'Shark Tank' Season 14: What made Sharks back out from investing in Expedition Subsahara?
LOS ANGELES, CALIFORNIA: Expedition Subsahara is a firm that sells woven baskets and other hand-crafted home décor inspired by her hometown of Africa. Sofi Seck pitched her company on Season 14 of 'Shark Tank,' but she did not get a deal.
The global market for handcrafted decorations is estimated to be worth $680 billion, and Expedition Subsahara is making steady success, but Sofi desired to bring on a new partner to support future expansion. Sofi had no plans to go on television at first, but one day she received an email from a 'Shark Tank' producer asking for additional information about her firm. She is a huge fan of the series and couldn't pass up the chance. She was cleared for the series after various interviews and tedious paperwork.
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Sofi entered 'Shark Tank,' asking for $500,000 in exchange for 10% of the firm. Sofi Seck began Expedition Subsahara, her handcrafted baskets in Senegal, Africa. She founded the business in 2017. After an unsuccessful Kickstarter effort, the person with whom she co-founded the company stepped away, leaving Sofi to run the company on her own. She now weaves baskets with a small staff at The Foundry, a St Louis artists' collaborative. They also employ around 120 Senegalese women throughout Africa. Each basket is handcrafted from sweetgrass and vibrant fibers. Some of the larger hamper baskets might take up to 40 hours to create!
On the company's website, there are hundreds of baskets, coasters, pendants, and other hand-woven goods. Prices for minor things range from $29 to over $200 for bigger baskets. Sofi tells the Sharks that 95% of her sales are done online. She claims to have sold $900,000 this year alone, which obviously pleased the Sharks. They claimed to have made $1.6 million in sales last year. Their gross profit was well over a million dollars, with a margin of roughly 60%. However, her net profit was just $75,000, which appears to be a source of concern for the Sharks. She claims to have made $40,000 in sales between March and May of 2020. With the Black Lives Matter movement, she witnessed a significant increase in sales, prompting her to quickly scale up production. She brought in 120 weavers and covered all of their expenditures, including food, accommodation, and so on. This reduced her profit margins.
Shark Robert Herjavec couldn't help but ask Sofi if she paid the workers a flat wage, which she verified. She wanted the artists to work solely for her firm, therefore the choice. Shark Kevin O'Leary inquires why she does not just pay them by the piece, to which Sofi responds that she thinks the laborers will teach the new craftsmen who are coming in and working for them. She promises the Sharks that when she brings in fresh workers, her laborers will work as master weavers.
Last year, she claimed to have spent $400,000 on advertising, which worried the Sharks since they could see where her money was going. Sofi went on to say that she made $160,000 in profit last month. Her average sales remain at $260,000, with a 60% margin. Her client acquisition cost is $116, leading the Sharks to believe she is losing money. She explains that she is not losing money, but rather breaking even.
She has noticed that acquiring customers is becoming increasingly difficult, therefore, she intends to reach the public with her products through retail. The collective groan of the Sharks indicated that none of them were fans of retail. Kevin was the first to withdraw. Shark Lori Greiner, who couldn't get her mind around the valuation, sought herself out as well. Shark Mark Cuban doesn't see how Sofi can turn the money around and make a profit at the end of the day, so he backed out of the deal as well. Robert, who would rather gamble on Sofi, could not possibly bet on her business since he sees no return. Daymond does not believe the investment is for him, therefore he withdraws from the deal as well.
'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.