...
put it on...
and pull.
That's it.
With Ornament Anchor,
you'll never have to worry
about another precious
memory being broken on the floor.
Ornament Anchor can
hold up to 10 pounds
so you feel confident
your ornaments are secure.
Sofia: And you'll
never have to worry
about pets knocking off
your ornaments again.
Now it's time to put
Ornament Anchor
to the ultimate test.
Goggles, everyone.
That's including you, Sharks.
♪
[ Greiner chuckles ]
Our most precious ornaments
are right here on this tree,
so the stakes are high.
Okay, Lori, when I say go,
can you press that bright
red button in front of you?
Okay. Mm‐hmm.
3, 2, 1.
Go!
‐Wow. ‐Oh.
‐Whew! ‐Whoa.
Greiner: Wow. Pretty impressive.
Sharks, with your help,
we can all save Christmas
one ornament at a time with...
Together: Ornament Anchor!
We have samples for all of
you, so you guys can unwrap
those special
ornaments we made you.
You know, you can shake
them around on their branch,
'cause we are sure
that they won't come off.
So, you guys are quite
the family of entrepreneurs.
Yeah. What happened
to the last one
that made you get into this one?
Well, Sharks, Kudo Banz
was one of the, you know ‐‐
the most important
things in our lives,
and it certainly got us here.
You know, I'll take it
to a baseball analogy.
Sometimes you have, you
know, singles and doubles,
but we're really here today
with Ornament Anchor,
and we know it's
going to hit a home run.
O'Leary: But last time,
the problem you had
was your valuation was insane.
Well, did you learn
anything from that last ‐‐
Of course we did.
Constructive criticism?
Yes. Yes, Sharks, we did,
and our valuation is
awesome this time.
How did you come up with
this, and was it a family thing?
Well, Lori, I came up
with Ornament Anchor
when I was in fourth
grade from a school project.
‐Oh. ‐I was just sitting
around my Christmas tree,
trying to come up
with an invention,
and I thought to myself,
"Every year, we break
two to three ornaments."
And I thought, "There
has to be a solution."
So I created a prototype, and
when I went to the school fair,
everyone swarmed my booth
asking if they could buy some.
All the grandmas, moms,
kids, everyone loved it.
Okay. Now, last time you were
here, the problem was valuation.
We've established that.
Today, it's $90,000 for 5%,
imputes a $1.8 million value.
Yes. Bingo.
Why is this product
worth $1.8 million?
So, the first thing I'll
run you through ‐‐ sales.
Our first year
during the pandemic,
we made $312,000 in sales.
‐Very good. ‐Wow.
And this June, in
a summer month ‐‐
Sharks, this is a
Christmas product ‐‐
we made $80,000 in sales,
which brings our lifetime
total in just 18 short months
to over half a million
dollars in sales.
Good for you.
Cuban: But you know
there's a big difference
between sales and profits.
Yes. Yes, sir, we do.
You are gonna love
our profit margins, Mark.
Landed, a pack of
24 Ornament Anchors
cost us $1.50 to make.
And we sell at
MSRP for $24.99...
Wow... which means our
direct‐to‐consumer
profit margins are 94%,
and our wholesale
profit margins are 70%.
What percentage of your sales
‐‐ You sell one bag for $24.95?
MSRP.
So it's almost like this
could be more expensive
than the ornament I put on
my tree, each one of these.
Yes, Barbara, but
believe it or not,
we did a really big survey
of all of our customers,
and all of our customers said
it was at a perfect
price point for them
because they were
saving, you know, memories.
They were saving
their ornaments.
I mean, people are willing
to also put in the investment.
It's an insurance policy
for your greatest memories.
Mom and Dad, are you
working on the business,
or you got your
day jobs, as well?
So, since this is such a
success, I'm full‐time in it
in terms of finding the buyers,
and then the two are
pitching and closing.
They closed Target.
They closed Nordstrom.
But are you running it?
I'm running operations...
He's just running ‐‐
Yeah... fulfilling orders,
making sure that
everything is going smoothly
in terms of customer service.
And you have no other job?
You know, we come from a
really long line of entrepreneurs.
We have other businesses
that we run and ‐‐
So, wait, you can't be
full‐time... Do you mind me asking
what are the other businesses?
And have other business.
We still have Kudo Banz.
So, Kudo Banz is
still running today,
still doing great.
And we had another venture
that we hopped into
during the pandemic.
We decided we wanted
to be a gaming family,
so we put something up,
and we started selling games.
Mika'il: Yeah, card games.
So, we do that, as well.
So we ‐‐ You know,
we're entrepreneurs
all the time, basically.
But, Sharks,
this is the most
power‐packed team
you're going to get
ever on this show. We ‐‐
You know what,
guys? I love you guys.
We live and breathe
‐‐ But this is not
the most power‐packed
team we're going to get.
There's a lot of moving parts.
The business I think you
guys are in is getting on TV
and selling, right? Oh ‐‐
There's nothing wrong
with that. Absolutely not.
That's a good business. This
is a problem solution product.
But you've got three different
companies, right? At least.
Yeah. But you guys all invest in lots of different
companies. There's too many moving parts.
Wait, Mom, Mom ‐‐
I got this. I got this.
There's too many
moving parts, so I'm out.
Thank you ‐‐ Thank you, Mark,
for your time. You're welcome.
Alright, guys, I
look at this and say
fantastic product, huge margins,
but also, this is an
extremely seasonal product.
And, you know, I look at
my portfolio of companies,
I don't do seasonal products,
'cause I want to sell
stuff all year long.
I'm sorry, guys. I
mean, you're terrific.
You come out here, and
you pitch hard. It's great.
But this is not a
deal for me. I'm out.
Thank you, Kevin, for
your time. Thank you, Kevin.
But ‐‐ John: Okay, guys.
This business is
not for me. I'm out.
Okay. Thank you,
Daymond, for your time.
I have to say, you guys
are incredibly impressive.
Your passion is intense.
I do believe that you
could sell anything.
I know the product
works, and it's good,
but I don't think it's
investable for me,
as it's a one‐off item
that does one function
that is seasonal.
Sadly, it's just not
broad enough for me.
Well, Lori, we ‐‐ And
so I wish you good luck,
but I'm out.
Thank you, Lori, for your time,
but we actually have ‐‐
One Shark left, The Grinch.
Hamza: Barbara. Barbara.
I'll tell you what I loved
about the entire scene.
I love the confidence
of your children.
Thank you. Thank you so
much. That means the most.
But I'm actually shocked
people are paying 25 bucks,
times two for a tree, $50?
I have a lot of money,
I wouldn't pay $50.
I would just rather
lose a few ornaments.
But my biggest concern
is the hopping from
business to business.
I really like someone
who has an idea,
sticks with it through
hell or high water.
Then invest in us, Barbara. Well, Barbara,
we're laser‐focused on Ornament Anch‐‐
It's the only thing that
we've been doing all this time.
For the moment, I think you're
laser‐focused on ornaments,
but I think maybe
this time next year,
it might be something else.
So because of
my mistrust of that,
even though I
adore you, I'm out.
♪
To use a baseball analogy,
you've gone down swinging.
We'll give you credit
for that. Good luck, guys.
We do appreciate it. Thank you.
Greiner: Good job, guys. Good luck.
Thank you.
♪
We wish a Shark could have
been along with us on the ride,
but we know for a fact
that Ornament Anchor's
going to be a big name.
It's going to be in every
single Christmas tree
in America. And worldwide.
And this is the most
power‐packed team
you are going to get.
The Sharks missed out.
♪
Narrator: Next in the Tank is
a veteran in the holiday game,
bringing joy to
children everywhere.
♪
[ Chuckles ]
♪
Well, hello‐ho‐ho!
Sharks, my name is Santa Claus,
and today, I'm asking ‐‐
Oh, no! [ Gasps ]
Not today, Santa!
Hello, Sharks,
and happy holidays!
I'm Tommy, the Real Elf,
and I bring joy to the world
through peace, love, and Elfies.
Alright, Santa. This
is my time to shine.
Have some milk and
cookies over there.
[ Laughter ]
Whew!
Here's the deal, Sharks.
The big guy, he gets busy.
