Vestpakz Backpacks
NO DEAL
EPISODE SUMMARY
🕓 Air Date: January 13, 2015
Asking For:
$50,000 for 10%
Investor:
No Deal
Deal:
No Deal
PRODUCT SUMMARY
Vestpakz is a vest-pack combination designed for kids, providing a more comfortable, convenient, and stylish way to carry belongings.
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Background Story
Vestpakz, showcased on Shark Tank, is the brainchild of Michael Wooley’s daughter, who conceived the innovative product in the 6th grade. As the Chief Financial Officer of Vestpakz, Michael presented the pitch alongside Arthur Grayer, the official licensee of the product. The concept for Vestpakz emerged from a school science project where Michael’s daughter was challenged to identify a problem and devise a creative solution. Recognizing the discomfort caused by heavy backpacks, she envisioned a novel backpack design that evolved into Vestpakz.
The functional design of Vestpakz combines a vest and a backpack, offering a more comfortable, convenient, and stylish alternative for kids to carry their belongings. The journey of Vestpakz extends beyond the invention phase. After winning contests, including the Million Dollar Idea Challenge featured on Oprah Winfrey in 2003, the product gained initial recognition. However, due to financial constraints, significant progress was impeded for several years. The licensing agreement with Arthur Grayer marked a turning point, leading to the product’s recent entry into major retailers.
The daughter’s initial success in inventing Vestpakz during her 6th-grade science project showcases the entrepreneurial spirit within the family. The founders highlight the product’s evolution, from winning contests to a recent presence in Walmart with a test run in 75 stores. The Vestpakz team is poised for growth, with ongoing discussions about potential reordering in Walmart and further expansion into other retail channels, including a test run in Toys “R” Us.
The Product
Vestpakz, a unique fusion of a vest and a backpack, is meticulously designed to address the challenges associated with traditional backpacks. The product functions as a practical and stylish solution for kids to carry their belongings comfortably.
The vest component is strategically integrated to distribute weight evenly, alleviating the strain caused by heavy backpacks. This functional design enhances convenience and provides a trendy alternative for young users. The Vestpakz is not merely a fashion statement; it offers practical benefits by allowing users to carry important items up front in easily accessible pockets.
This feature is showcased during the pitch, emphasizing the convenience of accessing essentials like money. Vestpakz can be purchased through various retail channels, as demonstrated by its brief stint in Walmart. The licensing arrangement with Arthur Grayer positions him as the exclusive seller of the product.
The founders express optimism about potential reordering from Walmart and are actively exploring additional retail opportunities, including a test run in Toys “R” Us. Vestpakz caters to the evolving needs of young users by combining functionality and style, making it an appealing choice for parents and children alike.
How It Went
The company’s position before Shark Tank
Vestpakz entered the Shark Tank with a snapshot of its performance and market position. The company had recently undergone a test run in Walmart, being featured in 75 stores during January and February. However, the sales figure for this period was relatively modest at approximately $10,000. The founders highlighted ongoing discussions with Walmart about potential reordering and expressed optimism about the upcoming back-to-school season as a critical period for the product’s performance.
The episode also unveiled the licensing arrangement with Arthur Grayer, the official licensee of Vestpakz, who is exclusively authorized to sell the product. Arthur pays a 6.5% royalty fee for each unit sold. Additionally, the founders mentioned a test going into Toys “R” Us, specifically FAO Schwarz, indicating efforts to diversify their retail channels. Despite these promising steps, the Sharks expressed concerns about the company’s health and market position.
The low sales figure in Walmart’s extensive network raised doubts about the product’s appeal to consumers. The founders mentioned sacrificing $180,000 of their own funds into the venture, highlighting the financial commitment and personal sacrifices made to bring Vestpakz to market. The focus remained on the product’s potential, recent market entry, and the challenges faced during its development and distribution phases.
The Negotiations:
During the negotiations on Shark Tank, Vestpakz entered the Tank seeking a $50,000 investment in exchange for a 10% equity stake in the company. The pitch was delivered by Michael Wooley, the Chief Financial Officer, and Arthur Grayer, the official licensee of Vestpakz. The Sharks were intrigued by the innovative product, which combined a vest and a backpack to provide a more comfortable and stylish solution for kids carrying their belongings. However, concerns arose when the founders disclosed that the product had achieved only $10,000 in sales during a test run in 75 Walmart stores.
The negotiation took an unexpected turn when it was revealed that the inception of Vestpakz dates back to 2003 when Michael’s daughter invented it in the 6th grade. The prolonged development timeline, spanning over 16 years, raised eyebrows among the Sharks. The entrepreneurs explained that financial constraints had delayed progress until the recent licensing agreement with Arthur Grayer. Despite positive comments on the product’s functionality, the Sharks, including Kevin O’Leary, Mark Cuban, Barbara Corcoran, Lori Greiner, and Robert Herjavec, became increasingly skeptical about the company’s ability to drive sales and the market viability of Vestpakz.
In the end, none of the Sharks extended an offer, citing concerns about the product’s past performance, low sales figures relative to the extensive distribution, and doubts about the entrepreneurs’ ability to navigate the market successfully. The negotiation concluded without a deal, leaving Vestpakz to navigate its future without the backing of the Shark Tank investors.
