Next up is what the entrepreneur Believes is a solution to an unsightly Holiday problem [Music] Happy holiday sharks my name is Ryan Kenny and this Christmas I'm asking for A hundred thousand dollars in exchange For 20 Equity of my company the Christmas tree hugger this little guy Right here is the Christmas tree hugger And we're here to fix the fake now what Do I mean by that well every year Millions of artificial tree owners put Their trees up and decorate them making Them look as perfect as possible but Almost every artificial tree has the Same Ugly secret down below [Music] This fuzzy looking green eyesore looks Nothing like a real tree and takes away From all that holiday magic but with the Christmas tree hugger you can go from Faking It To making it like that and you can even Use it to hide your messy cords just run Them through the hugger under the skirt And they're gone it's as easy as putting On an ornament we have our classic Brown Bark we have birch bark too all of our Christmas tree huggers reverse the candy Cane so in seconds you can go from Classy to crazy and make your tree more Fun festive and a happy thing to look at
During the holiday so in the spirit of The holiday season let's just hug it out And give artificial Christmas trees the Christmas miracles they deserve and I'd Like to hand out some samples please yep A little stocking too thank you sir You're well appreciate it foreign Thank you Ryan So Ryan do you also have a real job yes I have a real job I'm in advertising I'm An art director so I'm a pretty creative Guy how did you come up with the idea Well my wife and I bought our first Artificial tree and everything looked Pretty good but then we kind of noticed That fuzzy green pole at the bottom and We're just scratching our heads you know How come no one's ever made that look Better it looks nothing like a tree so I Made a prototype for my house and my Wife loved it and her friends loved it And they asked me to put some online and Start selling a little bit and then I Just started having fun with it I was Like you know what I think I'm onto Something why would anybody want this Who cares well people do care actually Really yeah yes well if you have great Sales then you prove him wrong yeah so We've been doing this for a year and a Half and so far our sales are fifty Thousand dollars wow what does it cost You to make one it cost us a dollar 37 With packaging everything packaging yeah
We sell it for 17.95 mostly online uh We're online we're actually with QVC as Well how many did you sell on QVC uh we Went on for the Christmas July sale and The one o'clock in the morning managed To sell 1000 of them in five minutes Good for you that's not it that sounds Like you back did they invite you to Respect to your product yes we're Talking about going back closer to the Holidays how many did they reorder well We still have the ones that are in stock So they have they're going to see what They bring in they brought in 5 000 Units did they reorder or they're just Gonna air them again well I think we're Gonna air them again but right now it's QVC customer top rated too and it's been Getting five star reviews and was Surprised when QVC 1795 as well or was It low there's something for 20. oh That's even better so you made twenty Thousand dollars on QVC in five minutes At one in the morning yeah that is all New to me that was my first time ever Doing anything like that it was really Fun what else have you sold and what are The plans for this year last year we did 12 000. and was that online so I made a Cold call right away to Kroger and my First call of the lady she loved it and She wanted to put it in the store so we Put it in Kroger and how much was that Order for that order was for 130 stores
And they ordered a 1 500 units they have A real lawyer they sold 40 of the units Are they going to reorder it again They're not going to reorder it again Why is that a good story well it's a Good story because we're learning from Our mistakes and why aren't they going To reorder Ryan because it doesn't sell It didn't sell through it didn't sell Through well enough it's a grocery store It's probably not the perfect place for The product but it wasn't wrong Because it's an opportunity right right What will revenues be this year if we Sell through the stuff that we have We're looking at 220 000 in sales and How much do you think you'll make on That I think we'll probably make around 110. I personally don't see this as a really Big problem I like to invest in things That fit to a broad Mass audience it's Just not the right investment for me so I'm sorry I'm out Give your time Ryan's starting a Business one of the hardest things you Can do I admire you for that but Inevitably for me to invest I have to Believe in the product I I just don't Like the product I'm out Thank you I have to compliment you on one thing That we don't hear very often you made a Sales call yourself walked into Kroger's
