The Sharks Fight Over Unique Toy Business — Shark Tank US — Shark Tank Global

[00:00:00] Speaker 1: First into the tank is Nikki Pope with a money-saving idea to help parents entertain their kids. [00:00:09] Nikki Pope: I'm Nikki Pope. I live in Los Angeles, California and my company is Toy Guru. I have 13 nieces and nephews and they absolutely love playing with toys. I call them my playtime professionals. The problem is they get bored with those toys really quickly. That is what inspired me and my husband to create Toy Guru. Toy Guru offers a cost-effective way not only for parents to declutter their homes but to keep their kids challenged and entertained. My husband and I don't have any kids yet but we would definitely like to and an investment from the Sharks would mean that we would have the stability we need to start a family of our own. My dream for my company is that every family who has children who love to play with toys. We use Toy Guru and I really hope the Sharks will help make that happen. Hi guys. My name is Nikki. My company is Toy Guru and I am asking for one hundred thousand dollars in exchange for ten percent of my company. Toy Guru solves a problem that millions of families face every day. I have eleven brothers and sisters and I am lucky enough to have thirteen outstanding nieces and nephews all under the age of eight. One thing that I've noticed is that my siblings are purchasing toy after toy for their kids. Their playrooms, their living rooms, their bedrooms are cluttered with toys that were purchased, played with for a few weeks, and now are left completely untouched. Toy Guru solves that problem and more. My company is the Netflix for toys. Consumers can go to my website, pick a plan that's right for them, fill their wish list with toys that they would like to receive, and I ship those toys right to their door. The great thing about my company is when their kids get bored with or outgrow those toys. They just throw them in the box, use the return label that we provided, send them back to us and we send them their next box of toys. Can I just see your snail? I just want to see what the quality is like. Absolutely. And how many toys are in your catalog? We have over 300 different types of toys. [00:02:37] Speaker 3: What is the servicing of it? You know, the toys come back, obviously kids are not the cleanest, so you've got drool on the toys, you have bed bugs. Would they have pee pee and poopoo on the toys? Maybe. There has to be a process. People have to be hired to do this. [00:02:50] Nikki Pope: With our company, the cleaning is the most important, and so the toy gets sanitized. And you shrink wrap it? And we shrink wrap it every time. Who else is doing this, Nikki? There is not another company that is doing this. So Nikki, what about the damage? In six months, we had zero toys that we had to completely replace. If a child does break the toy, we sell it to the member at a discounted cost. Nikki, walk us through your business model. How do you make money? All of our members obviously pay a monthly membership fee. We have plans that start at $35 a month, and they go all the way up to $89 a month. [00:03:25] Speaker 4: That's a lot! $35 a month? [00:03:28] Nikki Pope: Right. [00:03:29] Speaker 4: And how many families pay you that? [00:03:30] Nikki Pope: Um, we did a soft launch with 500 members. It was basically like a test launch. They were all paying $42 a month for a box of toys that's worth over $200. [00:03:41] Speaker 3: So you're saying basically it costs them about $500 a year. [00:03:44] Nikki Pope: Exactly. Which is great, because the average family spends anywhere between $12 and $1,400 a year. [00:03:50] Speaker 5: And tell me again, the cost per toy box that you ship was $200, did you say? And what's your cost on the toys that you're shipping? [00:03:57] Nikki Pope: On the box of toys, it's going to be anywhere between $50 to $85, $90. [00:04:02] Speaker 4: It's two and a half months you break even on your customer. Right. That's exactly right. Nikki, how do you scale it up? How do you make this a