And as the Real Elf,
I've found a way
to spark a little joy
that's available to everyone
around the world anytime
with Elf Grams,
personalized holiday
digital messages.
No matter what you celebrate,
you can log on to
the Real Elf website
and order a personalized
holiday Elf Gram from me,
the one and only Real Elf.
But that's not all.
Hire me for your
next corporate event,
private party...
[ Party horn honks ]
or media appearance.
Oh.
[ Laughter ]
I'm offering 25% of
what's in my stocking
in exchange for
125,000 chestnuts ‐‐
I mean dollars!
Real money to create a platform
and expand the
Real Elf business.
So, Sharks, you'll be sorry
if you miss out
on this opportunity.
So let's make magic happen!
Corcoran: Whoa! Now,
all of you, come on up
and get your
first‐ever Shark Elfie!
Here we go.
[ Laughter ]
[ Laughing ] Ho, ho,
ho, ho! Greiner: Alright.
Everybody say Elfie.
Elfie! Elfie! Elfie! Elfie!
Thanks, Santa.
You're welcome, Tommy.
Good luck with the pitch.
‐Thanks, Elfie. ‐Thank you.
Sharks: Thank you, Santa.
Merry Christmas,
everybody! Ho, ho, ho, ho, ho!
Okay, so, Tommy,
what is the business?
So, I go around the
world, and I take Elfies.
You can hire me, or you
can have an Elf Gram,
or I also have curated Elf swag.
[ Greiner laughs ]
John: What's a
Elfie Gram, though?
I'm trying to
understand the model.
So you have a digital
model, as well as in‐person?
Correct. This last season,
I partnered with an organization
called Imerman Angels.
They are free,
one‐on‐one cancer support.
So partnering up, they
allowed me to create a website
where someone put in a request,
and then I was able to give
them a custom message.
Actually, we have an example
of an Elf Gram for you here today.
Hey, Sharks, it's me,
Tommy, the Real Elf,
sending you peace, love,
and Elfies all year round.
And remember,
you can do anything,
especially in your red onesie.
Happy holidays! [ Laughs ]
What does an Elf Gram cost?
$50 per video.
So, it's just you
at the other side,
at the other end
of the tunnel, right?
Correct. But this past season,
I was pivoting towards
an online model,
because I couldn't be
available to everyone all the time.
Yeah, no kidding.
That's a problem.
It's very seasonal, obviously.
How much do you
make in one month?
So typically, about
$10,000 to $15,000 a month.
This past season was
probably the most successful ‐‐
almost $20,000.
And everything I've
made has been profit.
Year round, as well, or
just around Christmastime?
Just around Christmastime.
But I think the goal here
today is to really expand
the Real Elf brand by
building an online model
so I can make it accessible
to everyone around the world.
So you make $15,000 once
a year around the holiday.
Correct.
Cuban: With your personality,
I'm sure you have a
big online following.
Absolutely. So
tell us about that.
So, everything that I
have done has been online,
so I'm a one‐stop shop.
I don't have a
team of other elves.
You know, I mean,
Barbara, if you're interested,
you're wearing red,
we're wearing red.
I could definitely,
like, hire you if you ‐‐
Barbara, you could be an elf, too.
How many followers do you have?
Well, probably 10,000
if you include Facebook
and Twitter and Instagram.
I mean, I don't tweet 'cause I
don't have opposable thumbs.
It's very hard to respond
to everyone all the time.
Where did you come
up with the idea of,
"I'm gonna put on a red onesie
and become a elf?" Just ‐‐
Well, I have some
wonderful friends that ‐‐
we were at a holiday party.
Everybody started joking
and calling me an elf all night,
and I thought it would be fun
to create a silly holiday card.
And then every year,
everyone was like,
"Are you doing that again?
Are you doing it again?" Oh.
And I just, you know, I
love it. I enjoy the holidays.
I think you're
great at it, actually.
Yeah, really good.
Yeah, you are.
It's very natural,
and it really works,
and I think it's
perfect. You are the Elf.
Holl: Thank you. You
need a social media partner,
'cause you're right,
you can't be everywhere.
Right.
But social media and technology
now could let you
build a brand online.
I wish that person was standing
beside you with a business plan.
But it's a personal
service business.
Every one has to be
done by you, Tommy.
Right. And now it's
just gotten to a point
where I need to expand
it so I can do more.
If you can have other
holiday characters
that you can have
exclusively to this app,
I can be able to expand it more.
But why haven't you done
it to this point, Tommy?
I honestly just don't
have the bandwidth.
You've got 10 months a year that you're doing
nothing! Is this your full‐time job, though? Wait.
This isn't my full time ‐‐
What's your regular full‐time job?
I work for a full‐service
global media agency.
Basically, I'm an E. A., so ‐‐
E.A. being executive
assistant. Correct.
I know this sounds
like such a bizarre idea.
I honestly think it's
bringing the holidays
into the next generation.
Actually, Tommy,
it doesn't sound like
a bizarre idea at all.
The challenge is the execution,
because you already
have a full‐time job.
But ‐‐ That's the problem,
and that's why I can't
get my arms around it.
So for those reasons, I'm out.
I get it. Apps cost
anywhere between ‐‐
O'Leary: Tommy, I
think you're terrific,
but I think this is
a deal for Barbara.
So I'm going to
step aside. I'm out.
Tommy, what are you
going to do with the money?
Well, you know, apps cost
anywhere between $60,000
and $300,000
depending on how
complex they are. Wow.
You really don't need
an app. Yeah, I agree.
I don't think you
need an app at all.
I think you just need
to, like, think of creative,
different, funny ways
in which to do TikToks.
I think you're funny as
can be and so charming.
It's just not a business to me.
You know, it seems like
a great, fun thing for you
that you can keep growing,
but for those reasons, I'm out.
Thank you. John: Yeah, Tommy.
I love you. I ‐‐
I love you, too.
We just met, but I love you,
too. I wish we could hang out
and go and have
some drinks, right?
I think this is a great
business for you.
You don't need
a partner for this,
and I think that you can
grow it from $15,000 a year
to $50,000 to $100,000.
You don't realize that you
can figure it out yourself.
So I don't think this is
investable for me. I'm out.
O'Leary: Tommy, there
are four Sharks out,
but all is not lost,
because you're wearing
red, as you said earlier,
and so is Barbara.
Tommy, there are
four Sharks out,
but all is not lost,
because you're wearing
red, as you said earlier,
and so is Barbara.
You could swap. I look
great in a onesie, by the way.
I really do. Okay, Barbara,
what are you gonna do?
It does everything, especially
the control‐top pantyhose.
I'm telling you.
Everything's been...
[ Laughter ]
What is most obvious
to me sitting here
is you've got everybody
falling in love with you.
You wear your
heart on your sleeve.
You're so charming,
and that's why I'm sitting
here and I'm interested
'cause I really want
to see you do well.
You lead with your heart,
and you make the
world a better place.
You're one of
those kind of guys.
We don't have enough
of them out there.
You mentioned working
with a cancer support group.
Why is that important to you?
So in 2013, I just had
a bit of a rough patch.
So I was diagnosed
with epithelioid sarcoma.
It likes to start at the ends
of your fingers, your toes.
So it's actually missing
my left pinky finger.
Oh, my.
Imerman Angels provides
free one‐on‐one cancer support,
so they were somewhere
that was a source for me,
like, during that time.
Would you be willing
to give away $25
out of every $50?
'Cause I don't think you're
motivated by money at all.
That's my sense of it.
If it would help
someone, absolutely.
Yeah, you would. Alright.
Well, I'm gonna
make you an offer.
I'm going to give
you the $125,000,
but $50,000 in cash
and $75,000 in loan,
and I'm going to take
35% of your business.
But I'd like half the sales
to go to a cancer
charity of your choice.
I think that's a
good idea, Tommy,
because they're
going to promote you.
What do you want to do?
I love you, Barbara.
Ahh. I love you back.
‐Congratulations. ‐Alright!
‐Yeah! ‐Alright.
You're wonderful.
You're such a sweetie pie.
Thank you. Thank you so much.
So darling, really. Thank you.
And you got great
eyelashes. And real!
Oh, I know you're
real. That's the problem.
[ Laughing ] Thank you.
