tv The Profit CNBC July 4, 2018 10:00am-11:00am EDT
is really in seeing aristotle's progress. for now, we're going to take baby steps, and if i could get a decent return on my investment, and he can make a solid living, i would consider that a pretty good dads on the go. tonighchris: yeah, exactly. lemonis: l.a. entrepreneur found a niche designing bags for new dads... chris: she came home with literally, like, a dozen flowery diaper bags. and i said, "no way." i did not want anything like that. lemonis: ...creating a whole new product category... chris: while it was filling a niche, it was also becoming a symbol of fatherhood. lemonis: ...and generating millions in sales. this bag's frigging awesome. chris: stop. lemonis: but 15 years in, the business is at death's door. chris: i drove it into the ground, and it's no longer capable of surviving. lemonis: the owner, chris, lets his fears get the best of him. chris: i-i-i actually wanted to -- to -- i'm sorry. i'm forgetting my point. lemonis: he's lost faith in his product. and do you make this bag still? chris: no.
lemonis: you're, like, "no, no, no. it's too much revenue." he's lost faith in his skills. chris: i did a sketch once for my factory, and they laughed at me. yeah. lemonis: now he's about to lose everything. chris: i've dealt with bullying. i'm just built more sensitive. lemonis: if i can't help him regain his confidence... meredith: is this a back-off moment? chris: a back-off -- meredith: that's fine. chris: no, no. well, i mean... lemonis: ...diaper dude will disappear. chris: [ sighs ] we got to take that sign down. say goodbye to diaper dude. lemonis: my name is marcus lemonis, and i risk my own money to save struggling businesses. we're not gonna wake up every morning wondering if we have a job. we're gonna wake up every morning wondering how many jobs we have to do. it's not always pretty. everything's gonna change -- everything. but i do it to save jobs, and i do it to make money. this... lemonis: let's go to work. lemonis: ...is "the profit." ♪
some people may wonder why i'm interested in diaper bags. yeah, it's a niche product, but bags aren't. it's a giant market. and quite frankly, with chris' creativity, i think he could do a whole lot more. as we know, dads are more involved in raising their kids than ever, and the fact that one person had an idea to address the market, well, that's interesting, and i want to meet him. ♪ hello? when i arrive at diaper dude, i walk into this giant space, and it almost looks like there's not even a business here anymore. made me think that i found the wrong suite. hello? chris: hey! lemonis: hi. i'm marcus. chris: marcus, it's a pleasure. lemonis: what is your name? chris: chris. lemonis: chris, nice to meet you. meredith: i'm meredith. lemonis: meredith, how are you? chris: it's so awesome to have you here. this is diaper dude headquarters. this is where we inventory, fulfill, and ship out. lemonis: diaper dude.
do you have a bag i could see? chris: oh, my god, yeah, of course. ♪ this is actually what started the brand 15 years ago. it literally is just a messenger bag that you can now hang from a stroller 'cause it's a popular thing to be able to hang it from the stroller. it's compartmentalized. it can be messenger-style. so you essentially can be hands-free. lemonis: dads on the go, right? chris: yeah, exactly. lemonis: where'd you get the idea from? meredith: it's a funny story, actually. he tells it well. chris: so, we have three children. our oldest is 18, our youngest is 13, and then we have a 16-year-old. lemonis: how long have you guys been married? meredith: 20 years. chris: when she was pregnant, she was at a sample sale and came home with literally, like, a dozen flowery diaper bags, and they were leopard print and all different stuff, and i asked, "where's my bag?" and she said, "take your pick." and i said, "no way." i did not want anything like that. so i just searched for bags in the marketplace. there was nothing out there. meredith: you really created a category for men. lemonis: what were you doing at the time?
