The Grindstone has partnered with CNBC to promote Shark Tank Tuesdays — with episodes airing on the network every Tuesday — and the season premiere of The Profit on February 25th.
When CNBC asked us to partner with them to promote Season 3 of Shark Tank on #SharkTankTuesdays, the first thing that came to mind is the Lollacup. You might recognize the Lollacup from the shelves of your local childrens store or online purchaser (It’s available at Diapers.com, Amazon and Barneys of all places).
The product is one of the many items that won a hat trick of affection from all the businesspeople on the panel of Shark Tank. But if the inventors had listened to the sharks, you may never have heard of their product.
On episode 312, parents Mark & Hanna Lim came on to show the judges their spill proof sippy cup, which has a weighted straw and a cute little bird design. Its distinctive design is part of its draw and a big reason why many parents I know have spent over $15 on one sippy cup.
Lollacups retail for $18.00, and the first thing Kevin O’Leary wanted to know was how much cheaper the product could be made if it were produced overseas.
It seemed like a slamdunk to produce it more cheaply and sell competitively with other sippy cups that are around the $5 price point. But the Lims refused. Something that moms know that Sharks may not is that moms and dads today are willing to pay a little extra for a product that works. ESPECIALLY if it is made out of reliable materials.
It only takes one instance of your child almost choking on a defective toy or breaking some cheap piece of construction for parents to get obsessive about where and how the prodcuts they buy are made.
When you go to order a Lollacup from Lollaland.com, one of the first things you will see is “made in the USA, BPA-free and phthalate-free” The site goes on to state that lollacups are “made in the USA: all parts are manufactured, assembled + packaged in the USA, so you can be assured of its quality.” This minor fact allows the company to sell its product at a huge markup compared to other sippy cups. When the Lims went on the show, they were producing the cups at a cost of cost of $4.50 and selling them wholesale for $9. That is a lot more than the average sippy cup retails for once you factor in retail pricing, but this is great evidence of how important it is to know your market.
As you can see from a quick search on YouTube, there are plenty of parents willing to pay that markup (and give the company free advertising in the form of positive video reviews).
When the couple went on SharkTank, they had sold $40,000.00 of cups from 50 retail stores. When they came back in Season 4 to update the audience with their progress, they’d sold over $300k of their product, which is now available in over 300 stores.
This is proof positive that while business experts may be able to provide a lot of advice to small business owners, you still must consider every piece of information you learned and evaluate all opportunities, not just the experts’ advice, before jumping to a conclusion and accepting an offer.
Join us and watch Shark Tank Tonight starting at 8pm EST! Tweet us with the hashtag #GrindstoneSharkTank and your reaction to the episode to win an awesome CNBC Prize Pack Giveaway! 4 of you will win! This includes:
- Shark Tank branded Water Bottle
- Shark Tank T-shirt
- The Profit ceramic mug
- The Profit branded Pen
- $50 Gift card to put toward business expense
- USB drive