[ Laughs ]
It's just such a
beautiful thing,
and this has just been
preparation meeting opportunity,
so I really thank you
so much, Barbara.
Congratulations, Tommy.
Well done. Thank you.
Congrats, Tommy. Thank you.
John: Congrats.
And he slowly...
[ Laughter ]
See you, Tommy. Well done.
Happy holidays.
I really thought that
towards the end,
it was a no‐go,
and Barbara just came
in, and it just seems like a,
for lack of a better word,
a Christmas miracle.
♪
Narrator: Next up is a way
to bring magic to the holidays.
♪
Hi, Sharks. I'm Chris Cirri.
And I'm Elisa Cirri,
and we're from
Wallingford, Connecticut.
And we are the founders of
Santa's Enchanted Mailbox,
here today seeking an
investment of $150,000
in exchange for 30%
equity in our business.
Writing letters to Santa
is a tradition as old
as Saint Nick himself.
But with the rising
cost of postage,
Santa has chosen our family
to create an exciting
and innovative way
to send your letters
to the North Pole.
With Santa's Enchanted Mailbox,
children everywhere can now
send their letters, lists, drawings,
and communicate with Santa
and his elves all season long
with real magic happening
right before your eyes.
Allow us to demonstrate
how our product works.
Simply insert the
magical envelope
into Santa's Enchanted Mailbox.
Close the door. Raise the flag.
Listen to the enchanted
sounds and chimes.
[ Holiday music playing ]
[ Laughs ]
And when the
mailbox is reopened,
your letter is gone ‐‐
magically! [ Gasps ]
Greiner: Oh, serious?
Whisked away to the North Pole!
But Sharks, don't
just take our word
for how much fun this new
family Christmas tradition is.
Take a look at some
of the excitement
from children around the world.
[ Laughs ]
Aaah!
What?!
[ Laughing ]
[ Squeals ]
Holy moly! Aah!
[ Laughter ]
So, Sharks, which one of you
wants a spot on
Santa's nice list?
Come join our family
in spreading Christmas
joy around the world.
How did you even
come up with this idea?
This is a family business.
My wife and I, we've been
married 12 years yesterday. Yeah.
Congratulations.
Thank you very much.
When our oldest, who's
now 10, was 3 years old,
we used to put out this
cardboard, decorative,
flimsy mailbox as a decoration.
And we said, wouldn't it be cool
if we could bring real
magic right in front of him?
Not something left
to the imagination.
So my stepfather‐in‐law
is a retired engineer.
He helped create the prototype,
then we secured two
granted utility patents.
Good for you. We
trademarked the name.
And then what, again?
How do we go about
bringing this to the masses?
So we decided to
take a licensing route.
Lisa and I started
writing anybody
that wanted to hear our story.
I pitched to anybody who
would take a meeting with me
to learn more about the product,
and we found a wholesale
Christmas‐based company
and signed a three‐year
licensing agreement.
Our licensing agreement
just came to an end.
This is our first year
out on our own, and...
And here we are.
Here we are today.
How much did they sell?
So, our first year, we
did $120,000 in sales.
Our second year, we
were pretty blown away.
A big box retailer
placed an order
for $1.7 million.
Whoo! Whoa.
And in our third year, 2020,
a lot of obstacles happened.
On a personal note, so,
my wife owns a hair salon.
Talk a little bit
about that. Yep.
With COVID, we were
forced to shut down,
and the schools were
forced to shut down.
So overnight, we became
a single‐income family
and so not having my income
pitching in to our home life,
we decided to go a little bit
more conservative on spend,
and that kind of
changed our route
of where we were
going with the mailbox.
Did it sell through at
the big box retailer?
We were told it underperformed
to their expectations.
At the same time,
they dropped the price,
and then they did start to sell.
How much did you make off
of the licensing agreement?
Like, what percentage?
In our first year, we did 4%
until we owned
the cost of the mold.
In the second year,
it went up to 6%
and remained at
6% in our third year.
And did they manufacture
this, or did you? They did.
So we are actually
currently utilizing
their manufacturer still,
but we're paying a markup
that comes with that.
You're buying
direct to the factory,
but you're going to have
to pay a markup on that?
We're paying a markup to
our former licensing partner
to utilize the manufacturer.
So you're using
their factory overseas,
but they made you
pay for the molds.
What do the molds cost?
We don't know the exact total,
but it was close to
$15,000 to $30,000.
We had two different molds made.
Wow. Yeah.
Cuban: This is a
lesson about licensing.
This is a huge lesson.
Are you hearing that, Kevin?
Well, actually, I wouldn't
have done it that way.
Greiner: Licensing is
okay, but it's a huge lesson
on the deal that you did.
Yeah. Right?
This was brand new to us, and
maybe there were some things
that we still scratch
our head about, but...
No, I mean, listen, don't ever
feel bad... you live and you learn.
To me, the best lessons
in life are your mistakes.
So let's talk about
the cost of this. Sure.
How much does it cost to
make. and what do you sell it for?
Right now, they're
at $17.25 all in
to get them here to the States.
We're selling them for
$49.99 on our website.
We know that we have to drive
down the cost of manufacturing.
You said they
brought the price down,
and it started to perform?
I believe you
said that. Correct?
Correct. Yeah,
exactly. Greiner: He did.
And what was the
magic price point
that they started to perform at?
$29? $24.99.
‐$24.99? ‐Yeah.
And you're bringing
it in right now at $17.
Correct.
This mailbox is,
it's a decorative mailbox,
and people were walking past it.
We had no way
to get the story out,
what it does,
and there was no
marketing budget behind it,
so we're really looking
for strategic partners
that can help market this.
I don't like
seasonality in retail.
I see this as a challenge
just to go direct‐to‐consumer.
It works. There's
magic. I get it.
But this one's
not for me. I'm out.
Guys, I'm kind of
in the same boat.
I mean, there's a
lot of complexities
for a simple business.
Your relationship with
your former licensee,
your manufacturing relationship,
particularly trying to
get something done
for this Christmas, right? Yeah.
So I mean, that's just a lot.
That's a big hill to climb. Yep.
So for those reasons, I'm out.
Alright. Thank you,
Mark. Thank you.
I think my challenge is that
you got to get that price down
to put it in retail. Yep.
And this is a product that
has to be demonstrable,
and it's very hard.
It doesn't have what
we call "hanger appeal,"
'cause you don't even realize
all the great things it does
when you're walking by.
So that means you have
to be converting heavy
on social media and online. Yep.
And I don't see
it there just yet,
so I'm out.
Alright, thank you
very much. Thank you.
I have five seasonal businesses
in the last three or four years,
and what's interesting to
me is those entrepreneurs,
I believe, work harder than
any of my other entrepreneurs,
because I have to push
in a very short window.
Mm‐hmm.
But I think your
price is way too high.
And yet, you're smart
people. You're so dedicated.
I think you ought to find
something else to do.
Okay. I don't think
this thing is gonna fly.
I'm out.
But wait, but wait.
And then there was one.
The Queen of Plastic
is still here. Yep.
We came here today
wanting to walk out of here
with a deal with
the right partner.
I mean, we'd be willing
to move the equity
to where it's beneficial for the
amount of work that we need.
First of all, I think
it's cute as can be.
I really do.
And I think kids will love it.
It's just spot‐on, to me.
So I think the
product is a hero.
My problem here is I
do think it's too high,
and it sounds like what's
going on with the factory,
that's really difficult once
you don't have control of it.
Yep. Yes. Very hard.
The other thing that I
worry about with this
is what you could get
that down to. Yeah.
If you had told me
what this could cost,
what we could do with it,
that would have
turned it for me. Yeah.
No, I understand. Yeah.
And so, unfortunately,
because I don't
know, I have to be out.
Well, guys, thank you
so much Thank you.
For the opportunity
to even be here.
Congrats, guys. Good luck.
‐Thank you. ‐Thank you.
♪
We came into this
very inexperienced
as entrepreneurs.
We're disappointed
that we didn't land the deal,
but we're also grateful
for the opportunity
and the words of wisdom
from five
really successful people.
Yeah, it was a lot of fun.
wonderful time of the year
in the Tank.
Hello‐ho‐ho!
Not today, Santa!
