Do you hate new pieces of fad workout gear? Does it seem like you're always buying new stuff? Well... meet the last piece of fad workout gear you'll ever need from Terra-Core Fitness.
Terra-Core Fitness has developed a new fitness devices that can fit in just 3 square-feet but activates four times the muscle tissues. It can be used to lift, balance, bench press, do a burpee on, or even jumped on and over like a step. It essentially looks like a step with a gel surface for comfort when lying on it but also to provide some instability when doing balance exercises and hand-holds along the sides and at either end. Guest shark Anne Wojcicki and Lori both think that it's pretty comfortable to use.
Somehow, because our patent system is stupid and, let's face it, broken, the company has managed to get a design patent and a pending utility patent.
The entrepreneur behind Terra-Core Fitness used a Kickstarter campaign to get going in 2016, raising $95,000. The company began actually selling and shipping product in 2017 and has $2,100,000 in total sales. So far, the sales number break down as 38% direct to consumer and 38% to commercial locations (read: gyms). The last 24% of sales were through retail channels.
The Terra-Core Fitness "system" had been selling at $279 but will (soon) begin selling at $199 per device which the sharks roundly approve of. The landed cost from manufacturing in China, including tariffs, is $73 per unit but the entrepreneur thinks he can get that down to $45 per unit.
Terra-Core Fitness is projected to "net" $850,000 in the current year but will only break-even. In the following year, the company is projecting $1,400,000 in sales with $200,000 in profit.
The entrepreneur trying to bring Terra-Core Fitness into your home has been in the fitness industry for twenty years. He had previously been the Vice President of Franchising for Gold's.
Making A Deal
Lori attempts to ask the entrepreneur about which advertising channels he's found effective but is spoken over by Kevin who throws out an offer of $300,000 for 15% equity plus a $20 per unit royalty until it earns $1,000,000 back.
Anne questions the entrepreneur about where he foresees earning ongoing revenue given that the fitness industy has so many trends. But the entrepreneur explains that, with his app model to which users can contribute their own workouts and the subscription model he's got planned out, ongoing revenue shouldn't be a problem.
Lori cites her Simply Fit deal, saying that they made $100,000,000 in a single year and, to date, has grossed $180,000,000 and can still be found in stores everywhere. Daymond disputes this, saying he doesn't see Simply Fit anywhere anymore, so Lori offers $300,000 for 22.5% in equity. Daymond then drops his offer another 5%.
The entrepreneur says that a royalty really squeezes the cashflow in a business and, because of this, selects Lori as his new partner.