You got yourself a big order good for You it only sold through 40 just keep Making those cold calls 10 more orders At 40 adds up to a lot of money my QVC Order was from a cold call well I'm just Kind of going out there and just let me Tell you what a great example just that That's awesome man that's awesome so let Me say gently I'm out thank you for your time I don't Think Barbara's done you any favor I'll Give you encouragement to go on the Market has spoken it doesn't care about This product the reason you're going Back on QVC is because they want to get Rid of their inventory the reason Kroger's didn't reorder it nobody bought It the market so I don't want to offer You any encouragement I want to tell you To take this behind the barn and shoot It so that it leaves time for you to do Something else ignore him this product Is a dog ignore him what do you have to Say to that you're the first people who Have ever said that every person I've Showed this to every person They are definitely interested here's The reality you picked up the phone you Called QVC you sold twenty thousand Dollars worth and you picked up the Phone you walked into Kroger's and you Sold your product that's why you're in The right spot and he's an idiot I don't Agree with Kevin but at a certain point
You got to Pivot Look what was your sales price to Kroger Six dollars six dollars you made four Dollars and seventy seven cents each Right and you sold how many there over a Thousand so you made almost five Thousand dollars right now walking in The door you haven't spent that much Time in your entire life Kevin somebody Spent some time develops a product takes The initiative sells them in this case Twenty thousand dollars worth you sold It for me to say just once this is a dog It doesn't matter if we give you Encouragement or not you're making a Smelly dog he's an idiot two deals that Are that are they're not POS yet for Next year but they're they're large I am Out but I'm the only shark willing to Tell you the truth one more time Dog It's really a nice product the solution The art director and you has come out Right and it's a well-designed package I Like the concept I just see it as a Product not a company and so for those Reasons I'm out Thank you my Christmas gift to you is The truth Ryan yeah I've never quit Anything in my life I'm not good for you And this is not something I'm going to Quit go crush it Ryan keep on making Money [Music]
Like I said I do not give up I'm in Advertising we hear stuff like that all The time you gotta have thick skin That's part of the secret you gotta love This hustle but seriously Robert Anybody who could take a piece of fabric Put two strips of Velcro on it walk into A store and make five thousand dollars Agree you have promoted do it again and Make another 5 000. [Music] In San Diego California with my wife and Three kids The holiday season in our house is Fantastic it's full of love presents Tons of good food and laughter Looks great but um maybe a little no in Your life my wife celebrates Christmas And I celebrate Hanukkah my product is a Solution for the thousands and thousands Of interfaith families that live in the United States and it Bridges the gap Between ho ho ho and Dreidel Dreidel Dreidel come on guys get our orders out I've been selling my product now for Three years I've already put a second Mortgage out on our house to make this Dream come true we can't keep putting Money into this business ourselves Without an investment from the Sharks I Fear that we just won't make it This product is important to me because It brought us together as a family and To be able to provide that same gift to
The millions of interfaith families that Are out there would just be a wonderful Achievement in life for me [Music] Foreign [Music] [Applause] Y and I'm from San Diego California my Company is One Life Products and I'm Here seeking fifty thousand dollars in Exchange for 15 percent of my company Sharks Christmas Is the Most Wonderful Time of the Year a Time when Interfaith families can play Spin the dreidel while kissing under the Mistletoe wouldn't it be wonderful if Interfaith families could find a way to Truly capture the spirit of Christmas Well Mazel Tov because now they can with The Hanukkah tree topper It's the perfect pairing between all These holiday traditions and hey doesn't It look great on top of a Christmas tree No more debate between candy canes or Chocolate gelt or Santa vs Hanukkah Harry you get the best of both worlds With the Hanukkah treetoper together I Know we can take the Hanukkah tree Topper to the next level and make lots Of shackles doing it so what do you say This holiday let's reach for the star And sell like meshuganas So I want to make sure we understand This right