[ Laughter ]
Which one of you wants a spot
on Santa's nice list?
Our valuation is awesome.
How much do you make
in one month?
$1.7 million.
‐Ohh.
‐Wow.
You gotta be kidding.
A broken heart
turns to cash flow.
I'm smart.
You are such a shining example
for so many people.
And you make the world
a better place.
Oh, my goodness.
3, 2, 1.
[ Party horn blows ]
♪
Narrator: First in the
Tank is a business
that seeks to delight with
their magical creatures.
♪
[ Chuckles ]
♪
Hey, Sharks.
First of all, I need
to say thank you.
All the years
watching "Shark Tank"
inspired me to be
an entrepreneur.
I turned a hobby I
love into a business.
I'm Wendy Hoffmeister,
owner of Wendy's Gnome Shop.
I'm here seeking $200,000
in exchange for 20%
equity in my company.
We can all use a little
more joy in our life.
So I created Wendy's Gnome Shop!
We make and sell decorative
gnomes for your home,
and gnomes need homes!
They're for all
types of occasions.
They make the perfect gift
to put a smile on
someone's face all year long.
We have pre‐made
birthday gnomes,
graduation gnomes,
sports‐themed gnomes,
and, of course, gnomes
for every holiday.
At Wendy's Gnome Shop,
we love hanging
with the gnomies.
[ Laughter ]
And if our customers
are feeling extra creative,
we have a custom option
called Design‐A‐Gnome.
Our customer designs
the gnome from hat to boot,
choosing their colors and theme,
and we make their
vision come to life.
Now, throughout history,
gnomes have been known
for good luck and prosperity.
So, Sharks, who wants to prosper
and put a gnome in every
home with Wendy's Gnome Shop?
I don't even know
what a gnome is.
So, I designed these custom
gnomes for each of you.
You know, Wendy,
I don't have one.
Mine has a crown.
Barbara, we chose you to
experience Design‐A‐Gnome.
So if you please come up ‐‐
So I have to work for my gnome.
You get to pick it out yourself.
Alright ‐‐ Oh, that's good.
Now, what do
people use these for?
They're just around their
home to make them smile.
The first step I want you to do
is tell me which embellishment
you would like on your hat.
Oh, definitely this. Sunflower.
So you want the sunflower on
your hat. Of course. It's the best one.
Then the next thing
is your hat color...
Oh... and your little boots.
This beard, and I'll
take a nice red hat.
Perfect. Okay, it'll just
take her a few minutes
to build your gnome.
So I'm ready for questions.
How do you acquire a customer
that wants to buy one of these?
15% is our website,
and about 80% is on Etsy.
So, let's just talk about
your website business.
Have you ever looked at how
much it costs you to get somebody
to actually want to buy one
of these on your own website?
So, our customer
acquisition cost right now,
it's about $5.
What does it cost
to buy a gnome?
Our average price is about $35.
‐$35? ‐$35?
That's what you sell it for? And
what does it cost you to make one?
$3.50 for materials.
Greiner: Oh, my God.
‐Great margins. ‐Dang.
Great. Now, but if I said,
look, I have to have a gnome,
Yes. and I find this
gnome expensive,
are there options
that are cheaper?
I compare what's on Etsy.
It's about the same price range.
Do people, like, brush their
gnomes and ‐‐ They do brush them.
Do you sell, like, gnome
brushes? Comb their gnome.
We tell people that.
Comb your gnome.
Kevin, it'll give you something
to finally comb again!
Greiner: Comb your gnome.
I'm just ‐‐ I'm amazed
people pay $35 for this.
They absolutely love them.
Wendy, I want to understand
the gnome market, right?
'Cause I wasn't even ‐‐
You didn't read that study,
the research that came out
recently on the gnome market?
Yeah. But ‐‐ [ Laughter ]
So, gnomes, people love them.
They have an emotional
connection with them.
They make them
smile and feel good.
So, what have your
sales been to date?
So, I've been in
business 18 months,
and my sales are
$688,000 lifetime.
‐Whoa. ‐You gotta be kidding.
‐With these little
things? ‐Yes, sir.
‐People like gnomes.
‐They must be good luck.
If I go online and
look for gnomes,
there must be
lots of doll gnomes.
Hoffmeister: I do
have some competition.
They do have some
factory‐produced gnomes
that are more like
stuffed animals.
Mine are much better quality.
I am the top gnome
seller on all of Etsy.
I've sold over 23,000 of them.
You have?! Yes.
This is super impressive.
You started your hobby
in 18 months. Yes.
Almost hitting $700,000.
Yes.
How did you do that?
Two years ago ‐‐ Two
years ago today, actually,
me and the love of my
life, our relationship ended.
And I was pretty heartbroken,
and I needed something to make
me smile, and I needed a hobby.
I made a gnome, and
I thought it was cute.
And I put it on Etsy,
and it sold the next day.
And I made some
more, and they sold.
So it was just like a
spontaneous kind of thing.
Did you always love gnomes? So
that person did you a huge favor.
A broken heart
turns to cash flow.
Wendy, we've established that
you're the Gnome Goddess, right?
Yes.
The question becomes,
how much did you invest
to start this business?
And are you profitable?
To start this business, I
started with less than $1,000.
‐Yeah. Good job. ‐Wow.
The power of broke, baby.
Exactly. That's only
a 668 times return,
but, you know,
who's counting? Yes.
And we're profitable.
So, last year,
we netted $135,000.
There you go! Okay.
‐That's great. ‐Who's we?
How many people do you
have in this business? Me!
So, I have three ladies that
work for me, and my daughter.
Barbara's gnome is complete.
Look at that. I love it!
Wow.
It's darling. I now get it.
I feel immediately
motherly toward it.
[ Laughter ]
Wendy, what's your background?
I was a nurse was my background,
and, you know, I worked for
a community‐based program,
so I helped women in
labor, and I loved it so much.
So then I decided
at 35 years old
to enroll in college
for the first time
to be a labor and
delivery nurse.
‐Wow. ‐Yeah, that's amazing.
And I'm just curious,
lovely daughter
gnome over there,
how do you feel about your mom
and what she's accomplished?
Oh, my gosh. I'm so
proud, so over the moon.
She's a huge inspiration.
Yeah, she's ‐‐ Yeah.
We're both nurses,
and we both have retired
from nursing to make gnomes.
This is an incredible story.
The product is ‐‐
I don't ‐‐ I don't know
what to tell you about it.
I mean, it's ‐‐ You know,
I really respect sales.
But I don't need a
gnome in my portfolio.
I really don't. And so I'm out.
Okay. Thank you.
You have a thriving business,
and you deserve some
serious credit for that.
Thank you.
This isn't the right
business for me,
but I think it's really cute,
and I'm super happy for you.
I'm out.
Thank you so much.
Yeah, Gnome Goddess,
I just got to tell you,
I mean, you are such a shining
example for so many people.
You take $3.50, you sell one,
which leads to
two, which leads to
$674,000 or whatever in sales.
It's great. Yeah. [ Applauding ]
Yeah, and I think I can
grow it so much more.
I have no doubt. But, really,
you're a niche category, right?
It's not a $5 million or
$10 million business.
It's a great business for you,
but it's not something
I want to invest in.
So for those reasons, I'm out.
Wendy, I ‐‐
Where can I add value
to you, or anybody here?
So, I definitely
feel like, you know,
I want a strategic partner.
I think if I had someone
that has marketing expertise,
SEO knowledge,
can really grow this business.
I've decreased the
cost of making a gnome
by 50% since I started by
learning to source materials,
but I think I can improve
that to even scale it more.
And I think someone
with your experience
can help me with those things.
Well, I think I
can help you. I ‐‐
I want to give you an offer.
You're asking $200,000 for 20%.
$200,000 for 35%.
That's my offer.
I think the hair on that
gnome is falling off now.
You can counter, Wendy.
Well, before you counter, Wendy,
let me ask you a few questions.
I don't know the gnome business.
So, is this something in the
last few years people are into,
or they have been into gnomes
from the beginning of time?
Forever. Gnomes have
been around forever.
Okay, my next question is
you had $688,000 in sales,
but you only had
$135,000 profit.
That strikes me like your
overhead is way too high.
What are you spending
that money on every month?
