'Shark Tank': Why did Wendy's Gnome Shop pick Daymond over Barbara for the $200K deal?
Who knew that a pitch for gnomes would result in an intense bidding war amongst Sharks on 'Shark Tank', but that was exactly what went down on the recently aired episode of ABC's award-winning show. Wendy Hoffmeister stepped into the tank to pitch for her cute decor pieces- gnomes. Although the Sharks were initially very skeptical about investing in a business that just manufactures gnomes as decor pieces for homes, they were sold once Wendy began sharing the numbers.
Wendy revealed that she made a whopping $688,000 in sales, of which her profit margin was an impressive $135,000 last year. All the jaws dropped on the floor when she shared that it cost her just $3 to make a gnome, but she sold it for $35 each. This information immediately made Wendy's Gnome Shop very appealing to the Sharks. But unfortunately for Wendy, Mark Cuban, Lori Greiner, and Kevin O'Leary decided to sit out on the deal, as they didn't want the gnome business in their portfolio. On the other hand, Barbara Corcoran and Daymond John were more than happy to part with their money and invest in the business.
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Wendy came in seeking $200,000 for a 20% stake. but Daymond rolled out the first offer by asking for a 35% stake instead. Barbara matched Daymond's offer by asking for just a 30% stake in exchange for $200,000 but she wanted a royalty of $1 per unit sold for perpetuity. Daymond wasn't willing to back down either, so he matched Barbara's offer by revising his offer to a 30% stake as well, but a royalty of 50 cents per unit sold until the $200,000 is paid off. This was just the beginning of the bidding war between Barbara and Daymond, as neither was willing to back down and kept revising their offers to make it more appealing to Wendy.
Barbara decided to remove the royalty from her offer, hoping to win over Wendy. Daymond too made the same offer. It was finally time for Wendy to make the tough decision of which Shark she wanted to close the deal with. She tried to pit the Sharks against each other by making a counteroffer of $200K for a 25% stake and declared that she would close the deal with whoever took it up. But neither of the Sharks were interested in giving up the equity so they refused. Wendy surprised everyone by declaring that she wanted to close the deal with Daymond.
If you're wondering why Wendy picked Daymond over Barbara, then we got you covered. After leaving the tank, Wendy explained that she was initially leaning towards Barbara but in the last minute, she changed her mind and decided to go with Daymond due to her gut instinct. Looks like Wendy made the right decision considering Barbara has no knowledge on gnomes until this episode.
'Shark Tank' Season 13 airs every Friday at 8/7c on ABC.
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