'Recycling should be public utility': 'Shark Tank' fans slam 'sketchy' ReTold Recycling's business model
LOS ANGELES, CALIFORNIA: 'Shark Tank', which returns tonight after a two-week sabbatical, has introduced viewers to a service that recycles clothing and fabric. As co-owners Alan Yeoh and Amelia Trumble enter the Tank in the hopes of impressing the Sharks with their business model at ReTold Recycling, it not only baffles the Sharks but eventually leads to a surprising offer.
'Shark Tank' entrepreneurs Amelia and Alan presented the Sharks with an alternate approach that would beautifully change the process of recycling used garments and prevents them from being wasted in landfills in Season 14, episode 14. ReTold Recycling is a brand that distributes different-sized biodegradable bags to clients' homes, which are filled with discarded garments that would otherwise wind up in landfills. Depending on their condition, these garments are subsequently repurposed, recycled, or donated to thrift stores and charities. Although the Sharks were fascinated by the concept, they were not convinced by the business model.
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Why was ReTold Recycling's business model disliked?
Amelia and Alan enter the Tank in pursuit of $350,000 for 15% of ReTold Recycling. Shark Kevin O'Leary inquires as to how they obtain clientele. Amelia said that there is a market, that they have been running Google Ads, and that the demand has made their business. She also mentions that the clients only pay for their services, not for the garments they are recycling.
A single bag costs $14.50, which the company obtains from customers. They receive 10 cents each pound from their thrift store partners. Shark Mark Cuban wonders why anybody would use their service when they can donate their worn garments to Goodwill or other charity for free. Amelia observes that those places will not accept worn undergarments or anything else that cannot be recycled. Shark Lori Greiner adds that $14.50 feels exorbitant to her. Amelia mentions that there isn't a lot of pricing resistance. Their revenues were roughly $12k in July 2020, around the time they began. Their revenues increased to roughly $175k by 2021. Their gross profit was 43% last year, and they hope to close at $500k by the end of the year.
In terms of expansion, they have brands approaching them for a sustainable solution like the plug-and-play program. They are coming for a consumer-facing program. They have just started with one brand at the moment. Shipping costs account for almost 80% of their revenue, thus it is critical that they grow up so that they can truly negotiate better prices and new shipping sites. At the time being, they only ship to one place in California. Amelia claimed they are hoping to negotiate a similar agreement when Mark inquired why they don't include someone who buys clothes in California.
Kevin does not strike a deal. Shark guest Emma Grede, like Lori, respects the purpose but is unsure if they would be able to earn money in the business. Shark Robert Herjavec sees no business to invest in.
Mark advises charging an office building and asking them to buy the bags in bulk, and they are also responsible for the mailing, and they can just charge $2 on each bag, which is profit for the firm. Amelia claims that they require the Shark's assistance with the invention. Mark offers $300,000 in exchange for a 25% interest. Following some back and forth, Amelia and Alan counter Mark's offer with $300,000 for 22%, to which Mark objects. They wind up committing more equity than they anticipated.
'This sounds like a weird business'
Not being able to understand what the company's business model is a fan asked, "So, I pay someone to take my clothes to sell them??" Another viewer asked, "I pay you 14 dollars a month to send you my used underwear, you say?" One fan also quipped, "When half of your airtime is explaining the service it's not a good service lol." A fourth fan wrote, "This sounds like a weird business."
Further slamming the co-owners a fan wrote, "These are people who heard the word sustainable and decided to capitalize on the eco/ethical clothing trend." Questioning the liability of the service a person asked, "Even if you’re lazy AF there are those sketchy clothing drop boxes all over the place.. why would you pay $15 for this when there’s not even a guarantee your clothes will be recycled!" Another person added, "HATE THIS. Recycling should be a public utility."
'Shark Tank' Season 14 airs every Friday at 8/7c on ABC. Missed an episode? Been wanting to catch up? Episodes can also be viewed the next day on demand and on Hulu. Not just that, you can also watch old seasons and episodes on Amazon Prime Video and iTunes.
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