big business? [00:04:09] Nikki Pope: All we need is more marketing, more exposure. In the small amount of time that we had our 500 customers, just by word of mouth, we got a waiting list of over a thousand people ready to sell. [00:04:19] Speaker 6: Nikki, I think that's a great idea. Let me ask you this. If the business begins to grow, does it suck up a ton of cash? [00:04:27] Speaker 4: Nikki, for every million dollars of sales, how much do I have to put in to buy inventory of toys? Justin Toys. Justin Toys. [00:04:34] Nikki Pope: Justin Toys, $64,000. That's going to cover a year of toys. [00:04:37] Speaker 4: Okay, Nikki, I've heard enough. The problem is, you don't have a million dollar business yet. You're asking me to pay you as if your business is worth a million, and it's not. But I want to be an investor in it. You have a good idea. This is interesting. So, this is a leap of faith for me because I have to think you're going to grow this thing. Do you have any partners? You're doing this on your own? [00:05:06] Nikki Pope: My husband is a partner, and then I have a web designer and two online marketers that are partnering with me. [00:05:12] Speaker 3: How much do you own? [00:05:14] Nikki Pope: I own 10% of the company. [00:05:17] Speaker 3: You own 10%? Who owns the rest? Where's the other 90? [00:05:21] Nikki Pope: We all own 10%, and my husband owns the bigger chunk of... [00:05:25] Speaker 6: Which is how much? [00:05:26] Nikki Pope: He owns 50%. [00:05:27] Speaker 6: Why does your husband own a bigger chunk? [00:05:29] Nikki Pope: Because I... that's how we decided. How happily married are you? I'm incredibly happily married. [00:05:35] Speaker 4: How would you, who came up with this idea, give so much to your partner? Why? [00:05:39] Nikki Pope: He's worked with me and blood, sweat, and tears with me every day. Do you have a prenuptial agreement? No, we don't. Oh. We were half and half when we started, okay? [00:05:48] Speaker 4: And you sold your piece to all these others, and you didn't take any from him? [00:05:51] Nikki Pope: The way that we worked the company is we wanted to make sure our family as a whole had the majority share, okay? [00:05:57] Speaker 7: But to Kevin's point, then, why didn't you each give away some of your shares? [00:06:01] Nikki Pope: Um, I don't know. [00:06:03] Speaker 3: I've had a bad history of speaking to people who don't have controlling of the company. I'm out. Nicky. [00:06:11] Speaker 4: You know, I wish you owned more, but nevertheless, I'd like to make you an offer here. I'll give you $100,000 for 35%. Rarely, Nicky, do I not ask for control, because I'm a control freak. Okay. But I trust you. You know what you're doing. You do. And I can help you immensely in the toy space. Immensely. [00:06:50] Speaker 7: Do you have the right to sell 35%, Nicky? [00:06:53] Nikki Pope: Um, I have the right to do whatever I want with the company, yes. I had my eye on you when I came in here. [00:07:01] Speaker 4: I have my eye on you. [00:07:02] Speaker 7: Nicky, you are the first person ever to walk into the Shark Tank and actually be attracted to him. [00:07:07] Nikki Pope: You know what, he's got a tough exterior, but I'm a southern girl and I knew I could get in. She's right. [00:07:13] Speaker 5: He's blushing. He is blushing. [00:07:15] Nikki Pope: He really is. [00:07:17] Speaker 6: Nicky, I've made you an offer. What are you going to do? Nicky, just before you answer that. Mark, I see this as an internet logistics plate. Would you be interested? I'd like to get in on this one with you. Would you be interested in putting up more money? Absolutely. Because I think really this key issue for me, it's a website, social media, I'm in that world. But I think you got to go faster than you're suggesting. I agree 100%. So Kevin's offering 100 for 35. I'm thinking we raise more money. What do you have in mind? I was thinking 200 or 250 for maybe 35 or 40. I'd split 200 for 40. Okay. [00:08:08] Speaker 7: Well, you just knocked me out. I was going to offer a lot less. I'm out. [00:08:15] Speaker 1: Two