Right, so, a lot of that
actually is Etsy fees.
So that's why I'm trying to
draw more people to the website.
You know what? I had a business
that was usually successful
from the get‐go, Grace and Lace,
and they sold 90% of
their merchandise on Etsy.
Yeah. But I learned
from working with that business
the importance of taking control
of your own customer base.
I've done it with Holiball.
I've done it with Hire Santa.
And it's a lion's effort to
build up your own club,
to get those people
coming directly to you.
But you must if you want
to control your business.
So I'm going to make
you an offer of 30%
for $200,000, but I
want a buck a gnome.
♪
So a royalty, a gnome royalty.
I'm not calling it a royalty.
I'm calling it a buck a gnome.
But that's what it
is. A buck a gnome.
It's a royalty.
You know, we can
make it more interesting.
$200,000, 30%,
50 cents per gnome sold
until you pay back the money,
and then we go straight to
just a 30% equity position.
Okay.
And I'm dropping
the $1 per gnome.
So just 30%.
‐No royalty. ‐No royalty.
O'Leary: Wow, that's
interesting, Wendy.
Now you've really got a
competition going on here.
I know. I see that.
[ High‐pitched ] What
are you gonna do, Wendy?
[ Laughs ]
♪
Oh, my goodness. [ Laughs ]
Narrator: Three Sharks are out.
Daymond has offered Wendy
$200,000 for a 30% stake
in her custom gnome
business, Wendy's Gnome Shop.
But he also wants
a 50‐cent royalty
until his investment is repaid.
Barbara has undercut Daymond
by offering the same deal
without the royalty.
[ High‐pitched ] What
are you gonna do, Wendy?
Oh, my goodness. [ Laughs ]
So, Daymond, will you do that?
The same thing?
Are you playing us
against each other, Wendy?
She's the Gnome Goddess.
Why would she not?
[ Laughs ] I'm smart.
‐Yeah! ‐Yeah, you are.
Why do you feel
that we should keep
negotiating against ourselves?
Because this
business is worth it.
You're gonna make lots of money.
What do you believe
you will make this year
and net this year?
So, my revenue will
be $750,000 this year,
and I will net $150,000.
So, out of $150,000 at 30%,
then I would have
made $50,000. Yes.
O'Leary: 25% of
your capital back.
[ High‐pitched ] Not
a bad deal, Daymond.
You know, Wendy ‐‐ Not
a bad deal. I'll match it.
I'll match it. I'll
match her deal.
30% for $200,000. Honest to God, I
don't care when the money comes back.
It's not where my
head is at on this.
I'm just very ‐‐ No royalty.
Excuse me. Excuse me. I'm sorry.
I was finishing my thought, Barbara.
You want a rude person
like that being your partner?
Oh, my goodness, gracious!
And I'm gonna tell
you one other thing.
Your enemy is your
reliance on outside websites,
and I know how to take
it right off the outside
and give you the
power within your shop.
So, not like I don't
have Bombas,
the #1 brand in
"Shark Tank" history
that sells direct like that,
so I can do the same.
You have two
options. Just pick one.
I want to counter
with 25% for $200,000.
‐To both of them. ‐Yes.
No, I won't go that far. No.
I won't, either. I'm sorry.
Wow.
♪
What are you gonna do, Wendy?
♪
Daymond. That's my gnomie!
‐Yeah! ‐Aw.
Come on. Come on.
Give it up. Give it up.
Oh, my God.
Thank you so much.
Congratulations.
Yeah! [ High‐pitched
] Way to go, Wendy!
Way to go! Congratulations,
Gnome Goddess.
Well done.
[ Squealing ]
Oh, they're so cute.
[ Laughing ] I
cannot believe it.
I don't know. Just in the
moment, it spoke to me.
Like, originally, I
was thinking Barbara,
and then I was like
Daymond ‐‐ Daymond's it.
That's perfect. It's perfect.
I'm so ‐‐ I'm so
happy. I can't believe it.
Perfect. Good job, Mama.
Barb, the only thing that
I think was the difference
between you and I
was that you didn't even
know exactly what they
were. No, I didn't know.
I'm embarrassed. You know,
I never heard of a gnome.
Excuse me. I have a different
question for both of you.
What the hell are you thinking?
[ Laughs ] I think
that there is...
You can't argue with the
numbers... mail‐a‐potato.
Yeah. Yeah.
You know, silly deals like
that. Greiner: Buy‐a‐gnome.
And there's deals
like this that don't rot.
[ Laughs ]
[ High‐pitched ] Oh, no!
♪
Narrator: In Season 12, cousins
Kristy, Jennifer, and Amberly
made a deal with Mark
Cuban and Barbara Corcoran
for their giant inflatable
Christmas ornament company,
Holiball.
You can hang them,
stake them, sit them,
and even float them.
Let's see what they're
up to this holiday season.
Moore: It's the most
wonderful time of the year,
and we've been busy making
your Christmas bolder...
Brighter... And ballsier...
Together: Than ever before.
Couch: Last year, it
was just the three of us
packaging every single
Holiball that went out.
Mark was able to
provide us the cash flow
to move our packaging to
a fulfillment center in Dallas.
Barbara has been able to use
her sales and marketing expertise
to drive traffic
and boost sales.
We are now able to spend the
time needed to grow our brand.
But as the busiest sales time
of our season was approaching,
we fell victim to
an online attack.
Our banking
information was changed,
and they rerouted pay‐outs.
We lost hundreds of
thousands of dollars
during one of the most
critical points in our business.
We've had to persevere,
but we love this product.
We believe in it.
We stand behind it.
After updating our
security system,
we are up and running
just in time for
the holiday season.
We are not gonna let any
Grinch steal our Holiball cheer.
It's a lesson for every
young business out there
to have some kind
of protection in place,
to have security
protocols in place
and watch your back to
see those hacks coming.
We want other small
businesses to know,
the best way to protect
yourself is to do your research.
Make sure that the
platform you're using
protects you against
hacks and fraud.
And make sure that
you have cyber insurance
that can cover you
in situations like these
to help recoup the money.
I have never seen a
business that's taken a hard hit
that was worthy that
didn't bounce back up.
And if I'm reading you
guys right, you're that type.
I say you double those earnings
within the next six months.
It seems unbelievable,
but I believe you will.
Thank you, Barb.
Thank you. Thank you.
Happy Holiball. Cheers.
Couch: Before "Shark Tank,"
our sales were at $117,000.
Now our lifetime
sales are $4.4 million.
We are still in
awe of the success
that "Shark Tank" has
given our company.
Now that we're able
to hire more people,
we'll be able to spend more
time with our families this year,
and that's the best part of it.
Together: Happy Holiball!
♪
Narrator: Next up is a way
to keep your most
precious ornaments safe.
♪
Hi, Sharks. I'm Mika'il.
I'm Ayaan. I'm Sofia.
I'm Amanda. I'm Hamza.
We're the Naqvi family.
And today, we're here
with Ornament Anchor,
the smartest, easiest,
and best way to
hang your ornaments...
Hands down. Hands down.
Hands down. Hands down.
If we look familiar, it's
because we've been here before.
Take a look.
Mika'il: Kudo Banz
starts with a storybook.
At the end of the story,
they get a cool band to wear
and earn Kudos
for good listening.
That's a lot of
money for something
that isn't making
any money yet, but ‐‐
Our margins are huge, though.
Our valuation is fair.
I remember this kid. O'Leary:
I just think it's too early.
I can't go down
the path with you.
I'm out.
You're doing better than most
of the adults that pitch here.
They're gonna regret this.
They're definitely
gonna regret this.
[ Laughter ]
Don't worry. We're
still your biggest fans.
It's our dream to get a deal.
So we're back seeking $90,000
for 5% of our
ornament‐saving business.
Sharks, we all know
ornaments are fragile,
and even just
bumping into the tree
can make your
ornaments fall and break.
Not to mention if
you have dogs or cats.
Flimsy hooks and simple
ribbons just don't work.
They only drape over a branch
waiting for accidents to happen.
It's about time this changed.
By actually anchoring
ornaments to the branch,
Ornament Anchor keeps
your memories safe and secure.
This is an ornament that Ayaan
made when he was 2 years old.
I'd be really upset if it broke.
