Easy Treezy
Easy Teezy is a company that wants to make decorating for Christmas as easy as possible by creating an artificial (but festive!) Christmas tree. Easy Treezy has developed an ultra-light tree with built in lights and that snaps together magnetically and is so simple one person can do it by themselves. They even have a version that is decorated.
Both versions of the Easy Treezy can be stored in a lay-flat box (even the one with ornaments, even with the ornaments). The decorated version sells for $779 while the undecorated version sells for $599.
Robert hasn't forgotten about the Modern Christmas Trees pitch from Season Nine[1], and asks about its sales price of between $600 and $800 but is told that Modern Christmas Tree and Easy Treezy are selling to different customers.
Easy Treezy is also in several big box retailers such as @Home where it is in 210 locations. There, the tree sells for $299. The entrepreneur claims it's the same size tree being sold just a different quantity of lights. He claims Easy Treezy can customize a tree for each retailer.
When Mark asks about the company's margins, the entrepreneur responds that the margins are at about 35%.
In the previous year, Easy Treezy saw $605,000 in sales and expect to do $2,200,000 by the end of the year in which this episode aired. 15% of all sales is retail. It is unclear whether was 50% or 15% of business is done direct to consumer through the company's website. The entrepreneur also stated that the product is sold on Amazon.
The entrepreneur states that he is from Wisconsin, originally, and that his family used to cut down their own tree every year until his mother got sick and could no longer participate. That inspired him to create a tree that someone could put up all by themselves.
When the entrepreneur begins to delve into finances is when he runs into trouble. After stating that Easy Treezy carries no debt and has no outside investors, he states that he began the company with $500 which elicits a scoff from Kevin. He states that he's "involved with Eat My Tree" and that he knows the pricing on these things.
The entrepreneur then goes on to say that the previous year served as a data collection point, finding out what customers want and what they'll spend. From that data, Easy Treezy budgeted $120,000 in the current year for Google Ads. Kevin then responds that he will be disappointed at how few the company will sell above the $299 price point. Also, when the entrepreneur points out that he uses a contractor for his ad buys, Mark states that that will be a problem.
Mark says that he thinks it's important for an entrepreneur to be a great digital marketer themselves because direct to consumer sales is where the most profit is. That the entrepreneur is contracting out the marketing aspect says to Mark that they don't have "it" and, for that reason is out.
The entrepreneur points out that they have a verbal commitment from Home Depot for 70,000 units worth $8,500,000 in sales but Barbara is unhappy with the way they handled the deal and is, for that reason, out.
Lori, meanwhile, just thinks the company is over valued and doesn't want to play.
Robert, likewise, thinks the business is over valued and thinks that it's worth $1,000,000 which means he would need to own 40% of the business. When the entrepreneur asks if that's a real offer, Robert says he'll make it if they'll take it which, of course they won't. They try to talk Robert down to 20% but, knowing he's the last option they have, he says he won't negotiate. They try again with 25% but Robert says he can't because he needs to put a value on the risk he's taking.
In the end, the deal falls through because the entrepreneur won't part with 40% of the company, stating that 25% is the absolute best he can do. But this doesn't interest Robert and Easy Treezy leaves the tank without a deal.
Notes
- ↑ We salute Robert on his memory! Modern Christmas Trees was a company that made stylized wire Christmas trees that Barbara invested in back in Season Nine's Holiday episode.