You bought the site on Flippa last year. What motivated you to buy, and why PotatoParcel?
Before acquiring Potato Parcel, I had recently quit my job in software sales. I had several eCommerce projects on the side, but without a 9-5, I also had more free time to began plotting my next big move. When I came across Potato Parcel, I saw great potential, and I knew right away that I wanted to get involved. I was able to negotiate a great deal to acquire the business, so I pulled the trigger at $42,000 and never looked back.
Can you give us any insight into how the business has faired since the acquisition?
The business is doing extremely well. It was instantly profitable and I recouped my investment quickly. We’ve continued to grow sales month over month, despite the many critics who said the site would never succeed. In the 13 months following the Flippa acquisition, we did $215,000 in sales, and things are continuing to accelerate with no signs of slowing down. Needless to say, it’s a great time to be an entrepreneur in the potato industry.
What was the process like applying to get onto Shark Tank?
It was actually quite lengthy. We first applied online and did not hear back from the producers for a few months. When we finally did hear back they asked us to send in an audition tape. Another few months went by after that, and then finally they asked us to come to LA to film the show. After filming, we were on edge because we weren’t guaranteed to air on TV, even though we pitched in front of the sharks. We were really hoping to air and were ecstatic when we heard we finally made it!
Once you were accepted, how did you prepare and come up with your your pitch?
We wanted to make our pitch fun, just like our product and company. So we decided to walk into the tank with potato costumes, sun glasses, and whip out potatoes from our back pocket. We also gave the sharks some funny potatoes too.
Riad (left) and PotatoParcel founder Alex Craig (right) pitching the business on Shark Tank
Did you go into it with any specific Sharks you wanted to do a deal with?
To be honest, we went into this not really knowing if we would even get an offer from any of the sharks. It can be a bit of a crapshoot sometimes with Potato Parcel, some people really get the business and love the idea, and others just think it’s a joke. That said, I did think Kevin (AKA Mr. Wonderful) would be interested, because of our high profit margins and the fact that he has invested in companies that sell customized products in the past.
What was it like pitching live to the sharks, and how did you deal with the nerves?
It was a lot of build up and preparation. Going through our pitch over and over again. Studying our numbers. Thinking of anything that sharks might ask us and having a solid answer for that. We were nervous for sure. A lot of heavy breathing. But once we started talking about our business it became more like a natural conversation with the sharks and the nerves subsided. That’s not to say it wasn’t intense, but the amount of preparation we put in really did pay off in the end.
Alex negotiated a royalty prior to selling you the business, can you tell us about that?
Alex sold 100% of the business to me on Flippa. However, as part of the sale we agreed that if the business was able to get on Shark Tank he would receive $1 from every potato sold for sixty days following the air date. Why did I agree? I owe Alex great credit for getting the initial traction in the early days of the business, and I also knew Shark Tank would provide a great platform to get the business in front of more people. Because of his contributions and the potential upside of the deal, the royalty was a no-brainer, and in the end Alex’s influence definitely helped us land a spot on the show.
You ended up with two sharks fighting over you, why did you go with Kevin over Robert?
It really just came down to their offers. When the other sharks backed out, Kevin O’Leary’s final offer was $50,000 for a 10% stake and a $1 royalty fee for up to $150,000. Robert Herjavec’s final offer was $50,000 for a 17.5% stake. In the long run, I though Kevin’s deal was the ultimately going to be the better deal (after the royalty gets paid off.) He is also a funny guy who really loved our quirky idea, and I think that because of his passion, he’ll be incentivized to continue to help us grow.
“The Queen of QVC” Lori Greiner (Left) and digital security mogul Robert Herjavec (Right) enjoying the sample products
What’s it been like working with Mr Wonderful since the show aired?
As of late, I have mostly been dealing with his PR and social media team. That’s one of the benefits of doing a deal with a shark like Kevin, he’s got a mountain of resources behind him and a lot to offer beyond the dollar signs. I’ve also had several calls with him since the show aired, and I’m excited to continue to grow the business with him moving forward.
What’s in store for Potato Parcel, and how can people follow what you’re up to?
We want to come up with new products, have more international ambassadors join our team, and possibly expand into a business including many quirky and funny gifts. But for now, we remain focused on our core offering, selling potatoes with customized messages inscribed on them. If people want to check in on the company, the best place is our official twitter. As for me, I currently work full-time on Potato Parcel and I see myself doing this for as long as possible! I’d prefer to always work for myself, and I prefer to do that selling…potatoes.