sharks are out. Nicky has an offer from Kevin for $100,000 for 35% of her company. And another from Robert and Mark for $200,000 for 40%. I want you to know something about me. [00:08:30] Speaker 4: I am Mr. Toy. I sold my company to Mattel. [00:08:33] Nikki Pope: I know it. [00:08:34] Speaker 4: I lived in Fisher Price for a year. Those toys are my friends. I speak toy. [00:08:40] Speaker 6: I just think you need more capital. Okay. You got to get going faster. That's going to be your only advantage. [00:08:44] Speaker 5: And you need someone with internet hyper growth experience. Okay. [00:08:48] Speaker 4: It wouldn't hurt to start partnering with some of the toy companies. Let me tell you. And there's two that own 90%. And I know all their board members. [00:08:56] Speaker 6: Mark and I are offering you $200,000. Okay. For 40%. Okay. I'm offering you $100,000 for 35%. What are you going to do? [00:09:07] Nikki Pope: Where are you at relationship-wise with Fisher Price and Mattel? [00:09:10] Speaker 4: They're never going to forget me. Put it to you that way. [00:09:14] Nikki Pope: Are you holding at your $100,000 for 35? [00:09:18] Speaker 4: I'm thinking. I'm thinking. [00:09:20] Nikki Pope: Um, I don't know if you'd be willing to go up anymore on your number without moving that percentage. Um. [00:09:28] Speaker 4: What's... What do you want from me? [00:09:30] Nikki Pope: She wants you to bid against yourself. [00:09:37] Speaker 6: Nicky, I don't think the relationship with the toy companies... Really? You don't think that matters? [00:09:42] Speaker 4: No, no, no. [00:09:43] Speaker 6: Hang on a sec. I never said it didn't matter. [00:09:45] Speaker 5: It's not critical to get going. And somebody who's been through an online service. Okay. That's built around subscriptions. Someone who does business with Netflix and knows how they work and other online services. Okay. That is what's going to get you over the top. We can get the door opening to Fisher Price or any toy company. [00:10:03] Speaker 6: Once we have the customers... I mean, my company secures and services some of the largest internet sites in the world. Once we have the customers, trust me, there's no problem going to Mattel and these toy companies. [00:10:13] Speaker 4: You know, there's so many guys that provide internet logistics services. There's a whole industry full of guys like this. Dime a dozen. I think I know exactly how to build this business and exactly how to exit it, which matters to you. That's how you actually make money. [00:10:27] Nikki Pope: I like $200,000. I was going to ask you guys if you'd consider 35% for $200,000. [00:10:41] Speaker 4: Are you saying if I match their offer, they'll do the deal with me? Done. How about this? I like what this guy brings, so I'll split it with him. I'll do that. [00:10:59] Nikki Pope: We have a deal. [00:11:00] Speaker 4: Done. [00:11:02] Speaker ?: Wow. [00:11:03] Speaker 7: You're out, Nicole. [00:11:05] Nikki Pope: Robert, cut you out. Robert, I'm so sorry. [00:11:12] Speaker 4: I'm very excited. [00:11:13] Speaker 3: This is a great idea. Thank you so much. I love it. Robert, you were the toy they were playing with for a little while and she sent you back. Newfound respect. You broke up with your potential partner without even looking at him. Give me someone that. You know, it happens. I'm a savage, Kevin. [00:11:31] Speaker 5: And you joined friends with the devil. You're a savage. You got the steal of a lifetime. [00:11:35] Speaker 7: Why did she like him? I've never seen anyone like him. [00:11:37] Speaker 5: One of those mysteries of life. [00:11:41] Nikki Pope: Man, what it means for Toy Guru to be in business with Kevin and Mark is... Just, uh, it's the perfect connections. I had my eye on Kevin when I walked in there. Um, I'm thrilled. I'm so thrilled. It's gonna be great. [00:12:15] Speaker ?: It's gonna be great. I'm so thrilled. It's gonna be great. I'm so thrilled. It's gonna be great. It's gonna be great. It's gonna be great. It's gonna be great. It's gonna be great. It's gonna be great, you know.