Retail, Branding, Goal Setting on Display Shark Tank Week 3

After having some negotiation blunders and tactics take the headlines from previous episodes of ABC’s Shark Tank, week three’s episode featured lessons on branding, food, and the overall retail industry.  Never fear though, negotiation lessons are always on display on the Shark Tank.

The first pitch came from Darryl and Randy Lenz who were there to pitch there Ride On Carry On product.  Their product is essentially a strap on child seat, which straps onto luggage.  The premise is to make getting around airports and airplanes easier by eliminating a separate child seat to lug around.  The idea is useful, as evidenced by the fact that the Lenz’s have established sales.  The sharks quickly come out and say that the retail business is a cutthroat marketplace that exists on small margins.  Very true.  Thus, licensing was bandied around by all of the sharks as the way to go.  Barbara Corcoran was willing to explore other options aside from just licensing, so the Lenz’s took her offer.

Following the Lenz’s was Ken Howell, who was representing Uncle Zip’sBeef Jerky.  The unique twist to the product is that the Beef Jerky is tasty and there are no preservatives used in the recipe.  Thus, the brand is local regional hit in Howell’s neck of the woods.  Howell is from Fayeteville, North Carolina.  Howell is well known around town and he is proud to carry on the Uncle Zip’s brand name in honor of his late father.  A few lessons were on display, the main one that that stands out is that a small business is a labor of love and not necessarily a path to financial freedom.  This is an important lesson that we see all the time.  A lot of small businesses are like ‘owning’ a job.  A big part of that would be not making much more profit than a regular job, but there is more to it than that.  It also includes BEING the brand or business, and in this case, everywhere Howell goes, he is referred to as ‘Jerky Man’ or ‘Uncle Zip.’  Being the brand/business sounds like fun when it something that you really identify with through and through.  Time and Time again, the branding sharks (Barbara Corcoran and Daymond John) have invested in brands and trademarks they have believed in.  In Howell’s case, the brand and the sales were too small in presence and volume to justify an investment.   Back to the lesson, if you are in a business that you are either not the right fit to be the face of, or you don’t want to lend your face to, then sub that out to a mascot, character, or striking personality.  A great example of subbing out the face of the brand was on display with the Broccoli Wad.

Broccolli Wad is a product by Johnny Gennaro, it is a simple rubber band type money clip.  Gennarro’s clever twist is to involve Vinny Pastore as an advertising pitch man.  Pastore is known for his role on The Soprano’s tv show.  Thus, he lends the perfect face to the product.  The product got some giggles out of the shark due to simplicity of it and Pastore’s presence.   The quick negotiating lesson that was on display was Barbara Corcoran quickly removing herself from the negotiation by saying she was ‘out’ emphatically because she did not get the product at all.  Again echoing the theme about the retail business being tough, the other sharks made their way eventually.  However, the sharks did bandy about ideas of how to make the best of the opportunity, and again, licensing the trademark came up, which brought the idea out from Corcoran to not just use Pastore as a pitchman for the product, but to use him as the FACE of the product.  Again, good branding is key to differentiating a product that is not innovating the market space that it is in.  Once Corcoran thought of the idea, she made an offer at the asking terms (which seemed fair), but made it contingent on Pastore becoming the face of the brand.  Pastore, naturally, quickly agreed and Gennaro relented shortly after that.  Lesson learned, if you are not meant to the be the face of the brand, then find one, or create a catchy fictional character like Mr. Clean.

Mike Abbaticchio and Shon Lees came on the show to present their lifestyle and clothing brand Trademarked ‘Hill Billy.’  They hold the trademark for Hill Billy in apparel.  And this is an important lesson, trademarks do need to be designated for product type.  Abbatticchio and Lees both harbored dreams of really promoting the brand through retail channels.  Each of the sharks Shot them down on that idea.  They pointed out the savagely competitive apparel industry and suggested that licensing was the way to go.  Fortunately, Abbaticchio and Lees were prepared, as they had cut a few small licensing deals all ready.  Eventually, Robert Herjavec got Jeff Foxworthy to join him on an offer that was to license the product and pay a royalty back to the founder.  Foxworthy wisely brought in Daymond John, with his apparel expertise, and they negotiated hard with Abbaticchio and Lees to stick to a licensing only deal, which they settled on.  One key thing that Abbaticchio and Lees mentioned as conditions that they would be able to promote the brand again if the licensing stalled out and the sharks shelved the project.  Always smart to build in escape clauses and expiration dates on contracts to minimize stalemates and floundering.  Good job on the founders’ part to bring this up.