Zip-It on Shark Tank
Jennifer McDonald and her sister, Hailey Carr, have come to the Shark Tank representing Zip-It bedding. They are seeking an investment of $75,000 in exchange for a 20% stake in their business. Jennifer starts with a simple fact – three billion children live on this earth, and none of them seem to know how to make a bed, or much less want to. Fortunately, with Zip-it, the moms would no longer have to see their children’s messy, ugly beds with pillows and blankets strewn about. The Zip-It is a product that will revolutionize the bedding industry.
Zip-It is the world’s first hybrid of a sleeping bag and conventional bedding set. The two mom-sisters have brought with them Ava, who is a family friend of theirs; Ava slides into bed, and Jennifer demonstrates. Once your child is in bed, just zip the zipper which connects the top comforter to the fitted sheet, the blanket acts as one piece. The children cannot kick off their covers, and when it’s time to wash your bedding, simply lift up the fitted sheet part. Simply wash the fitted sheet and bed as one – that’s it. And, Jennifer continues, the kids are absolutely loving the zipper and side pockets because you can store things like baseball cards, game controllers, and flashlight cards. But, Hailey says, her own personal favorite part is that if a child can zip the zipper, he or she can now make their own bed – and it works just like a sleeping bag, so they’ll want to. All the kids have to do is zip it, and the bed is made! With Zip-It Bedding, the moms and a combination of the Sharks can take over the bedding industry.
Robert is the first to ask questions, which doesn’t surprise me since he has younger children of his own – he asks if it zips all the way around, and Lori actually gets up to look at the product from a full 360 degree view. The zipper stops at the end, but will go all the way down by the foot. There are actually three versions of the product, one version of which is a bunk bed variant. So, they bring forth a gigantic piece of railing which serves as an example since you can’t actually zip the zipper with the railing in the way, which most bunk beds do have railings. To respond to this, the zipper is a longer string and can be maneuvered around easier. Mark comments that when he was growing up with a younger brother, Zip-Its would have been absolutely perfect for “dutch ovens” (where you fart and… pull the covers up)
Lori says that she wants to ask the natural questions – is the Zip-It patented? The patent is pending. Kevin asks about sales; so far they have sold 1,000 units in just a test market and sold out quickly. They sold the Zip-Its mostly online, and through the use of social media and word-of-mouth, they sold most of their units; however, the mom-sister team also went and created an infomercial for DRT, which means Direct Response Television. Kevin returns to the numbers – in a thousand units, they grossed only $7,500, and with the expenses they had accrued, they actually took a loss. However, they insist this was just to test the market – each Zip-It was sold for $59.99 for a twin, or $69.99 for a full bed. Each costs from $24 to $20, where the full-size Zip-It will command $24. However, the Sharks are surprised that the costs are so high, but Jennifer reveals that they have collaborated with a product designer with 20+ years in the children’s bedding industry, and this person is hooking them up with one of the largest bedding producers.
However, so far, the team behind Zip-It was only licensing the functionality of the blankets out and not actually making full money. This manufacturer is looking to purchase an order of 50,000 units, with a 4% local and 6% international revenue coming to them. So far, they have received a term sheet for the deal, but then…. They jumped out of the deal. Even Barb mentions that getting that far would be everyone’s dream, and Jennifer continues on; they flew to New York, and these people they met with wanted to pay for the entire Direct Response campaign, so the two moms worked with them as much as they could and brought in a broker. When the contract came, the moms said they wanted to try to get it on the shelves in time for Christmas 2013, but this was more than 5 months ago from the airing of this Shark Tank episode. Kevin remarks that the licensing deal is very close to an interesting opportunity, and he thinks that he could get it up from 4% to 6% local. However, the moms say that with their investment into the direct response television, the lower risk would be worth it. Lori, as the “Queen of QVC,” says that that is actually a huge red flag. Nine out of ten Direct Response Television campaign fails, and to her, the Zip-It is not worth a Direct Response Television campaign.
