The Basics
- Company: Boom Boom
- Owners: Chelsea and John Pinto
- Product: Energy Nasal Inhalers (Pocket Aromatherapy Products)
- Asking Price: $300,000 for 10% equity
- Final Deal: None
- Sharks Who Took The Bait: None
- Season/Episode: Season 10, Episode 4
Boom Boom Energy Before Shark Tank
John and Chelsea Pinto are two entrepreneurs from Los Angeles, California. While on a trip to Thailand in 2010, they saw that many people were carrying around nasal inhalers for the purpose of providing enough energy to party until dawn. Wanting to learn more, they talked to some locals who told them a Muay Thai fighter used a nasal inhaler to get back up after a big knock-out.
They were inspired to create a similar product for the U.S., so once they returned, they worked with chemists and medical professionals to develop a nasal inhaler that would offer the same benefits as those they saw in Thailand, but include healthier ingredients.
Their product, called Boom Boom Inhaler, was selling on Amazon when John and Chelsea initiated an Indiegogo crowdfunding campaign. Their goal was to get their product into retail stores.
The Pintos decided to pitch their product on Shark Tank because they had been seeing healthy growth and wanted to get more exposure for the brand. They figured appearing on the show would increase awareness for the inhaler, but they knew that additional investment could bring the product to the next level.
Boom Boom Energy On Shark Tank
John and Chelsea walked onto the stage and asked the sharks for $300,000 in exchange for 10% equity in their company. What they were pitching was what John called, “a new best friend for your nose.” He said it was time to turn breathing into money.
Chelsea continued, saying that eyes have eye drops, mouths have mouthwash, and lips have lip balm. However, there wasn’t an everyday healthy and safe product for your nose. Their all-natural nasal inhaler was made from essential oils, menthol, and other stimulating scents. While most nose products were made for congestion or allergies, Boom Boom was intended for intense refreshment and rejuvenation. They then demonstrated how to use the product by uncapping the tube, placing the barrel at the nostril’s tip, and inhaling deeply.
John said it was like chewing gum for your nose, but was ten times mintier and more refreshing. Once you inhale, you experience a cooling, tingly sensation.
The sharks wanted to try it, so the Pintos passed samples to them. All the sharks seemed to be significantly invigorated, and many shouted, “Whoo!” after inhaling. John explained that they offered five scents – all with similar intensity – but that Tropical Rush was their best-seller.
Robert asked if there were other products like theirs. Chelsea said there were two other inhaler brands, but they were more medicinal and earthy, rather than fun and vibrant. Guest shark, Charles Barkley, asked about their sales numbers. John told them the company made $754.000 the previous year and was on track to make $1.1 million during the current year.
Lori asked where they sold the inhalers, and Mark wanted a breakdown of sales channels. John said 20% of sales were direct-to-consumer on their company website, Amazon contributed to 30% of total sales, and 45% were sold to wholesalers and other distributors. Charles asked about their costs. John told him a single pack costs 70 cents to make, and they sold it on their website for $7.95. Net profit the previous year was $125,000 after John paid himself a salary.
Charles also wanted to know where it was made. John said it was manufactured in southern California. Kevin asked why they didn’t take manufacturing offshore so they could lower their costs. John replied that, at scale, they could bring costs down by 25%. They had decided to keep manufacturing in the U.S. because they wanted to ensure the ingredients were safe and high-quality.
Mark asked what they were charging wholesalers. John told him the wholesale price was $1.50, and Kevin told him that wasn’t a good margin. The news got even worse when John said the retail price was $3.99. Kevin was astounded that they were selling at a much higher price point on the website, and the low retail price was undercutting their margins. John said he had tested price points between $3.99 and $5.99 at retail and had found that $3.99 tested best for what was considered an impulse buy at retail.
Charles asked if this was their full-time job. It was for John, but Chelsea worked as a dentist, so she was only available part-time for the product.
Kevin was still stuck on the price differential between the website and retail. He told them their margins in retail suck. But John defended his retail pricing strategy because the product is more of an impulse buy at retail stores.
When asked if he had other partners, John said there was a cofounder who received the same amount of equity as he did – 36% – and that two other investors contributed $200,000 for 25%.
Charles pointed out that they wanted more funding from the sharks in exchange for less equity, but John defended that decision because the product was currently making good sales. It had more value now than it did when the original investors chipped in. But Kevin rebutted, saying there was value up here (the sharks) too. Kevin continued. He said he was intrigued by the product and how well it had sold thus far but couldn’t justify giving them $300,000 based on a $3 million valuation. He was dropping out.
Lori was also impressed by what they had accomplished but was concerned about giving them $300,000 for a product that may only be bought one time. It didn’t resonate for her, so she was out.
Charles thought the product was neat, but not something a person would use on a consistent basis. Before telling the two he was going to take a pass, he urged Chelsea not to quit her job as a dentist.
Mark didn’t feel that the valuation was too high, but he had a problem with the margins – particularly if they were planning to expand heavily into retail. He was out.
Robert really liked the product – and noted that most of the other sharks did too but had a problem with its valuation. He would offer $300,000 for 36% – the same amount of equity owned by John. He stated he couldn’t get to the $3 million valuations at a lower margin. At that point, Kevin told the PIntos they had asked for too much cash.
John said he couldn’t give away that much equity. He asked if Robert would accept 15%. Robert immediately said, “no.” He didn’t want to negotiate down from that number.
John countered again. He said the highest he could go was 20%, but Robert said he couldn’t do that. The Pintos left the stage without having made a deal.
Boom Boom Energy After Shark Tank
Despite not securing a deal with a shark, Boom Boom Energy seems to be thriving. Besides selling on the company site and Amazon, the product is now sold at Walmart, which is quite an achievement!
On the website, the price for a one-pack is still $7.95, but if you buy multiple packs, you can save money. The price for three tubes is $19.95, and for five tubes, you’ll pay $29.95. You also have the opportunity to make your own pack and choose among the brand’s five scents. The reviews for the inhaler are mostly positive.
The retail price at Walmart is still way below what a tube costs on the website. A one-pack at the retail giant costs $4.76, which is 60% below unit pricing on the site. However, Walmart offers only one of the scents – Wintermint.
Although sales figures aren’t available, Boom Boom has made a big impact on social media. The company has 42,000 Likes on Facebook and 102,000 followers on Instagram! Is this a sign that people are buying the inhalers more than just one time? If the product does actually increase energy, there’s reason to believe the Boom Boom Inhaler could easily rack up repeat purchases.
Disclaimer: The information provided in this article is strictly informational; Seo Insights is not affiliated with Boom Boom, SharkTank, or any of its subsidiaries.