Shark Tank US | Kevin HATES Snow In Seconds Product

Summary

In this pitch, Jonathan from Minnesota presents 'Snow in Seconds,' a product that turns powder into fake snow when mixed with water. Seeking a $50,000 investment for 10% equity, he reveals his business has earned $2 million in sales over 15 years but struggles with low profits and a seasonal market. Despite the challenges, Jonathan's enthusiasm wins over Barbara Corcoran, who offers $50,000 for 33% equity, bringing her experience with seasonal businesses and connections to help grow the company. Despite mixed reactions from the other investors, Jonathan accepts Barbara's offer, excited for the future.

Takeaways

• 😀 Jonathan pitches 'Snow in Seconds,' a product that creates realistic artificial snow by adding water to a powder.
• 😀 The company seeks a $50,000 investment for 10% equity, and Jonathan emphasizes his deep knowledge of snow from his home in Minnesota.
• 😀 'Snow in Seconds' is marketed as a fun way to bring the magic of snow indoors, ideal for those living in warmer climates or for holiday parties.
• 😀 The product is safe, cold to the touch, and used in movies, showcasing its versatility and appeal.
• 😀 Jonathan has been running the business for 15 years and has sold $2 million in total revenue, with $4 million in sales last year.
• 😀 Despite the strong sales numbers, the company only made $4,000 in profit last year, which raises concerns about the business's profitability.
• 😀 The product's seasonality is a major limitation, as it only sells well during colder months, reducing its potential for year-round sales.
• 😀 Jonathan highlights the challenges he faced, including a missed shipment to major retailers like Kroger and Fred Meyer, which resulted in the products being returned.
• 😀 Barbara Corcoran sees potential in the business, especially given her experience with seasonal products, and offers $50,000 for a 33% equity stake.
• 😀 After some negotiation, Jonathan agrees to Barbara's offer, valuing her expertise in expanding the product into broader retail markets, especially during the holiday season.
• 😀 Several Sharks, including Mark Cuban and Kevin O'Leary, reject the deal, citing concerns about the company's low profit margins, limited market, and seasonal nature.

Q & A

What is the product that Jonathan is pitching?

Jonathan is pitching a product called 'Snow in Seconds,' which is a powder that, when mixed with water, instantly turns into fluffy, realistic-looking snow.

What is the main ingredient in 'Snow in Seconds' and what is its primary industrial use?

The main ingredient in 'Snow in Seconds' is sodium polyacrylate, a chemical primarily used in agriculture to help soil retain water.

How does 'Snow in Seconds' compare to real snow?

The product looks and feels like real snow, but it does not melt. It’s cold to the touch and is safe to use in various applications, including in movies.

What is the cost to make the product, and how much is it sold for?

The cost to make the smallest product is $0.72, and it sells for $4.99. The large version, which makes 10 gallons of snow, costs $4.20 to produce and retails for $24.99.

What percentage of the product’s sales are bulk sales, and what type of customers buy it in bulk?

50% of the sales come from bulk sales, which are typically bought by customers in industries like movies, who require large amounts of snow.

What was the issue that Jonathan faced with retail distribution at Kroger and Fred Meyer?

The product was initially sold in 1,500 stores, but due to a missed shipment in the third year, the retailers returned the product, and the business lost the opportunity.

How much revenue did Jonathan's business generate over the past 15 years?

Jonathan's business has sold $2 million worth of product over the past 15 years, though he made only $4,000 in profit the previous year.

What were the main criticisms of Jonathan's business from the investors?

The investors criticized the business for being seasonal, having low and inconsistent profits, and for distracting Jonathan from his other more successful business ventures.

What is Barbara's offer to invest in 'Snow in Seconds,' and what percentage does she want?

Barbara offers to invest $50,000 for a 33.3% stake in the company, seeing potential in the product despite its seasonal nature.

What other business experience does Jonathan have aside from 'Snow in Seconds'?

Jonathan also runs a sports technology company that focuses on loyalty programs and digital payments inside stadiums. This company generates significantly higher revenue than his snow business.