Barb asks if they liked the people that they met with, but Jennifer says that the people in the meeting just didn’t have the passion behind the project. Barb mentions that is like “leaving your child in the wrong babysitter’s hands,” but Robert mentions that these people are doing all the distribution and the legwork and are pushing to get the product out onto the market, and are on the forefront of moving the product forward. However, Jennifer says she really would have liked for the product to be on the shelves yesterday, and Robert says it’s simply not. Hailey says that they are still worried about being the first to the market (ever hear of the First Movers’ Advantage, Hailey?), but Robert says that the bedding company would know the marketplace and be able to accelerate the product faster than the two moms could do on their own. Robert continues on, saying that they cannot start at square 0 and mark their steps faster than the bedding experts could. However, Jennifer and Hailey say that they feel like they lost most of the control, and this is a long-term product for them and they want to revolutionize the bedding industry.
Kevin speaks up, saying that when such an expert in the industry sees something and licenses it, the moms should have went for it – he knows this since he is a license guy himself. Kevin says he loves licensing and is the king of it, and he thinks he could have taken the licensing all the way to 7% but since he knows that the two moms don’t want to go to licensing, Kevin is the first Shark out.
Robert speaks next, saying that one of the biggest obstacles that people come to Shark Tank with is the distribution. Jennifer and Hailey came into the Shark Tank with a partner who was willing to take that risk and get them into the market, but Jennifer and Hailey say they just want the guidance the most from the Shark Tank. Mark says that he thinks Hailey would take the country in her direction regardless, and Robert agrees with Mark – Hailey wants to do things the way she wants, so Robert is not sure that his say will really matter in the end. Robert is out.
Barb says that she thinks the team have some obstacles to face; the idea of an infomercial or anything is a horrible idea. Even then, they didn’t like the licensing deal because they fell madly in love with the product, just like falling too much in love with your kid and refusing to allow anyone to babysit. However, there is a franticness behind the two, and Barbara says she does not feel like the two know the path they need to be on. Jennifer says that their most clear path is to raise brand awareness, and the most important way to do that is with a catchy jingle and an infomercial. Barbara asks how they intend to fund the infomercial project, and with the money they receive from the Shark Tank, that is how they intend to fund their advertising. But without a clear business plan, Barbara believes that the two will have a hard time getting anyone to buy the product. Barbara is also out.
Mark says that he believes the team is the type of entrepreneurs who think they are open-minded and will listen to all the ideas, but the reality is that they are not open-minded. Mark asks what the two moms think their partnership will really work out to be if he comes in with any ideas – he cannot imagine it working, and is the fourth Shark to exit.
Lori is the last remaining Shark, and she says that she believes the moms focused on the wrong angle – they should attempt to drive costs down and should attempt to get it into retailers, but should not attempt to move into an infomercial or Direct Response Television program. However, the two of them say that they would love to do both, and Lori says that when the two walk away, she hopes they will release that idea from their mind. However, Jennifer brings up Pillow Pets, but Mark insists that they are not Pillar Pets – they are in an entirely different market with an entirely different formula, just like the Snuggie. While the Zip-It might make it into a Bed, Bath and Beyond, Zip-It must make it into a major retailer in order to keep afloat. However, the two moms continue to insist that they see no reason why they can’t attempt to move the product into stores and run infomercials at the same time; Lori is growing frustrated and says that she has had to explain four times now that a Direct Response Television spot, in her opinion, is the wrong way to go. However, the two moms kept replying they want to do both – Jennifer throws out a very haphazard “We’ll take your advice, but we can run our business into the ground if we want, what do you know, you’re only on Shark Tank” response. Mark and Barbara both burst out into laughter, and Lori exits the deal since she cannot get through to the team of moms.
Unfortunately, Jennifer and Hailey do not receive their investment from the Sharks. As they leave, Kevin mentions that they “are like zebra finches,” but does not elaborate other than with some nonsensical hand movements.
Zip-It After Shark Tank: 2018 Update
Just this year in 2016, not long ago on April 26-27, Zip-It launched its brand new 2016 product line. That right there should show you how Zip-It is doing, despite the mom-team’s appearance of complete ignorance. Zip-It has moved on to include a variety of products, but does NOT currently sell their original zip-up bedding idea, which include googly eyes and lifelike visages, such as the Monstar Pencil Case, the Grillz Backpack, and the Beast Box Pencil Box. Zip-It appears to be quite trendy, and is doing numerous trade shows yearly in attempting to get their product line out. Free shipping is available for orders over $15 on the Zip-It store website, but… again, they are not selling their Zip-It sheets. Zip-It is certainly a curious case, as I could not find any concrete information of what happened to the sheets – they are just gone.