Retold Recycling
DEAL
EPISODE SUMMARY
🕓 Air Date: February 17, 2023
Asking For:
$300,000 for 15%
Investor:
Mark Cuban
Deal:
$300,000 for 25%
PRODUCT SUMMARY
Retold Recycling offers a sustainable clothing recycling service, providing customers with bags to send unwanted clothing and household textiles for recycling instead of ending up in landfills.
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Background Story
Alan and Amelia, founders of Retold Recycling, are based in California and have created a solution to address the issue of textile waste. The apparel industry generates massive amounts of discarded clothing and household textiles, leading to environmental concerns. The idea for Retold Recycling came from the need to combat this problem.
The founders’ background and experience in the fashion and sustainability industry motivated them to tackle this issue. Amelia and Alan recognized the growing demand for convenient clothing recycling services, which led them to develop a model that allows people to recycle their unwanted clothing and textiles from the comfort of their homes.
The Product
Retold Recycling provides a simple and efficient solution to recycling unwanted clothing and household textiles. Customers request an empty Retold bag, which comes with a prepaid label. They fill the bag with around 5 pounds of unwanted items. The bag is then dropped off at a local post office.
While a single Retold bag costs $14.50, it is more than a recycling service; it is a convenience that people are willing to pay for.
The founders emphasize that the ease of using their service, especially for busy professionals and parents, makes it a valuable solution. Despite some price concerns, the convenience factor is a significant selling point for their customers.
How It Went
The company’s position before Shark Tank
Retold Recycling has seen impressive growth since its launch. In 2020, when it was founded, the company had sales of approximately $12,000. By 2021, its sales had surged to around $175,000, demonstrating a significant increase in demand for their service. The gross profit for the same year was 43%, indicating a healthy margin.
The company has forged partnerships with thrift stores, upcyclers, and textile recyclers to ensure that the unwanted items collected are effectively repurposed, eliminating waste. These partnerships are essential for the success of their recycling program. Additionally, Retold Recycling has identified another revenue stream by collaborating with brands looking to promote sustainability.
They offer a white-label solution, where brands can sell the bags with their branding to appear more eco-friendly to consumers. This business-to-business approach is a promising development for the company.
The Negotiations:
During the pitch on “Shark Tank,” the founders of Retold Recycling initially sought $300,000 in exchange for 15% equity. Mark Cuban made a single, non-negotiable offer of $300,000 for 25% equity in the company. After discussing and considering their options, the founders accepted Mark’s offer, which would provide them with the necessary capital and expertise to scale their business and take advantage of the emerging opportunities with brands looking for sustainability solutions.
The negotiation process involved some discussion about the company’s current costs, particularly the significant expense of shipping. Mark recognized the potential in scaling the business, adding multiple hubs, and creating region-specific SKUs to reduce shipping costs and increase convenience. Ultimately, the founders were swayed by Mark’s offer, which aligned with their vision for growth through partnerships with brands.
Mark’s experience and platform could help them tap into a broader market and realize their mission of reducing textile waste while offering valuable convenience to customers. The negotiation ended with the founders enthusiastically accepting Mark’s non-negotiable offer, and they left the Tank with a deal that could potentially transform their business.
