DBest Products – Collapsible Carts
DEAL
EPISODE SUMMARY
🕓 Air Date: February 3, 2017
Asking For:
$350,000 for 5%
Investor:
Lori Greiner, Mark Cuban (50/50)
Deal:
$700,000 for 15%
PRODUCT SUMMARY
Dbest Products offers a range of innovative carts, including the Smart Cart, Trolley Dolly, and more, designed for various uses with features like lightweight, foldability, and ergonomic design.
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Background Story
Richard Elden, the founder of Dbest Products, brings a unique blend of international background and entrepreneurial spirit to the Smart Cart business based in Manhattan Beach, California. Born and raised in London, Richard’s life took a significant turn when his parents divorced when he was nine. His mother’s decision to seek a better life brought them to California, the land of opportunity. Richard firmly believes that the United States is the place for those with passion and determination who refuse to accept defeat.
The pivotal moment for Dbest Products came with California’s legislation to ban plastic bags. Sensing an opportunity, Richard capitalized on the changing market landscape. The company’s flagship product, the Smart Cart, was conceived as a response to this legislation. Richard aimed to create a cart that was not only environmentally friendly but also lightweight, foldable, and versatile. The Smart Cart, weighing less than 3 pounds, with a capacity of 110 pounds, quickly gained traction.
With a background in the TV shopping networks, including a long-standing relationship with QVC, Richard showcased his entrepreneurial acumen. Over the course of 16 to 17 years, he built a successful business, navigating the dynamic retail landscape and adapting to market demands. The growth of Dbest Products, now boasting sales of $5 million and counting, underscores Richard’s commitment to innovation and adaptability. The Dbest Products story is not just a tale of business success but a testament to resilience, ingenuity, and the pursuit of the American dream.
The Product
Dbest Products revolutionizes convenience with its flagship product, the Smart Cart, a versatile and innovative solution for various transportation needs. Weighing less than 3 pounds, the Smart Cart is a foldable marvel that can effortlessly hold up to 110 pounds. Its ergonomic design includes a convenient front pocket and waterproof material, making it an ideal companion for grocery shopping, daily commuting, or even air travel. The Smart Cart’s functionality extends beyond traditional carts, with a range of specialized variations such as the Trolley Dolly, a cart that transforms into a dolly with a 150-pound capacity.
Additionally, Dbest offers a cooler Smart Cart, designed for picnics and outings, and a stair climber for easy navigation up and down stairs. Customers can purchase Dbest Products, including the Smart Cart series, from major retailers such as Bed Bath & Beyond, Staples, and Hobby Lobby. The products are also available for online purchase.
The pricing structure aligns with the quality and versatility of the carts, providing a cost-effective and durable solution for a myriad of transport needs. Dbest Products has successfully redefined the cart landscape, making it not just a functional item for grocery shopping but a stylish, lightweight, and convenient accessory for a range of lifestyle activities.
How It Went
The company’s position before Shark Tank
Dbest Products has demonstrated robust health and a strong market position, firmly establishing itself as a leader in the cart industry. With a current sales figure of $5 million and projections to reach $7-8 million by year-end, the company’s financial outlook is promising. The strategic decision to sell through major retailers like Bed Bath & Beyond, Staples, and Hobby Lobby has contributed significantly to this success, providing broad market access.
The company’s key partners include major retail chains and TV shopping networks, with a notable long-standing relationship with QVC. This partnership has been instrumental in driving sales and expanding Dbest Products’ market presence. Wholesalers play a vital role in the distribution chain, ensuring the availability of Smart Carts to a wide range of consumers. Dbest Products caters to a diverse customer base, offering solutions for various needs, from grocery shopping to pet transport and outdoor activities. The Smart Cart’s adaptability has garnered a loyal customer following, contributing to the company’s sustained growth.
Funding for Dbest Products has primarily come from the founder, Richard Elden, who maintains 100% ownership of the company. This approach has allowed the company to grow without resorting to high-interest loans. The profitability of the business is evident, with a reported profit of $250,000 on $2.5 million in sales the previous year. Currently, the company is structured with Richard Elden as the sole owner, a testament to his entrepreneurial vision and commitment. However, recognizing the need for additional capital to meet growing demand, Richard sought a $350,000 investment on Shark Tank. The company’s proactive approach to securing funding and strategic partnerships positions it well for future growth and market dominance in the cart industry.
The Negotiations:
n the high-stakes negotiation on Shark Tank, Richard Elden skillfully presented Dbest Products’ success story, seeking a $350,000 investment for 5% equity. The initial ask set the stage for a competitive round of offers from the Sharks. Mark Cuban and Lori Greiner came forward with a joint offer of $700,000 for 15% equity, along with a significant game-changer — a $2 million credit facility. This comprehensive deal aimed not only to provide the required capital but also strategic support for warehousing, shipping, distribution, and returns.
Kevin O’Leary entered the negotiation with an alternative proposal, offering a $350,000 line of credit at 18% interest for 5% equity. While this would provide liquidity, it fell short of addressing Richard’s broader needs for strategic guidance and support. Mark Cuban further enhanced the negotiation by expressing willingness to consider a more substantial line of credit, potentially up to $2 million, and hinted at involvement with Samsung. However, he insisted on a 20% equity stake. Lori Greiner, recognizing the immediate need for liquid capital, stood firm on the $700,000 for 15% equity offer.
The negotiation reached a critical juncture when Mark Cuban proposed $350,000 for 20% equity, coupled with a minimum of $2 million in financing at a 15% interest rate. After brief consideration, Richard countered with $700,000 for 10%, aiming for a more favorable equity position. The counteroffer faced swift rejection from the Sharks. Ultimately, Richard chose to accept Mark Cuban and Lori Greiner’s joint offer of $700,000 for 15% equity, securing the capital infusion and the valuable strategic partnership necessary for Dbest Products’ continued growth and success in the competitive retail landscape. The negotiation showcased Richard’s adaptability and the Sharks’ recognition of the potential in Dbest Products.
