Adjustable Ski Pole Company with a Clever Name | Shark Tank US | @SharkTankGlobal

Summary

In this episode of Shark Tank, Kelly and Christina from Yardell pitch their innovative magnetic ski poles, designed to make skiing more enjoyable and functional. The poles feature modular designs, with customizable colors and a magnetic feature that makes carrying them easier. Despite mixed reactions from the sharks, the duo impresses with their strong sales and growth potential. After some negotiations, Kendra Scott offers a deal of $250,000 for 10% equity, alongside a $5 royalty per unit until $300,000 is recouped. The pitch highlights the power of creativity and problem-solving in creating unique solutions.

Takeaways

• 😀 The founders, Kelly and Christina, are from San Francisco and are seeking $200,000 for 10% equity in their company, Yard Sale.
• 😀 Yard Sale is a company that aims to revolutionize ski poles with a magnetic design, making them easier to carry and store.
• 😀 The magnetic ski poles are modular, allowing customers to mix and match colors for a custom look.
• 😀 The target market for Yard Sale is recreational skiers, positioning the company as a lifestyle brand for this group.
• 😀 The name 'Yard Sale' refers to an insider skiing term for when skiers fall and lose their gear, tying the brand to a fun and memorable experience.
• 😀 Kelly and Christina both have strong backgrounds in product design, with experience at MIT, Apple, and venture capital.
• 😀 Over 60% of Yard Sale's customers customize their ski poles, indicating strong adoption of the product's personalization feature.
• 😀 The poles are priced at $139, with a production cost of $30 and a 75% profit margin.
• 😀 Yard Sale's first month of sales reached $100,000, and they are projected to hit $300,000 by the end of their fiscal year, with a forecast of $2.1 million for the next year.
• 😀 The company launched as a direct-to-consumer brand but plans to expand into retail, with interest from major retailers like REI and Decathlon.
• 😀 During negotiations with the Sharks, they received offers that included equity stakes and royalty agreements, with Kendra ultimately offering $250,000 for 10% equity and a $5 royalty until the founders recoup $300,000.

Q & A

What is Yard Sale, and what makes their ski poles different from traditional ones?

Yard Sale is a company that designs innovative ski poles. Their poles stand out due to a magnetic design that allows them to stick together, making carrying and handling them easier. They also offer modular customization with five eye-catching colors, targeting recreational skiers.

Why did the founders choose the name 'Yard Sale' for their company?

The name 'Yard Sale' refers to a term used in skiing when someone wipes out and loses their gear, making it scatter like items in a yard sale. The name originated from the founders' personal experiences with yard sales while skiing.

What problem with traditional ski poles did the founders aim to solve with Yard Sale?

The founders were frustrated with traditional ski poles being clunky, easy to drop, made of cheap materials, and lacking in style. Yard Sale poles aim to make skiing more convenient and enjoyable through better design and innovative features.

What is the price range for Yard Sale poles compared to regular ski poles?

Yard Sale poles are priced at $139, which places them in the upper-middle range of the market. Traditional ski poles range from $50-$60 for basic models, while more advanced poles are priced higher, but none offer the features of Yard Sale poles.

How much have Yard Sale's sales grown since their launch?

Yard Sale launched 6 months ago and achieved $100,000 in sales in their first month. By the current fiscal year, they've reached $220,000 in sales, with a forecast of $300,000 by the end of the year. They expect to reach $2.1 million next year.

What is the company's current distribution model, and are they planning to expand?

Currently, Yard Sale sells their products exclusively through direct-to-consumer (DTC) channels, primarily online. They are planning to expand into retail next winter, and they've already attracted interest from large retailers like REI and Decathlon.

What is the feedback from investors about the company, and what offers were made?

While some investors were skeptical, with a few not being passionate about skiing or the product, others were more enthusiastic. Kendra, for instance, was impressed with the product and offered $200,000 for 10% equity with a $5 royalty per unit until $300,000 is recouped.

What is the main concern raised by investors about the product?

One of the main concerns was about the name 'Yard Sale', as it carries negative connotations and doesn't align with the premium and innovative nature of the product. Some investors felt that the name could be a deterrent for certain customers.

How did the founders handle the concerns about inventory and sizing for their poles?

Yard Sale offers ski poles in five sizes, but to address inventory challenges, they are introducing adjustable poles for both kids and adults. This feature will help accommodate growing children and reduce inventory complexity.

What was the unique offer made to Kevin, and why was it notable?

Yard Sale made a unique offer to Kevin, proposing $200,000 for 5% equity with a $3 royalty per unit until the $200,000 investment is recouped. This was the first time a company had offered Kevin a royalty in addition to equity, which set their pitch apart from others.