Is the product simply the star to put on Top of the tree yes it is can we see Them Maury absolutely who would like to See them here Oh there it is how many of these have You sold I have sold approximately 12 000 of that item right there where are You selling them Maury currently we are Selling in a big box retail store as Well as online and in a flight magazine What do you sell them for sell those for 19.99 they cost two dollars so we have About a seventy percent wholesale margin A 90 retail margin those are uh higher End uh we're at about 35.99 and about Right now nine dollar cost because it's Our first run and we expect how much You've made on your 12 000 units our Gross sales have been 150 000 in the Last 12 months no in the last three Seasons Whoa This Warrior baby that's not a lot of Sales oh well come on you gotta step up Here again Let me tell you something let me tell You something we've got massive Potential First of all the answer to existing Sales is potential oh no this is this is Real or could it be Mori that there's a Little market confusion going on here Nope but Mori sales are poo poo [Music]
So here are the stats a national survey Was done that said that nearly 50 Percent of all Jewish people in the United States have married somebody of Another faith So we feel that there is a target Audience of probably somewhere in the Neighborhood of a million to a million And a half households for this one item The retailer that we're in we're in About uh 200 almost 200 stores which Retailer is it Bed Bath and Beyond is That the only retailer you're in in Brick and mortar yes what percentage of Sales are online and what are in retail I'd say 70 online 20 in-flight magazine And the rest with stores Maury what are You going to use the money for number One new product design we want to get Our own website up and running so that We're not relying on on sites and Commissions and things like that I need Some fulfillment space because we Started not being able to park one car In the garage now it's two cars in the Garage from home Everything 100 how much Money have you put in about close to 130 000 of our own money oh no more one of The challenges about this it's a Seasonal business I hate seasonality Because you know you have one shot you Either make too much you make too little It's always the same problem every year That's never going to change I was
Waiting for you to bring that up and What's your answer my answer is number One first and foremost for right it is Seasoned but number two you're making a Deal with me and I work 12 months out of The year All right there's another problem when a Family buys this it's once they don't Need to buy it again subset of a subset Of a subset Market seasonal purchase one Time in your life only if you've Described hell on Earth that would be it No I think I'm sorry I have to disagree In my heart I know we got something Special and that is and it's it may be a Niche but it's all well let me tell you What a small is okay so I know it's Small it's your sales Thank you well that's that's numbers Don't lie my friend well let me explain What's coming I've been invited into the Largest mass Market Big Box store one of The two largest drugstore chains the Largest toy store chain as well as one Of the largest discount clothing chains Invited means to show it or you have a Purchase order Invited means to show it My friend Maury I'm out I understand You know I can't believe I'm going to Say this But I actually agree with Kevin
And I don't think you have a big enough Market for this to become something Really scalable and a huge business for You and so for that reason I'm a Lori I'll be honest with you I want to Do business with you And more shoes out so look at that all Right let me tell you this you're Working in a full-time job and you're Working basically out of your garage the Biggest challenge that I've ever Experienced with all my Shark Tank Companies has been getting out of the Garage and getting into an office or Whatever it may be and growing out of That home-based is what I want I don't expect you to run my business What I want is your expertise behind you Know marketing social search engine Optimization look it's what you want but You're not set up to do that right now And so for that reason amount I think you've done a good job here but Three years later you're at sixty Thousand dollars but I haven't even Broke brick and mortar yet For that reason I'm happy Damon You know I did a deal with uh Uh a rabbi Rabbi mosha Um sound Bender yep Are you gonna make an offer in this uh There's no way this is going to be a