To secure it, I simply
take Ornament Anchor,
and I put it through the hole.
Then I pull it up and over.
I find a branch...
put it on...
and pull.
That's it.
With Ornament Anchor,
you'll never have to worry
about another precious
memory being broken on the floor.
Ornament Anchor can
hold up to 10 pounds
so you feel confident
your ornaments are secure.
Sofia: And you'll
never have to worry
about pets knocking off
your ornaments again.
Now it's time to put
Ornament Anchor
to the ultimate test.
Goggles, everyone.
That's including you, Sharks.
♪
[ Greiner chuckles ]
Our most precious ornaments
are right here on this tree,
so the stakes are high.
Okay, Lori, when I say go,
can you press that bright
red button in front of you?
Okay. Mm‐hmm.
3, 2, 1.
Go!
‐Wow. ‐Oh.
‐Whew! ‐Whoa.
Greiner: Wow. Pretty impressive.
Sharks, with your help,
we can all save Christmas
one ornament at a time with...
Together: Ornament Anchor!
We have samples for all of
you, so you guys can unwrap
those special
ornaments we made you.
You know, you can shake
them around on their branch,
'cause we are sure
that they won't come off.
So, you guys are quite
the family of entrepreneurs.
Yeah. What happened
to the last one
that made you get into this one?
Well, Sharks, Kudo Banz
was one of the, you know ‐‐
the most important
things in our lives,
and it certainly got us here.
You know, I'll take it
to a baseball analogy.
Sometimes you have, you
know, singles and doubles,
but we're really here today
with Ornament Anchor,
and we know it's
going to hit a home run.
O'Leary: But last time,
the problem you had
was your valuation was insane.
Well, did you learn
anything from that last ‐‐
Of course we did.
Constructive criticism?
Yes. Yes, Sharks, we did,
and our valuation is
awesome this time.
How did you come up with
this, and was it a family thing?
Well, Lori, I came up
with Ornament Anchor
when I was in fourth
grade from a school project.
‐Oh. ‐I was just sitting
around my Christmas tree,
trying to come up
with an invention,
and I thought to myself,
"Every year, we break
two to three ornaments."
And I thought, "There
has to be a solution."
So I created a prototype, and
when I went to the school fair,
everyone swarmed my booth
asking if they could buy some.
All the grandmas, moms,
kids, everyone loved it.
Okay. Now, last time you were
here, the problem was valuation.
We've established that.
Today, it's $90,000 for 5%,
imputes a $1.8 million value.
Yes. Bingo.
Why is this product
worth $1.8 million?
So, the first thing I'll
run you through ‐‐ sales.
Our first year
during the pandemic,
we made $312,000 in sales.
‐Very good. ‐Wow.
And this June, in
a summer month ‐‐
Sharks, this is a
Christmas product ‐‐
we made $80,000 in sales,
which brings our lifetime
total in just 18 short months
to over half a million
dollars in sales.
Good for you.
Cuban: But you know
there's a big difference
between sales and profits.
Yes. Yes, sir, we do.
You are gonna love
our profit margins, Mark.
Landed, a pack of
24 Ornament Anchors
cost us $1.50 to make.
And we sell at
MSRP for $24.99...
Wow... which means our
direct‐to‐consumer
profit margins are 94%,
and our wholesale
profit margins are 70%.
What percentage of your sales
‐‐ You sell one bag for $24.95?
MSRP.
So it's almost like this
could be more expensive
than the ornament I put on
my tree, each one of these.
Yes, Barbara, but
believe it or not,
we did a really big survey
of all of our customers,
and all of our customers said
it was at a perfect
price point for them
because they were
saving, you know, memories.
They were saving
their ornaments.
I mean, people are willing
to also put in the investment.
It's an insurance policy
for your greatest memories.
Mom and Dad, are you
working on the business,
or you got your
day jobs, as well?
So, since this is such a
success, I'm full‐time in it
in terms of finding the buyers,
and then the two are
pitching and closing.
They closed Target.
They closed Nordstrom.
But are you running it?
I'm running operations...
He's just running ‐‐
Yeah... fulfilling orders,
making sure that
everything is going smoothly
in terms of customer service.
And you have no other job?
You know, we come from a
really long line of entrepreneurs.
We have other businesses
that we run and ‐‐
So, wait, you can't be
full‐time... Do you mind me asking
what are the other businesses?
And have other business.
We still have Kudo Banz.
So, Kudo Banz is
still running today,
still doing great.
And we had another venture
that we hopped into
during the pandemic.
We decided we wanted
to be a gaming family,
so we put something up,
and we started selling games.
Mika'il: Yeah, card games.
So, we do that, as well.
So we ‐‐ You know,
we're entrepreneurs
all the time, basically.
But, Sharks,
this is the most
power‐packed team
you're going to get
ever on this show. We ‐‐
You know what,
guys? I love you guys.
We live and breathe
‐‐ But this is not
the most power‐packed
team we're going to get.
There's a lot of moving parts.
The business I think you
guys are in is getting on TV
and selling, right? Oh ‐‐
There's nothing wrong
with that. Absolutely not.
That's a good business. This
is a problem solution product.
But you've got three different
companies, right? At least.
Yeah. But you guys all invest in lots of different
companies. There's too many moving parts.
Wait, Mom, Mom ‐‐
I got this. I got this.
There's too many
moving parts, so I'm out.
Thank you ‐‐ Thank you, Mark,
for your time. You're welcome.
Alright, guys, I
look at this and say
fantastic product, huge margins,
but also, this is an
extremely seasonal product.
And, you know, I look at
my portfolio of companies,
I don't do seasonal products,
'cause I want to sell
stuff all year long.
I'm sorry, guys. I
mean, you're terrific.
You come out here, and
you pitch hard. It's great.
But this is not a
deal for me. I'm out.
Thank you, Kevin, for
your time. Thank you, Kevin.
But ‐‐ John: Okay, guys.
This business is
not for me. I'm out.
Okay. Thank you,
Daymond, for your time.
I have to say, you guys
are incredibly impressive.
Your passion is intense.
I do believe that you
could sell anything.
I know the product
works, and it's good,
but I don't think it's
investable for me,
as it's a one‐off item
that does one function
that is seasonal.
Sadly, it's just not
broad enough for me.
Well, Lori, we ‐‐ And
so I wish you good luck,
but I'm out.
Thank you, Lori, for your time,
but we actually have ‐‐
One Shark left, The Grinch.
Hamza: Barbara. Barbara.
I'll tell you what I loved
about the entire scene.
I love the confidence
of your children.
Thank you. Thank you so
much. That means the most.
But I'm actually shocked
people are paying 25 bucks,
times two for a tree, $50?
I have a lot of money,
I wouldn't pay $50.
I would just rather
lose a few ornaments.
But my biggest concern
is the hopping from
business to business.
I really like someone
who has an idea,
sticks with it through
hell or high water.
Then invest in us, Barbara. Well, Barbara,
we're laser‐focused on Ornament Anch‐‐
It's the only thing that
we've been doing all this time.
For the moment, I think you're
laser‐focused on ornaments,
but I think maybe
this time next year,
it might be something else.
So because of
my mistrust of that,
even though I
adore you, I'm out.
♪
To use a baseball analogy,
you've gone down swinging.
We'll give you credit
for that. Good luck, guys.
We do appreciate it. Thank you.
Greiner: Good job, guys. Good luck.
Thank you.
♪
We wish a Shark could have
been along with us on the ride,
but we know for a fact
that Ornament Anchor's
going to be a big name.
It's going to be in every
single Christmas tree
in America. And worldwide.
And this is the most
power‐packed team
you are going to get.
The Sharks missed out.
♪
Narrator: Next in the Tank is
a veteran in the holiday game,
bringing joy to
children everywhere.
♪
[ Chuckles ]
♪
Well, hello‐ho‐ho!
Sharks, my name is Santa Claus,
and today, I'm asking ‐‐
Oh, no! [ Gasps ]
Not today, Santa!
Hello, Sharks,
and happy holidays!
I'm Tommy, the Real Elf,
and I bring joy to the world
through peace, love, and Elfies.
Alright, Santa. This
is my time to shine.
Have some milk and
cookies over there.
