Makeup Junkie Bags
DEAL
EPISODE SUMMARY
🕓 Air Date: January 20, 2019
Asking For:
$200,000 for 15%
Investor:
Lori Greiner
Deal:
$200,000 for 5% + $0.75 royalty in perpetuity
PRODUCT SUMMARY
Makeup Junkie Bags offers multifunctional bags designed for storing beauty products, featuring a lay-flat design, leak-resistant interior, and stylish fabric suitable for use as a clutch.
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Background Story
Makeup Junkie Bags, based in Houston, USA, emerged from the creative mind of Meredith Jurica, a beauty enthusiast with a keen eye for functional design. Meredith, the founder and owner, brought her passion for beauty products and a personal struggle with organizing them to the forefront. Frustrated with traditional bags that would topple over, causing products to spill, especially during travel, Meredith envisioned a solution that was both practical and stylish. Drawing from her background in beauty and recognizing the need for an innovative storage solution, Meredith set out to create the most multifunctional bag one could own.
Her vision included a bag that could lay completely flat on any surface, eliminating the common issue of traditional bags tipping over. The result was a groundbreaking lay-flat design coupled with a leak-resistant interior, providing a solution to the challenges faced by beauty enthusiasts on the go. The inception of Makeup Junkie Bags occurred in Meredith’s own kitchen, where she initially operated as a one-woman sewing show. The journey began with solving her own problem, but it quickly transformed into a business opportunity as demand soared after Meredith shared her creation on social media. The bags gained viral attention, prompting inquiries from stores and franchises.
With a commitment to quality and an entrepreneurial spirit, Meredith expanded her operation into a full-blown “Made in the USA” business, producing over 6,000 bags a month. Makeup Junkie Bags is not just a product; it’s a testament to Meredith’s dedication to solving a common problem in the beauty industry. The success of the business is rooted in her attention to detail, commitment to quality, and a journey from a one-woman sewing operation to a nationally recognized brand.
The Product
Makeup Junkie Bags revolutionizes the way beauty enthusiasts organize and transport their cosmetic essentials. The key feature of these bags lies in their innovative lay-flat design, ensuring that when opened, the bag remains flat on any surface. This not only facilitates easy visibility and access to the contents but also prevents the common issue of traditional bags tipping over and causing spills.
Crafted with a leak-resistant interior, Makeup Junkie Bags provide a secure environment for storing a diverse range of beauty products. The bags are not just utilitarian; they double as stylish clutches, thanks to the incorporation of beautiful fabrics. This versatility makes them a fashion statement for a night out.
Available in various sizes and prints, the bags cater to different preferences and needs. The product line extends beyond women’s cosmetics, with a dedicated men’s line called Man Junk, showcasing the brand’s commitment to inclusivity.
Makeup Junkie Bags primarily operates on a wholesale model, with the bags wholesaling at $24 each. Retail pricing is set at $50, offering a competitive and attractive option for both distributors and end consumers. The bags can be found in 1,200 stores nationwide, showcasing the widespread demand and success of this multifunctional and stylish solution for organizing beauty essentials.
How It Went
The company’s position before Shark Tank
The company, founded by Meredith Jurica, has experienced significant growth in its 18 months of operation, boasting a commendable $1.15 million in sales. This success can be attributed to the brand’s unique and functional lay-flat design, which has resonated with a wide audience of beauty enthusiasts. Makeup Junkie Bags operates as a debt-free company, a testament to its sound financial management. Meredith Jurica, the sole owner, initially invested profits into industrial equipment, enabling her to bring manufacturing in-house. The decision to manufacture internally has resulted in a quality control advantage, reinforcing the brand’s commitment to excellence.
The company has strategically positioned itself in the market through a predominantly wholesale distribution model. With products wholesaling at $24, Makeup Junkie Bags have secured placement in 1,200 stores nationwide. This widespread retail presence reflects the brand’s popularity and consumer demand. While Makeup Junkie Bags primarily relies on revenue generated from sales, the founder’s initial investment and dedication to maintaining a debt-free status underscore the company’s financial stability. As for partnerships, the brand has collaborated with various retailers and boutiques, expanding its reach and customer base.
The company’s structure revolves around Meredith Jurica’s ownership, emphasizing a streamlined decision-making process. The business model focuses on continual growth, with a commitment to meeting the increasing demand for Makeup Junkie Bags. As the brand continues to thrive in the beauty and fashion space, its solid financial foundation positions it for sustained success and potential future expansions.
The Negotiations:
In the “Shark Tank” negotiation for Makeup Junkie Bags, Meredith Jurica navigated a challenging but ultimately successful interaction with the Sharks. Initially seeking $200,000 for 15% equity, Meredith presented a compelling pitch, showcasing the lay-flat design and versatility of her innovative bags. Kevin O’Leary, Barbara Corcoran, and Daymond John opted out early, citing a lack of relatability or relevance to their portfolios.
Lori Greiner, a key player in the beauty and fashion space, initially offered a $200,000 loan with $1 per bag and 5% equity. Kevin O’Leary proposed an alternative loan deal with 3% equity. The negotiation took an interesting turn when Lori adjusted her offer, providing a $200,000 loan with 75 cents per bag in perpetuity and retaining 5% equity. Sensing an opportunity for a better deal, Mark Cuban entered the negotiation with a counteroffer. He suggested a $1.50 per bag royalty until he recoups $750,000, after which the royalty ends, and he retains 3% equity.
Ultimately, Meredith accepted Lori Greiner’s adjusted offer of a $200,000 loan with 75 cents per bag in perpetuity and 5% equity. This decision was influenced by Lori’s expertise in the fashion and beauty industry, her willingness to adapt the terms, and the value she brought to the partnership, including her contacts and experience with QVC. The negotiation showcased Meredith’s astuteness in choosing a deal that not only provided the necessary capital but also aligned with her business goals and aspirations for Makeup Junkie Bags.