Multi-million dollar business ever no [Music] [Music] Four sharks are out Eamonn is Maury's last chance at getting A deal Are you gonna make an offer in this uh There's no way this is going to be a Multi-million dollar business ever no I Don't want Scrooge to interrupt my uh Thought process here Yeah Christmas and Hanukkah are about Faith and that's questioning your Judgment that's all I like that there's Product extension if he has that he may Have some of this stuff you know what I I think I want to take a gamble on you Uh fifty thousand dollars for thirty Five percent is my offer 35. Wow Worry why are you even thinking about That I'm not looking for control I'm just Looking for a happy Christmas 35 Can I ask is it e-commerce that you can Bring is it retail I mean You don't want to have an oh no moment This is a licensing place okay and this Is to do bulbs and socks and other Things as well as the primary product No more do me a favor just Hopefully you'll make the right decision
And I'd counter and do something crazy Because I really want to do the deal [Music] And your answer is Maury My answer is Kiss me All right This is for you thank you so much thank You [Music] Hey Cameron you look like a q now That's scary Hi honey how are you we made a deal You made a deal made a deal it's a dream Come true this is a winning lottery Ticket this is unbelievable Hi babies To me this is showing my kids How important it is not to give up Next into the tank is a duo with a new Take on a favorite Christmas staple [Music] Hi sharks I'm Evan Mendelson and I'm Nick Morton our company is Tipsy Elves And our slogan is not your mama's Christmas sweater we are seeking a 100 000 investment for five percent of our Company before Tipsy Elves Christmas Sweaters were old they smelled terrible And you could only find them at your Local thrift store Tipsy Hills recreates Those Christmas sweaters of the past With fun witty high quality Christmas Sweaters that the whole family can enjoy
And they fit great too but don't take it From us sharks see for yourselves Welcome to the Tipsy Elves fashion show [Music] First we have Greg Greg is wearing our Runaway sleigh sweater where Santa Sleigh gets the best of him he's also Wearing our popular Christmas bomber hat Next up we have adri she's wearing our Elf sweater She's also wearing our belief fanny pack Next we have Brad Brad is wearing our Popular Hanukkah sweater next up we have Nikki Nikki is wearing our bucktooth Rudolph sweater dress oh that's cute She's also wearing a reindeer animal hat Foreign Ly not least we have Andrew Andrew's Wearing our reindeer Matchmaker jumpsuit Which is brand new this season zip it up And watch them kiss All right Sharks so you've seen a little bit of What we have to offer our beautiful Models here are going to be handing out A sweater to each one of you that we've Picked out along with our bomber hat Thank you thank you the idea behind it Was that there were a bunch of Tipsy Elves up in Santa's you know making These sweaters you guys look great now It's time to get down to business this Stuff is hideous Why don't you give us some sales numbers
We started in 2011. in 2012 our sales Were 862 000 which gave us 1.35 million In sales in those two years wow a little More than half of our orders came from Amazon this year we started dabbling in Wholesale for example one major retailer Urban Outfitters placed an order with us I own the ugliest sweater company in History kuji yeah the Bill Cosby they're Ugly no trust me they're really ugly Um and the challenge we have is the Returns so how much is each one cost to Make 12 11 40. what do you sell them for Sell them for 65 so wow wow what made You say one day I'm gonna make ugly Christmas sweaters Evan was a lawyer and it wasn't a job That he wanted to pursue I had a Background in SEO so I started doing Internet businesses like mostly Informational websites where I'd make Money off ad Revenue I saw there was a High demand for Christmas sweaters based On search volume why get into the Wholesale retail side of it doesn't that Just complicate things and increase your Overhead Once you take a wholesale account you've Got to support them you've got to Interact with them you've got to make Their buyers happy you got to talk about Next season at our core we're an E-commerce site why risk it and go into A new area where you're uncertain and
You've got guys like Damon who know the Stuff inside and out competing with you To Mark's point when you come over to Our side you're going to have to be able To take back inventory you're going to Have to have a warehouse the size of you Know two blocks it's going to be a lot Sure everybody's echoing the same thing You shouldn't take this to retail in my Opinion we're pursuing the online Strategy as much as we can retail is the Drug that everybody goes for they look At that order and they say wow I got to Fill that we have retailers coming to us And it's just hard for us to turn it to Turn it down it sounds like what you Guys are good at is SEO and selling Online but I'm getting the sense that You think that there's a ceiling there Yeah we're pretty maxed out on SEO we 2011 we were number one on ugly Christmas sweater ugly Christmas Sweaters do you guys do this full-time I Quit last year to focus on this Full-time and I was getting paid about 170 000 a year plus bonus so it was a Wow to wake up one night it's got 170 000 job you say Ugly Christmas sweaters I mean I'm a Risk adverse guy it's a testament to to Me believing in this like I I really Wouldn't block away from 170 000 job on A on a win but we know the sweaters are Ugly but also the valuation is ugly why