[ Laughter ]
Whew!
Here's the deal, Sharks.
The big guy, he gets busy.
And as the Real Elf,
I've found a way
to spark a little joy
that's available to everyone
around the world anytime
with Elf Grams,
personalized holiday
digital messages.
No matter what you celebrate,
you can log on to
the Real Elf website
and order a personalized
holiday Elf Gram from me,
the one and only Real Elf.
But that's not all.
Hire me for your
next corporate event,
private party...
[ Party horn honks ]
or media appearance.
Oh.
[ Laughter ]
I'm offering 25% of
what's in my stocking
in exchange for
125,000 chestnuts ‐‐
I mean dollars!
Real money to create a platform
and expand the
Real Elf business.
So, Sharks, you'll be sorry
if you miss out
on this opportunity.
So let's make magic happen!
Corcoran: Whoa! Now,
all of you, come on up
and get your
first‐ever Shark Elfie!
Here we go.
[ Laughter ]
[ Laughing ] Ho, ho,
ho, ho! Greiner: Alright.
Everybody say Elfie.
Elfie! Elfie! Elfie! Elfie!
Thanks, Santa.
You're welcome, Tommy.
Good luck with the pitch.
‐Thanks, Elfie. ‐Thank you.
Sharks: Thank you, Santa.
Merry Christmas,
everybody! Ho, ho, ho, ho, ho!
Okay, so, Tommy,
what is the business?
So, I go around the
world, and I take Elfies.
You can hire me, or you
can have an Elf Gram,
or I also have curated Elf swag.
[ Greiner laughs ]
John: What's a
Elfie Gram, though?
I'm trying to
understand the model.
So you have a digital
model, as well as in‐person?
Correct. This last season,
I partnered with an organization
called Imerman Angels.
They are free,
one‐on‐one cancer support.
So partnering up, they
allowed me to create a website
where someone put in a request,
and then I was able to give
them a custom message.
Actually, we have an example
of an Elf Gram for you here today.
Hey, Sharks, it's me,
Tommy, the Real Elf,
sending you peace, love,
and Elfies all year round.
And remember,
you can do anything,
especially in your red onesie.
Happy holidays! [ Laughs ]
What does an Elf Gram cost?
$50 per video.
So, it's just you
at the other side,
at the other end
of the tunnel, right?
Correct. But this past season,
I was pivoting towards
an online model,
because I couldn't be
available to everyone all the time.
Yeah, no kidding.
That's a problem.
It's very seasonal, obviously.
How much do you
make in one month?
So typically, about
$10,000 to $15,000 a month.
This past season was
probably the most successful ‐‐
almost $20,000.
And everything I've
made has been profit.
Year round, as well, or
just around Christmastime?
Just around Christmastime.
But I think the goal here
today is to really expand
the Real Elf brand by
building an online model
so I can make it accessible
to everyone around the world.
So you make $15,000 once
a year around the holiday.
Correct.
Cuban: With your personality,
I'm sure you have a
big online following.
Absolutely. So
tell us about that.
So, everything that I
have done has been online,
so I'm a one‐stop shop.
I don't have a
team of other elves.
You know, I mean,
Barbara, if you're interested,
you're wearing red,
we're wearing red.
I could definitely,
like, hire you if you ‐‐
Barbara, you could be an elf, too.
How many followers do you have?
Well, probably 10,000
if you include Facebook
and Twitter and Instagram.
I mean, I don't tweet 'cause I
don't have opposable thumbs.
It's very hard to respond
to everyone all the time.
Where did you come
up with the idea of,
"I'm gonna put on a red onesie
and become a elf?" Just ‐‐
Well, I have some
wonderful friends that ‐‐
we were at a holiday party.
Everybody started joking
and calling me an elf all night,
and I thought it would be fun
to create a silly holiday card.
And then every year,
everyone was like,
"Are you doing that again?
Are you doing it again?" Oh.
And I just, you know, I
love it. I enjoy the holidays.
I think you're
great at it, actually.
Yeah, really good.
Yeah, you are.
It's very natural,
and it really works,
and I think it's
perfect. You are the Elf.
Holl: Thank you. You
need a social media partner,
'cause you're right,
you can't be everywhere.
Right.
But social media and technology
now could let you
build a brand online.
I wish that person was standing
beside you with a business plan.
But it's a personal
service business.
Every one has to be
done by you, Tommy.
Right. And now it's
just gotten to a point
where I need to expand
it so I can do more.
If you can have other
holiday characters
that you can have
exclusively to this app,
I can be able to expand it more.
But why haven't you done
it to this point, Tommy?
I honestly just don't
have the bandwidth.
You've got 10 months a year that you're doing
nothing! Is this your full‐time job, though? Wait.
This isn't my full time ‐‐
What's your regular full‐time job?
I work for a full‐service
global media agency.
Basically, I'm an E. A., so ‐‐
E.A. being executive
assistant. Correct.
I know this sounds
like such a bizarre idea.
I honestly think it's
bringing the holidays
into the next generation.
Actually, Tommy,
it doesn't sound like
a bizarre idea at all.
The challenge is the execution,
because you already
have a full‐time job.
But ‐‐ That's the problem,
and that's why I can't
get my arms around it.
So for those reasons, I'm out.
I get it. Apps cost
anywhere between ‐‐
O'Leary: Tommy, I
think you're terrific,
but I think this is
a deal for Barbara.
So I'm going to
step aside. I'm out.
Tommy, what are you
going to do with the money?
Well, you know, apps cost
anywhere between $60,000
and $300,000
depending on how
complex they are. Wow.
You really don't need
an app. Yeah, I agree.
I don't think you
need an app at all.
I think you just need
to, like, think of creative,
different, funny ways
in which to do TikToks.
I think you're funny as
can be and so charming.
It's just not a business to me.
You know, it seems like
a great, fun thing for you
that you can keep growing,
but for those reasons, I'm out.
Thank you. John: Yeah, Tommy.
I love you. I ‐‐
I love you, too.
We just met, but I love you,
too. I wish we could hang out
and go and have
some drinks, right?
I think this is a great
business for you.
You don't need
a partner for this,
and I think that you can
grow it from $15,000 a year
to $50,000 to $100,000.
You don't realize that you
can figure it out yourself.
So I don't think this is
investable for me. I'm out.
O'Leary: Tommy, there
are four Sharks out,
but all is not lost,
because you're wearing
red, as you said earlier,
and so is Barbara.
Tommy, there are
four Sharks out,
but all is not lost,
because you're wearing
red, as you said earlier,
and so is Barbara.
You could swap. I look
great in a onesie, by the way.
I really do. Okay, Barbara,
what are you gonna do?
It does everything, especially
the control‐top pantyhose.
I'm telling you.
Everything's been...
[ Laughter ]
What is most obvious
to me sitting here
is you've got everybody
falling in love with you.
You wear your
heart on your sleeve.
You're so charming,
and that's why I'm sitting
here and I'm interested
'cause I really want
to see you do well.
You lead with your heart,
and you make the
world a better place.
You're one of
those kind of guys.
We don't have enough
of them out there.
You mentioned working
with a cancer support group.
Why is that important to you?
So in 2013, I just had
a bit of a rough patch.
So I was diagnosed
with epithelioid sarcoma.
It likes to start at the ends
of your fingers, your toes.
So it's actually missing
my left pinky finger.
Oh, my.
Imerman Angels provides
free one‐on‐one cancer support,
so they were somewhere
that was a source for me,
like, during that time.
Would you be willing
to give away $25
out of every $50?
'Cause I don't think you're
motivated by money at all.
That's my sense of it.
If it would help
someone, absolutely.
Yeah, you would. Alright.
Well, I'm gonna
make you an offer.
I'm going to give
you the $125,000,
but $50,000 in cash
and $75,000 in loan,
and I'm going to take
35% of your business.
But I'd like half the sales
to go to a cancer
charity of your choice.
I think that's a
good idea, Tommy,
because they're
going to promote you.
What do you want to do?
I love you, Barbara.
Ahh. I love you back.
‐Congratulations. ‐Alright!
‐Yeah! ‐Alright.
You're wonderful.
You're such a sweetie pie.
Thank you. Thank you so much.
So darling, really. Thank you.
