Friday, August 12, 2022

Freshly Picked Update- What Happened After Shark Tank

Freshly Picked Before Shark Tank

Susan Peterson is the founder of Freshly Picked, and she has just entered the Shark Tank seeking $150,000 in exchange for 10% of her company. Freshly Picked is the world’s best baby moccasin – when Susan’s second child was born, she looked everywhere for the moccasin-style type of show. Soft soles are actually better for babies that are learning to walk because they can focus on their toes with every step, which promotes the most balance and learning. Susan could not find the shoe she was looking for, so she decided to try her hand at making one with a bag of scrap leather she had from a garage sale. After teaching herself how to sew, she made six different designs until she found one that finally fit the bill.

Freshly Picked On Shark Tank

Freshly Picked Children's Moccasins
Freshly Picked Children’s Moccasins

Susan distributes samples of the freshly picked option to each Shark, all of which come in various different colors and themes. Lori asks where the moccasins are made, and Susan says that she originally made each and every moccasin pair herself but since expanding, she had to hire on a local girl to help her with fulfilling orders. Since then, they have been made by the two, with materials sourced from California. Robert asks about the method of sales, and Susan says that through their website only, they have sold $500,000 this year alone in moccasins. All of the Sharks are completely blown away, and Robert asks about profit on the $500,000, which Susan reveals to be $120,000. Kevin asks about the attachment rate – how many pairs of moccasins are each customer buying? Susan comments on the integrity of the question, but she does not have an answer – it is for this reason, the ability to ask good questions, that Susan loves Kevin. She jokes that she has Kevin’s face on a pillow at night. However, Daymond pushes for Susan to answer the question, and Susan reveals that of all the parents that come and purchase, 50% will attach and purchase at least 3 more pairs.

Lori asks if the baby can just pull off the boot, but the elastic will keep it in place. Robert is impressed by the $500,000 in sales, and asks how much the initial investment was. Susan says that initially, the two didn’t have any money, but her brother owned a window installation business and so she convinced her brother to give her all the old windows that he didn’t sell over a year. During that time, she cleaned the glass out of the windows since they were an aluminum frame and at the end of the summer, she took the frames to the scrapyard and received $200. At that point, she bought a gigantic sheet of leather which made about 40 moccasins and since then, as she has made money she has continued to reinvest it into her company. That’s why the start was slow, but Mark insists that the story of Freshly Picked is the best story of a company he’s ever heard. Lori then asks about a price for a pair of moccasins, and Susan reveals that they retail for around $60 a pair. Each pair is made for around $17, while remaining domestic. Robert asks about projection for next year, and Susan says that with her social media presence alone, she is confident that she can do 2 to 3 million dollars worth of sales. She is gaining about 1,500 new followers on Instagram per week, and about 10% of those new followers buy.

Lori asks if Susan has any retailers that are recurring customers who are looking to order, but Susan says that she has retailers who are interested, but unfortunately she was not able to keep up with the demand. With the money she receives from the Shark Tank, she wants to make a big order overseas. The vision for her company for the next year involves growth to numerous retailers and brands.

Kevin says that he is in love with Susan so far, but unfortunately such a business is incredibly tough on the inventory side of things. Susan says that she wants to make a big company, and Kevin corrects her and says that she wants to make money – he continues on, saying that there is a big shift in retailers where retailers will quickly drop off people, and says that he is not even mentioning the fact that Daymond has introduced him to the concept that one big round of returns could cause the entire inventory system to collapse. The retailers take the capital, put their product in the store, but then do not pay out until the retailer gets paid out.

A sample of the many styles that Freshly Picked comes in
A sample of the many styles that Freshly Picked comes in

Mark says that he loves the story of Susan taking the aluminum frames should be in every business book – that story personifies the action of “getting off my butt and let’s go out there and get it done,” but with that said, Mark says that he is not the guy for baby shoes. He would be learning from Susan more than Susan would be learning from him, and while he respects Susan, he is out of the deal. Robert speaks up, saying that sales trumps all – with $500,000, Susan has everything figured out. Unfortunately, Robert feels he cannot add anything to the business that is not already there, and he does not feel that he is the right partner – he is out as well.

Lori says that Susan would make a great partner and that she has all the right makings for someone who wants to run a business to run a business. She thinks that Susan would work better on her own and make more money on her own, and for that reason, Lori is also out. Kevin asks how many pairs Susan thinks she can sell in a year, and Susan says she can probably sell 25,000 to 30,000. Daymond speaks up, saying that she can do that which is more than awesome, so why does Susan need the $150,000 she is looking for, and why does she need a partner? Susan explains she hasn’t been to school and Freshly Picked is her first business and she has been burned a few times, so she wants advice and a helping hand. She needs someone to show her how she can do it, and she needs help with manufacturing.

Kevin mentions that he doesn’t want the 10% equity since that doesn’t excite him  – the headache isn’t worth the hassle. Susan says that she isn’t a headache, but Kevin says that in business, there are always headaches. Kevin then offers a unique term, saying that he will offer a deal but he wants to ensure that he will get his $150,000 back, and invites Daymond in on the deal, saying that on this deal, Daymond will need him more than he needs Daymond. Kevin brings a lot to the table in terms of making Susan bigger than she is, so Kevin offers $75,000 in exchange for no equity but a royalty of 7% until Kevin recoups his $75,000, where it is dropped down to 5%. Daymond points out that there is only $75,000, and Kevin mentions that Daymond’s math is correct and waits through the commercial break for an answer from Daymond. Daymond responds with an offer of $150,000 in exchange for 25% of the company, and he and Susan will tell Kevin to get lost – Daymond wants to go in alone on the deal. Daymond says he can help with everything, but Kevin says that this is a real debate for Susan now. Susan says that the business is growing for now and that she would not make as much profit from offering a royalty, and an equity would be better – Daymond pressures Susan to take his deal. Susan makes a counter-offer of $150,000 for 20%, and Daymond says that he has to respect Susan due to the person she is and where she has come from – normally, Daymond would want ⅓ of the company, but he would like to stay at 25% in this circumstance. Unfortunately, Daymond’s valuation of $600,000 is what Susan has done in sales this year alone, so she cannot take the deal in good faith – however, Daymond is her dream investor. Daymond says that his offer is not what he is valuing her company at, but what he is valuing his time at. In the end, Susan takes Daymond’s offer of $150,000 in exchange for 25% of her company.

SHARKTANK3Freshly Picked Now in 2018- The After Shark Tank Update

Freshly Picked Moccasins are still doing quite well – without any Sharks as investors, Susan is still finding massive amounts of success. Her website for Freshly Picked looks very fresh and modern and showcases her products nicely – in addition, she is a Twitter success with 14,000 followers and continuous status updates. I could not find any numbers on how many sales Freshly Picked has done, but it has to be doing quite well. Susan has been featured in articles on Forbes and The Wall Street Journal, and is the quintessential success of a self-made entrepreneur.

Steven Kahn
King of the Bears, Shark Tank enthusiast, failed network engineer, sour cream enthusiast, Nanchaku instructor, Techman, Mega Man X fan, vaporizing know-how
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