Don't you try and defend why this is Worth two million dollars The reason our evaluation is at that Point is last year we you know we had 862 000 in sales it would have if we Would have not run out we would have had A little over a million well I'm looking At it saying you have to give a discount For the fact there's risk in the Seasonality yeah you know what don't Ever listen to Kevin on that stuff he's The worst evaluations Your problem is not valuation right if You're going to grow really yeah because Some of us know how to grow past Evaluation some people Look Backwards Some of us why don't you give them a Four million valuation but it doesn't Matter the valuation doesn't the issue It's where you can go but the problem I Have is that you really haven't Explained how you're going to grow I Know you guys hate when it sounds like People are you know getting away from Their core competency it probably sounds Like that but it's really easily Duplicating what's worked here and from Our point of view we're maxing out Everything we can possibly think of when It comes to these and that's the problem Trying to do everything is what scares Me significantly and so even though I Think you've got a good business a Growing business
[Music] I think you're on a really good start But there's other companies that do this There's nothing unique I'm out [Music] I'm gonna make you an offer Here's how it works I'm going to give You the hundred thousand dollars I want Two dollars a sweater until I recapture My 100K then it drops to one dollar a Sweater and perpetuity what Equity are You taking zero zero active and would You be involved in the business or would You mostly just be treating it kind of As like a source of capital I work with All my entrepreneurs and I do everything I can to optimize because our incentives Are aligned I'm about money So I'm actually shocked Scrooge has made You guys an offer do you like his offer I'd love to hear if if there's any other Offers on the table but we're definitely Interested [Music] So it's an interesting off from Kevin It's actually not that bad enough or It's bad but not that bad I love the Fact that you left a 175 000 a year job To do this because that tells me you're All in my friend and I love that level Of commitment to it there's no going Back for you yeah I don't have a problem with the
You know I think when you start out you Try everything so here's my offer two Hundred thousand for ten percent Damon's being very quiet so we'd also Like to see it yeah yes he is what are You doing [Music] Robert hundred thousand ten percent of The company Kevin two dollars I don't need your Money back so you get a hundred thousand Dollars back and then one dollar in Perpetuity yes that's correct Damon And you're going to do what You're the clothing Man yeah Um [Music] Two sharks are out Nick and Evan have Two offers on the table from Robert and Kevin but the clothing expert Damon is On the fence oh that's hard I'm really I'm falling in love with the Product and the guys I just I still have Inventory of ugly sweaters exactly That's the challenge you'll be selling Those to me My challenge is exactly what Mark has Been saying this is very seasonal you Guys are doing great you guys are doing What I cannot do online SEO you're going To go to these big guys after they're Full of you guys they just let it go and It's not we're not relying on their
Business it's just adding right but if You're not relying on their business Then I can't be of service to you you Guys can go to 5 and 10 million without Anybody but you can help add to what We're doing on the online side with your Distribution channels and I can't add to That you guys are already doing that That's what he's a retail King so if You're going to the retail store I can Make I can make goods for you but you're Making the goods at the same price so I'm out So you have two offers on the table you Basically have one for me that doesn't Take any of your Equity away I give a hundred thousand dollars you Pay me two dollars a sweater until I get My Capital back and then one dollar in Perpetuity or you have an offer from Robert which was a hundred thousand Dollars for ten percent equity Evan I'm just really investing in you Guys I think that you can build this up I think the college Market is going to Go huge for you guys I want to Participate in the company Kevin just Wants to suck money right off the top You know in the spirit of Christmas I'm Not stealing her Equity like Robert is There's a lump of coal over there Mr Wonderful We appreciate your offer but Robert we Accept your offer excellent guys thank
You Excellent yeah congratulations Congratulations congratulations great Job
