Swoveralls Before Shark Tank
Overalls are a great item of clothing. They protect the inner clothing and keep people warm in cold weather. Sweatpants are another item of clothing that are equally as popular because of their fabric that traps heat and this warms up the muscles faster.
Kyle Berman realized that people could benefit even more from their clothing if they combined the benefits they got from sweatpants with the benefits they got from overalls. He developed an item of clothing that combined both and called his invention the swoveralls. Swoveralls are overalls that are made with the same material that sweatpants are made from. With swoveralls, you get to enjoy the functionality of overalls with the comfort of sweatpants.
Swoveralls had launched successfully but the business kept running into some problems. Its inventory could not keep up with sales and this had led to losses. Kyle wanted more money to increase his production and diversify his product to reach more people. This made him apply to be on Shark Tank. His application was successful and he was called to be on the 20th episode of the 10th season.
Swoveralls On Shark Tank
Kyle Bergman went to the Shark Tank seeking 150,000 for 15% of his company. This gave Swoveralls a valuation of $1,000,000. He gave his presentation showing the sharks the benefits of making overalls out of the material used to make sweatpants. He then showed the sharks pictures of what they would look like if they had swoveralls on. After that, he gave each shark sample swoveralls to test.
Kevin at once asked whether a person could answer a call of nature while in the swoveralls. He was shown that it had a zipper in the front and he could also be shown how to take a number 2 afterward. Kevin then asked what their sales price and cost of manufacture were.
Kyle said that they were made in the USA. It cost him $33 to make and their sales price was $95. He was asked about the sizes available and he said that for women, he had extra small to extra large (XS-XL). He said that he was on Shark Tank because parents kept asking for smaller sizes for their children which he could not provide at the moment.
Mark Cuban asked him what his sales had been like. Kyle said that he had launched in September and had recorded a little more than $230,000 in sales. His sales methods were direct to consumers and selling on Amazon. He got requests from customers to do more colors and since he lacked the capital to do so, he did a Kickstarter campaign which raised $75,000 for him.
Kyle thought that the Kickstarter campaign went very well because, after that, he was able to reduce his own inventory risk by asking people to pick the colors that they wanted. Kevin then asked Daymond why other businesses in the clothing sector would not copy Swoveralls’ design once they saw that swoveralls’ clothing was gaining popularity.
Daymond thought that it was possible for an individual to differentiate themselves. He gave the example of Snuggie which he said had simply cut two holes in a blanket and sold it and it was still in operation. Daymond then addressed Kyle’s inventory problem and said that it was a major problem for clothing businesses.
Daymond said that he knew most of Kyle’s color requests are going to be black. He could add the other colors but overall, Daymond was not sure how it was going to work. Kyle said that Daymond had addressed his problems accurately. He then said that he wants to see the lines that make 80% of sales be used to mitigate losses from the others.
Kyle then said that in the past year he had made losses worth around $100,000 because of problems with inventory. His failure to acquire inventory in adequate time was because he lacked capital and it was the reason why he had applied to be on Shark Tank.
Barbara then left. She said that she did not think the business would go far because it had too many products for too narrow a market. She used Comfy Brand as an example of a company that had only one product but was a success because it sold as many of its one product as it possibly could. Barbara also said that she thought that Swoveralls was only making a profit because overalls were in fashion but it would not last.
After Barbara left, Kyle told the remaining sharks that he planned to use the money to increase his production for the products he knew had a high sales rate. He would then diversify and increase the products he was selling while the brand had momentum. He wanted to sell to college students and plus-size individuals.
Barbara told him that his target markets were all very niche. It would simply lead to more sizes and colors with little sales. Mark Cuban said that if Kyle had enough intrinsic demand he would not need to look for new markets. Mark then left. He felt that the product was not going to be a success.
Kevin then left. He said that he did not think he would get the $150,000 Kyle was seeking back and normally an investor wanted more than what they were investing. He also said that clothing companies always had an inventory problem and the solution was always getting into a new marketing skew such as a different height or age range. This made him unexcited about the product.
Daymond did not like that Kyle was trying to create new skews. He said that Under Armour and his own company Fubu had started around the same time. Fubu tried many skews while Under Armour only had one and because of this Under Armour was a bigger success. He then left because Kyle hadn’t figured out the one thing that he was good at.
Lori left after Daymond. She said that she thought that he had found the one thing that he was good at and that was the overalls. However, he had a lot of marketing to do so it was too early for her.
Without an offer, Kyle had to leave. Kyle said that he thought that the sharks had made a mistake given his revenue. His business was only starting and they would have to watch his success from a distance instead of being part of it.
Swoveralls Now in 2023 – The After Shark Tank Update
Although it did not get a deal from the sharks, Swoveralls continued its business operations and still sells on its website and Amazon among other websites. It has a 30% return customer rate which is very high for a clothing company.
The company was affected by the Covid-19 pandemic and its China-based factory was shut down. However, it also has a factory in Los Angeles whose operations weren’t affected at the start. At some point, they managed to reopen the China factory and had to shut the one in Los Angeles because of the pandemic.
Kyle has started another operation, Sweat From Home, which is a virtual fitness group. Swoveralls has a large social media following with over 36,000 followers on Tik Tok and over 20,000 followers on Instagram. Its Facebook and Twitter accounts have yet to get more than 2,000 followers but they are growing.
Swoveralls’ revenue has grown from $314,000 in 2020 to $100,000 monthly in 2021. With the decline of Covid-19 cases, its operations have increased and it will be a source of comfortable clothing for everybody in the whole world.