Rachel started as a side business selling her kids hand me down clothing became a fashion frenzy. She does limited runs on her designs. Rags to Raches creates original, unique designs. Rachel is pitching Shark Tank Season 7. Rachel has her children hand out samples to the Sharks.
Rags to Raches have elastic top on Kids Rompers
Her clothing designs are Rompers with an elastic top that pulls down from the top. She has sold $792,000 in just a little over a year of sales.
Rags to Raches quickest selling clothes are the ones she is making. She has eighty-eight percent of sales are online.
Her profit on $792,000 in sales is $280,000. Their costs are high. Each unit cost between $7-10 and selling for $30 plus. Her money is tied up in inventory. The uniqueness is Rags to Raches barrier to entry.
She is at risk of being copied by others who will go to mass market at $19.99.
Rags to Raches has $215,000 in cash on hand. The Retailers are coming back asking for more product, but she doesn't have the inventory.
She has two lines of Rags to Raches. She said she doesn't want to compete with herself.
Company: Rags to Raches
Entrepreneur: Rachel Nilsson
From: Alpine, Utah
Ask: $200k for 10% equity
Companies in this episode: Insta-Fire, Custard Stand, PRx Performance
Season: Season 7 Episode 719
Sharks: Mark Cuban, Daymond John, Kevin O'Leary, Lori Greiner, Robert Herjavec
First Aired: 02/21/2016
Deal: Robert Herjavec for $200,000 for 15% equity
What do the Shark Tank Investors say about Rags to Raches
- Mark Cuban thinks Rachel is killing it, so why screw it up? She agrees with Mark, and at the same time, she wants to do retail stores. Rachel is not definite in her vision. Mark thinks she needs to stay online, but she can't make up her mind, so he is out.
- Daymond John is interested in Rags to Raches. He makes an offer. Daymond believes she takes the competitor out by licensing her product to mass market and she does the online marketplace. She knocks herself off. He offers $200,00 for 20% equity.
- Kevin O'Leary thinks Rachel will fit nicely in his portfolio providing $200,000 for 20%.
- Lori Greiner would offer the same as Daymond, and he is excellent at doing that, so she passes on making her an offer.
- Robert Herjavec asks Rachel what she wants to do, and she says she wants to make money, she wants to be Mrs. Wonderful. Robert makes an offer of $200,000 for 20%. Robert tells her about fifteen million this year, and they are a complete online platform. She counters Robert to $200,000 for 15%. She does a deal with Robert.
Rags to Raches after Shark Tank
Rags to Raches quadrupled sales after appearing on Shark Tank, and She stays true to the original marketing concept of selling limited clothing lines. The rompers are a hot ticket, and the kid's fashion industry loves her style.
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