Line Cutterz – Ring That Cuts Fishing Line
DEAL
EPISODE SUMMARY
🕓 Air Date: November 18, 2016
Asking For:
$120,000 for 20%
Investor:
Daymond John
Deal:
$120,000 for 33%
PRODUCT SUMMARY
Line Cutterz offers a ring equipped with a cutter, revolutionizing fishing line cutting for convenience and safety.
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Background Story
Line Cutterz, based in Wisconsin, was founded by Vance Zahorski, a passionate fisherman with a lifelong connection to the sport. Growing up, Vance spent countless hours fishing on his grandpa’s dock in Wisconsin, fostering a deep love for the activity. His pivotal moment came during a friend’s wedding in Florida when he accidentally caught a 3-foot blacktip shark. The struggle to untangle the thrashing shark from his fishing line led to a frustrating experience of searching for a knife in the sand, almost resulting in injury.
Fed up with the inadequacies of traditional tools like rusty clippers and dangerous knives, Vance envisioned a better solution. Inspiration struck when he decided to create a cutter that could be worn on the finger for quick and efficient line cutting. Using welding putty and a dental-floss cutter, Vance handcrafted the first Line Cutterz ring. When he tested the prototype and effortlessly cut the fishing line, he knew he had a million-dollar idea.
Within a short period, Line Cutterz gained traction, achieving sales of $280,000 in just over a year. Vance’s background in fishing, combined with his hands-on experience in crafting a safer and more convenient tool, positioned Line Cutterz as a game-changer in the fishing industry. The company’s origin story reflects Vance’s commitment to addressing a genuine need in the market, driven by his personal experiences as an avid fisherman.
The Product
Line Cutterz offers a revolutionary product designed to simplify and enhance the fishing experience. The Line Cutterz ring is a unique and practical tool that provides a quick and safe solution for cutting fishing lines of varying strengths. The ring is worn on the finger, offering anglers immediate access to a cutting tool without the need for fumbling with traditional, sometimes dangerous, alternatives.
The product’s versatility extends beyond fishing, as it can also efficiently cut thread, yarn, and embroidery floss, making it a handy tool for various applications. Crafted with precision, the ring is equipped to handle different line types, from 12-pound-test monofilament to robust 100-pound test braided nylon, catering to a wide range of fishing scenarios.
Priced at $12 retail, the Line Cutterz ring boasts a substantial profit margin with a wholesale cost of $6.00. Its affordability and functionality have contributed to its success, with the product available in 150 stores. Additionally, Line Cutterz has expanded its reach by launching on Amazon, providing customers with convenient access to this innovative fishing and cutting tool. The ring’s popularity is not only due to its effectiveness but also to its ergonomic and wearable design, offering a reliable solution for anglers and craft enthusiasts alike.
How It Went
The company’s position before Shark Tank
Line Cutterz has demonstrated robust performance since its inception, achieving notable success in a relatively short period. With over $280,000 in sales in just over a year, the company has established a strong foothold in the fishing accessories market. Currently based in Wisconsin, Line Cutterz operates with Vance Zahorski at the helm, leveraging his passion for fishing and innovative mindset to drive the company’s growth.
The company has strategically partnered with 150 stores to distribute its product, reflecting a successful retail expansion. Line Cutterz has also ventured into online sales by launching on Amazon, tapping into a broader customer base and enhancing accessibility. Wholesale operations have played a significant role, with the product priced competitively at $6.00, resulting in a healthy 70% profit margin. Vance has showcased business acumen by navigating negotiations with major retailers, including discussions with Walmart, although challenges arose due to disagreements on pricing.
Line Cutterz has secured funding through its sales revenue, avoiding external investment dependence. Vance’s dedication is evident in his multifaceted role, from website development to crafting in-store displays. This hands-on approach has contributed to the company’s lean structure and efficient operations. While Line Cutterz is actively expanding its dealer network, the company faces the challenge of balancing retail pricing to avoid alienating existing dealers while considering potential partnerships with major retailers like Walmart.
The Negotiations:
In the “Shark Tank” negotiations for Line Cutterz, Vance Zahorski faced a dynamic and challenging discussion with the Sharks. He entered seeking $120,000 for a 20% equity stake in his company. Daymond John, recognizing the potential of Line Cutterz, made a substantial offer: $120,000 for a 40% equity stake. This offer was met with hesitation from Vance, who sought additional offers from the remaining Sharks. However, as other Sharks bowed out of the deal due to concerns about pricing and potential market saturation, Vance found himself in a unique position negotiating exclusively with Daymond.
Kevin O’Leary warned Vance about the perils of rejecting a good deal from Walmart and advised him to reconsider. Lori Greiner also expressed concern about Vance holding too high a price point, potentially jeopardizing the business. In a pivotal moment, Vance counter-offered Daymond with a lower equity share, proposing 25% for $120,000. Daymond, recognizing his increased value in the negotiation, stood firm on his original offer, emphasizing the commitment and resources he would bring as a partner.
Vance, after a moment of hesitation, ultimately accepted Daymond’s offer of $120,000 for a 33% equity stake. This marked the culmination of a tense negotiation, showcasing the delicate balance entrepreneurs face between securing investment, maintaining company equity, and navigating the complexities of retail partnerships. The deal with Daymond John positioned Line Cutterz for accelerated growth and market penetration, underscoring the strategic decision-making necessary in the high-stakes environment of “Shark Tank.”