And you got great
eyelashes. And real!
Oh, I know you're
real. That's the problem.
[ Laughing ] Thank you.
[ Laughs ]
It's just such a
beautiful thing,
and this has just been
preparation meeting opportunity,
so I really thank you
so much, Barbara.
Congratulations, Tommy.
Well done. Thank you.
Congrats, Tommy. Thank you.
John: Congrats.
And he slowly...
[ Laughter ]
See you, Tommy. Well done.
Happy holidays.
I really thought that
towards the end,
it was a no‐go,
and Barbara just came
in, and it just seems like a,
for lack of a better word,
a Christmas miracle.
♪
Narrator: Next up is a way
to bring magic to the holidays.
♪
Hi, Sharks. I'm Chris Cirri.
And I'm Elisa Cirri,
and we're from
Wallingford, Connecticut.
And we are the founders of
Santa's Enchanted Mailbox,
here today seeking an
investment of $150,000
in exchange for 30%
equity in our business.
Writing letters to Santa
is a tradition as old
as Saint Nick himself.
But with the rising
cost of postage,
Santa has chosen our family
to create an exciting
and innovative way
to send your letters
to the North Pole.
With Santa's Enchanted Mailbox,
children everywhere can now
send their letters, lists, drawings,
and communicate with Santa
and his elves all season long
with real magic happening
right before your eyes.
Allow us to demonstrate
how our product works.
Simply insert the
magical envelope
into Santa's Enchanted Mailbox.
Close the door. Raise the flag.
Listen to the enchanted
sounds and chimes.
[ Holiday music playing ]
[ Laughs ]
And when the
mailbox is reopened,
your letter is gone ‐‐
magically! [ Gasps ]
Greiner: Oh, serious?
Whisked away to the North Pole!
But Sharks, don't
just take our word
for how much fun this new
family Christmas tradition is.
Take a look at some
of the excitement
from children around the world.
[ Laughs ]
Aaah!
What?!
[ Laughing ]
[ Squeals ]
Holy moly! Aah!
[ Laughter ]
So, Sharks, which one of you
wants a spot on
Santa's nice list?
Come join our family
in spreading Christmas
joy around the world.
How did you even
come up with this idea?
This is a family business.
My wife and I, we've been
married 12 years yesterday. Yeah.
Congratulations.
Thank you very much.
When our oldest, who's
now 10, was 3 years old,
we used to put out this
cardboard, decorative,
flimsy mailbox as a decoration.
And we said, wouldn't it be cool
if we could bring real
magic right in front of him?
Not something left
to the imagination.
So my stepfather‐in‐law
is a retired engineer.
He helped create the prototype,
then we secured two
granted utility patents.
Good for you. We
trademarked the name.
And then what, again?
How do we go about
bringing this to the masses?
So we decided to
take a licensing route.
Lisa and I started
writing anybody
that wanted to hear our story.
I pitched to anybody who
would take a meeting with me
to learn more about the product,
and we found a wholesale
Christmas‐based company
and signed a three‐year
licensing agreement.
Our licensing agreement
just came to an end.
This is our first year
out on our own, and...
And here we are.
Here we are today.
How much did they sell?
So, our first year, we
did $120,000 in sales.
Our second year, we
were pretty blown away.
A big box retailer
placed an order
for $1.7 million.
Whoo! Whoa.
And in our third year, 2020,
a lot of obstacles happened.
On a personal note, so,
my wife owns a hair salon.
Talk a little bit
about that. Yep.
With COVID, we were
forced to shut down,
and the schools were
forced to shut down.
So overnight, we became
a single‐income family
and so not having my income
pitching in to our home life,
we decided to go a little bit
more conservative on spend,
and that kind of
changed our route
of where we were
going with the mailbox.
Did it sell through at
the big box retailer?
We were told it underperformed
to their expectations.
At the same time,
they dropped the price,
and then they did start to sell.
How much did you make off
of the licensing agreement?
Like, what percentage?
In our first year, we did 4%
until we owned
the cost of the mold.
In the second year,
it went up to 6%
and remained at
6% in our third year.
And did they manufacture
this, or did you? They did.
So we are actually
currently utilizing
their manufacturer still,
but we're paying a markup
that comes with that.
You're buying
direct to the factory,
but you're going to have
to pay a markup on that?
We're paying a markup to
our former licensing partner
to utilize the manufacturer.
So you're using
their factory overseas,
but they made you
pay for the molds.
What do the molds cost?
We don't know the exact total,
but it was close to
$15,000 to $30,000.
We had two different molds made.
Wow. Yeah.
Cuban: This is a
lesson about licensing.
This is a huge lesson.
Are you hearing that, Kevin?
Well, actually, I wouldn't
have done it that way.
Greiner: Licensing is
okay, but it's a huge lesson
on the deal that you did.
Yeah. Right?
This was brand new to us, and
maybe there were some things
that we still scratch
our head about, but...
No, I mean, listen, don't ever
feel bad... you live and you learn.
To me, the best lessons
in life are your mistakes.
So let's talk about
the cost of this. Sure.
How much does it cost to
make. and what do you sell it for?
Right now, they're
at $17.25 all in
to get them here to the States.
We're selling them for
$49.99 on our website.
We know that we have to drive
down the cost of manufacturing.
You said they
brought the price down,
and it started to perform?
I believe you
said that. Correct?
Correct. Yeah,
exactly. Greiner: He did.
And what was the
magic price point
that they started to perform at?
$29? $24.99.
‐$24.99? ‐Yeah.
And you're bringing
it in right now at $17.
Correct.
This mailbox is,
it's a decorative mailbox,
and people were walking past it.
We had no way
to get the story out,
what it does,
and there was no
marketing budget behind it,
so we're really looking
for strategic partners
that can help market this.
I don't like
seasonality in retail.
I see this as a challenge
just to go direct‐to‐consumer.
It works. There's
magic. I get it.
But this one's
not for me. I'm out.
Guys, I'm kind of
in the same boat.
I mean, there's a
lot of complexities
for a simple business.
Your relationship with
your former licensee,
your manufacturing relationship,
particularly trying to
get something done
for this Christmas, right? Yeah.
So I mean, that's just a lot.
That's a big hill to climb. Yep.
So for those reasons, I'm out.
Alright. Thank you,
Mark. Thank you.
I think my challenge is that
you got to get that price down
to put it in retail. Yep.
And this is a product that
has to be demonstrable,
and it's very hard.
It doesn't have what
we call "hanger appeal,"
'cause you don't even realize
all the great things it does
when you're walking by.
So that means you have
to be converting heavy
on social media and online. Yep.
And I don't see
it there just yet,
so I'm out.
Alright, thank you
very much. Thank you.
I have five seasonal businesses
in the last three or four years,
and what's interesting to
me is those entrepreneurs,
I believe, work harder than
any of my other entrepreneurs,
because I have to push
in a very short window.
Mm‐hmm.
But I think your
price is way too high.
And yet, you're smart
people. You're so dedicated.
I think you ought to find
something else to do.
Okay. I don't think
this thing is gonna fly.
I'm out.
But wait, but wait.
And then there was one.
The Queen of Plastic
is still here. Yep.
We came here today
wanting to walk out of here
with a deal with
the right partner.
I mean, we'd be willing
to move the equity
to where it's beneficial for the
amount of work that we need.
First of all, I think
it's cute as can be.
I really do.
And I think kids will love it.
It's just spot‐on, to me.
So I think the
product is a hero.
My problem here is I
do think it's too high,
and it sounds like what's
going on with the factory,
that's really difficult once
you don't have control of it.
Yep. Yes. Very hard.
The other thing that I
worry about with this
is what you could get
that down to. Yeah.
If you had told me
what this could cost,
what we could do with it,
that would have
turned it for me. Yeah.
No, I understand. Yeah.
And so, unfortunately,
because I don't
know, I have to be out.
Well, guys, thank you
so much Thank you.
For the opportunity
to even be here.
Congrats, guys. Good luck.
‐Thank you. ‐Thank you.
♪
We came into this
very inexperienced
as entrepreneurs.
We're disappointed
that we didn't land the deal,
but we're also grateful
for the opportunity
and the words of wisdom
from five
really successful people.
Yeah, it was a lot of fun.