eCreamery Personalized Ice Cream
NO DEAL
EPISODE SUMMARY
🕓 Air Date: September 21, 2012
Asking For:
$250,000 for 33%
Investor:
No Deal
Deal:
No Deal
PRODUCT SUMMARY
eCreamery offers customizable ice cream, gelato, and sorbetto flavors as personalized gifts delivered to customers' doorsteps.
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Background Story
Becky App and Abby Jordan founded eCreamery in Omaha, Nebraska, after leaving successful corporate careers to pursue their passion for ice cream. Recognizing the emotional connection people have with ice cream, they aimed to transform it into a personalized gift experience.
They acquired a non-functioning ice cream website and rebranded it as eCreamery, offering customizable flavors and mix-ins for customers to create unique gifts. Despite facing challenges and sacrificing financially, they poured their efforts into building the business, handcrafting each pint themselves to maintain quality.
The Product
eCreamery’s unique selling point lies in its personalized ice cream gifting service. Customers visit the website to choose from over 50 flavors of ice cream, gelato, or sorbetto and select mix-ins ranging from chocolate fudge brownies to bacon.
They can then name their custom flavor, creating a personalized message for the recipient. Once the order is placed, eCreamery handcrafts the ice cream and ships it in a reusable cooler with dry ice to ensure freshness upon delivery.
The pricing varies based on the chosen options, with an average cost of $55 for a 4-pint ice cream gift, plus shipping. Although shipping costs are additional (around $25 for second-day air), customers are willing to pay for the unique gifting experience. eCreamery emphasizes the emotional value of their product, comparing it to the cost of traditional gifts like flowers.
How It Went
The company’s position before Shark Tank
Since its inception in 2007, eCreamery has generated $2 million in sales. However, their profit margins are lower than expected, with a $60,000 projected profit on $750,000 in sales. The company attributes this to significant investments in infrastructure, including machinery, recipes, and shipping processes. They primarily market through online advertising, with a customer acquisition cost of $20 and an average repeat purchase rate of twice a year per customer.
Despite their success, eCreamery faces challenges, including high shipping costs and stiff competition in the ice cream industry. Additionally, the founders have a complex ownership structure, with an investor owning 70% of the company after injecting $600,000. This arrangement complicates negotiations with potential investors on “Shark Tank.”
The Negotiations:
During the pitch, the sharks expressed interest in the product but raised concerns about the company’s financials and ownership structure. Barbara offered $125,000 for 25% equity, but the founders rejected it, seeking the full $250,000. Mark expressed admiration for the idea but ultimately bowed out due to concerns about potential imitators entering the market.
Kevin offered $125,000 for 25% equity, citing the promotional challenges of educating consumers about ice cream as a gift but ultimately withdrew his offer due to the other sharks’ unwillingness to negotiate. Despite the sharks’ praise for the product, none made a deal, leaving the founders disappointed but determined to continue building eCreamery into a household name. They left the tank convinced of their product’s potential and confident in their ability to succeed despite the setback.
