The Sharks Fight Over Unique Toy Business | Shark Tank US | Shark Tank Global

Summary

In this episode of Shark Tank, Nikki Pope pitches her business, Toy Guru, a toy subscription service that offers parents a cost-effective solution to declutter and keep kids entertained. For $100,000, she seeks a 10% stake in her company. With over 300 toys available, Toy Guru delivers curated toy boxes to families, which can be exchanged once kids get bored or outgrow them. After evaluating the idea, two Sharks, Kevin and Mark, make offers, ultimately agreeing to invest $200,000 for 40% of the business. With their backing, Nikki gains valuable connections and the resources to scale her idea.

Takeaways

• 😀 Nikki Pope is the founder of Toy Guru, a company offering a subscription service for toys aimed at keeping children entertained and helping parents manage toy clutter.
• 😀 Toy Guru works like Netflix for toys: customers choose a plan, receive toys in the mail, and can return them when their children lose interest or outgrow them.
• 😀 Nikki has 13 nieces and nephews, all under the age of eight, and is passionate about solving the problem of toy clutter for families.
• 😀 The company has over 300 different types of toys in its catalog, and each box of toys is worth over $200, but the company’s cost for shipping a box is between $50 to $90.
• 😀 Toy Guru offers monthly membership plans that range from $35 to $89, and members pay for the toy box subscription with a model that allows them to return used toys and receive new ones.
• 😀 Nikki’s company had a soft launch with 500 customers who paid $42 per month, and the company saw a waiting list of over 1,000 potential customers.
• 😀 The company’s break-even point per customer is about 2.5 months, and it costs around $64,000 in inventory for each $1 million in sales.
• 😀 Nikki is seeking $100,000 for a 10% stake in her company, with plans to scale through better marketing and exposure.
• 😀 The Sharks express concerns about Toy Guru’s financials and growth potential but are intrigued by the business model.
• 😀 Kevin O'Leary offers $100,000 for 35% of the company, while Mark Cuban and Robert Herjavec offer $200,000 for 40%, emphasizing the need for more capital and rapid growth.

Q & A

What inspired Nikki Pope to start Toy Guru?

Nikki Pope was inspired to create Toy Guru due to the quick boredom her 13 nieces and nephews experienced with their toys. She noticed that children often outgrow or lose interest in toys quickly, leading to cluttered homes, which sparked the idea for a toy rental service.

What problem does Toy Guru solve for parents?

Toy Guru addresses the issue of toy clutter and the short-lived interest children have in their toys. It offers a subscription-based service where parents can rent toys, and when their kids outgrow or get bored with them, they simply return them for new ones.

How does the Toy Guru subscription service work?

Parents sign up for a subscription plan on Toy Guru's website, choose toys for their children, and receive a box of toys shipped to their door. When their kids no longer want the toys, they return them, and a new box is sent with different toys.

What is the pricing structure for Toy Guru’s service?

Toy Guru offers several subscription plans, with prices ranging from $35 to $89 per month. These plans give access to a box of toys worth over $200, and the subscription fee covers the cost of receiving and exchanging the toys.

How does Toy Guru ensure the cleanliness of the toys?

Toy Guru prioritizes cleaning and sanitizing the toys. Each toy is carefully cleaned, sanitized, and shrink-wrapped before being sent out to ensure it is safe and hygienic for the next child.

What is Toy Guru’s business model for generating revenue?

Toy Guru generates revenue through monthly membership fees. Customers pay for the rental of toys, and the company ships the toys to them. The toy rental model also allows for upselling when a toy is damaged, offering it to the member at a discounted rate.

How many customers did Toy Guru have during its soft launch, and what was their monthly payment?

During its soft launch, Toy Guru had 500 customers, each paying $42 per month for a box of toys worth over $200.

How much does Toy Guru spend on inventory, and how long does it take to break even on a customer?

For every million dollars in sales, Toy Guru spends approximately $64,000 on inventory. The company breaks even on each customer in about two and a half months.

What is Toy Guru’s strategy for scaling its business?

Toy Guru plans to scale by increasing marketing efforts and gaining more exposure. The company has already seen success through word of mouth, with a waiting list of over a thousand customers. Additional capital and marketing will help grow the business further.

What is the significance of the offers made by the Sharks, and what did Nikki ultimately decide?

Kevin offered $100,000 for 35% of the company, while Mark and Robert offered $200,000 for 40%. Nikki ultimately chose Mark and Robert’s offer of $200,000 for 40%, as it provided more capital and expertise in internet logistics and toy industry connections.