Mama’s Milkbox – Maternity Clothing For Breastfeeding
NO DEAL
EPISODE SUMMARY
🕓 Air Date: January 13, 2017
Asking For:
$200,000 for 20%
Investor:
No Deal
Deal:
No Deal
PRODUCT SUMMARY
Mama's MilkBox is a nursing apparel subscription service delivering curated breast-feeding fashion to subscribers' doors for $29 a box.
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Background Story
Mama’s MilkBox, founded by Elena Petzold in Pittsburgh, Pennsylvania, emerged from Elena’s personal experience as a breastfeeding mother. Recognizing the challenges of finding comfortable and stylish nursing attire, Elena envisioned a solution for nursing moms nationwide. The company operates as a subscription service, offering curated shipments of nursing tops and dresses for $29 per box. Elena, a mother herself, understands the importance of feeling good while breastfeeding and aims to provide a convenient and fashionable option for mothers.
Elena’s journey into entrepreneurship began with a personal investment of $11,000, and she has since grown the business while reinvesting profits. The company’s mission is rooted in Elena’s passion for supporting breastfeeding mothers, driven by her own experiences. Despite facing challenges in financial management and inventory control, Elena remains confident in Mama’s MilkBox’s potential for success.
The pitch on “Shark Tank” sought a $200,000 investment for a 20% equity stake in Mama’s MilkBox. However, the Sharks expressed concerns about the business model’s sustainability, financial management, and the fundamental challenges it faced. Despite Elena’s enthusiasm and commitment, the Sharks collectively decided not to make a deal, emphasizing the need for improved financial practices and the viability of the subscription model.
The Product
Mama’s MilkBox is a revolutionary nursing apparel subscription service designed to provide breastfeeding mothers with convenient, stylish, and comfortable options. Priced at $29 per box, the service operates on a subscription model.
To begin, subscribers complete a style profile detailing their preferences. Based on this profile, Mama’s MilkBox’s breastfeeding stylists curate a selection of nursing tops and dresses tailored to the subscriber’s taste. The curated shipment is then delivered to the subscriber’s doorstep.
The key benefit of Mama’s MilkBox is its focus on convenience and personalization. Breastfeeding moms can enjoy trying on the curated clothing in the comfort and privacy of their own homes for three days. They have the option to keep what they like and return the rest, with the $29 styling fee applied as credit to any items kept. Furthermore, subscribers receive a 10% discount if they choose to keep the entire selection.
The subscription model allows for automatic scheduling of the next shipment, ensuring a continuous supply of stylish nursing apparel. The company also emphasizes the uniqueness of its private label, adding an exclusive touch to the curated clothing. While the Sharks raised concerns about the financial aspects, Mama’s MilkBox aims to revolutionize the breastfeeding fashion industry by providing a hassle-free and personalized experience for nursing mothers nationwide.
How It Went
The company’s position before Shark Tank
Mama’s MilkBox has shown commendable growth, with sales reaching $83,000 last year and already surpassing $100,000 this year. Despite facing challenges, the company maintains a substantial inventory of approximately $160,000, funded through a $40,000 line of credit and $27,000 on credit cards. The founder, Elena Petzold, started the business with a personal investment of $11,000, reinvesting profits to fuel the company’s expansion.
The company’s financial health, however, raised concerns during the “Shark Tank” pitch. The Sharks delved into the intricacies of Mama’s MilkBox’s financial management, highlighting the need for dedicated financial expertise. Elena revealed a reliance on Excel and paper for bookkeeping, prompting questions about the company’s ability to track costs, profits, and losses effectively. While Mama’s MilkBox boasts a private label for its curated clothing, the Sharks were keen on understanding the proportion of in-house products versus those sourced from external wholesalers.
Elena expressed the desire to increase the presence of their private label in the curated boxes, aiming for at least one or two pieces per shipment. The company’s current structure involves Elena and a team of three, including recent hires. Overall, Mama’s MilkBox stands at a critical juncture, showcasing potential but requiring strategic adjustments in financial management, inventory control, and operational efficiency to ensure sustained success in the competitive market.
The Negotiations:
The negotiations for Mama’s MilkBox on “Shark Tank” unfolded with founder Elena Petzold seeking a $200,000 investment for a 20% equity stake in her nursing apparel subscription service. However, the Sharks expressed substantial concerns about the company’s financial health, inventory management, and the viability of the subscription model.
Kevin O’Leary, known for his pragmatic approach, quickly bowed out of the deal, citing fundamental issues in the business model and a potential risk of going out of business due to capital constraints. Other Sharks echoed these concerns, emphasizing the critical importance of understanding financial metrics, especially given the nature of a subscription-based service. As the discussion unfolded, it became clear that Mama’s MilkBox faced challenges in tracking costs, profits, and losses. The lack of a dedicated financial expert raised red flags for the Sharks, and they collectively decided not to invest, expressing doubts about the company’s sustainability.
Despite Elena’s passionate pitch and commitment to her cause, the Sharks did not see a feasible path forward. They highlighted the need for improved financial practices, transparency regarding partnerships and wholesalers, and a clearer strategy for overcoming the challenges associated with inventory management. In a surprising turn, even after the Sharks opted out of making a deal, Elena passionately defended her business, expressing disappointment in herself for not making a better representation. However, the Sharks reiterated their concerns about the business model, leading to a unanimous decision to pass on Mama’s MilkBox.