chris: i had my own dog-walking business. lemonis: okay, dog walker. that's cool. by the way, this is a cool dog-walker bag. poop bags, leashes, treats. chris: totally utilitarian. lemonis: i hate the material, though. meredith: well, it's, like, the canvasy -- lemonis: feels like a cheap canvas, though. there's this one... chris: this one is -- this one is currently selling at buy buy baby. lemonis: oh, it does? chris: yes, yeah. so, like, buy buy baby is one of our big accounts, and they're part of bed bath & beyond, essentially. meredith: so it's, like, the baby version of it. chris: a lot of the diaper bags -- meredith: it just didn't exist before that, you know -- lemonis: do you guys work together every day? meredith: yes. chris: no, no. basically, i mean, i run everything by her and -- meredith: um, no, well...no. but it's a family business because it's our business, right? and we run and bounce off ideas all the time. chris: and the point of where we are -- meredith: this is really chris' business. this is really chris' business. lemonis: okay. how much revenue will you do a year? chris: well, at our height, we were almost $2 million. lemonis: how much will you do now on an annual basis? meredith: we're in a huge deficit. i mean --
chris: yeah, it's just under 5. sales have dipped tremendously. like, one of my buyers has been rejecting a lot of my product, which has been really frustrating the past two years. lemonis: a big, mass customer? chris: yes, yes. so that's made it a little more challenging to keep things running smoothly with income. ♪ this was the first bag i started out with, along with this bag. lemonis: this is how the company started right there? chris: yeah. lemonis: and these sold well? chris: they did, and they still do. lemonis: who designs the bags? chris: like, this one, i put together. plus, our messenger bag, and then, i ended up hiring two designers that i work with. lemonis: how much of the $2 million came from these three items? chris: i would say the majority came from these. lemonis: and if you designed these, why did you get away from designing? chris: because it was not necessarily my forte. like, i -- [ laughs ] lemonis: i mean, maybe it wasn't your trained... chris: right. lemonis: ...skill, but if you made a bag that generated several million dollars, maybe you should not be dog walking anymore. chris: [ laughs ] lemonis: and do you
make this bag still? chris: no. lemonis: you're, like, "no, no, no. it's too much revenue." chris: no. lemonis: "i don't want it anymore. get rid of it." chris: but this is -- i wish. no, this is one of my favorite bags. but what happened is -- lemonis: but why'd you stop? chris: because the price point in the market was becoming -- it was too high for my newer buyer. and she thought i was too trendy, too hip. lemonis: this bag's frigging awesome. chris' designs actually sold, and they sold very well. and then, one day, he just stopped designing 'cause he met a buyer that didn't like it. it seems like he should just trust his instincts and go with what brought him to the success that he got to. there's one common theme, in my opinion, that is throughout. it's the quality of the materials. is it a lower-grade canvas? chris: it's a 600d, so it is more of the lower version, as opposed to, like, 1,000d and things like that. lemonis: and so, what would this bag cost to make? chris: $15. lemonis: and if you upgraded the quality of the material? chris: it would probably go up at least close to $1 minimum, depending on --
lemonis: $1. what would you sell this for? chris: $64.99. lemonis: and $65 retail? chris: yes. lemonis: with design on products like this... chris: yeah. lemonis: ...the last dollar you spend is the most important dollar. it's $1 to increase the fabric, and it's another $1 to increase the zipper, and there's little things you could do -- put an extra $3 in it -- and you go to $18. cost is still a 72% margin. chris: amazing. lemonis: i'd rather have a low cost to operate and a slightly slimmer margin because i invested it into the product to separate myself without separating price. chris: right. lemonis: before you launched, did you get feedback in the marketplace? meredith: i mean, yeah. you run it by -- we have a lot of people in our community, i think, that we would... chris: right. meredith: ...run ideas by that we trusted. lemonis: nothing formal? chris: no. i ask her, and if she says yes, then... lemonis: but what is all this? chris: these were all my attempts to get new product into the market. this is what we call dapper dude,
and it's two skinny ties for two cool guys. it's for dads with kids. we also did baby carriers. lemonis: is that what this is? like... chris: yeah, that's part of, i think, a hood for the top. lemonis: what is this? chris: this is a bottle holder, insulated bottle holder. lemonis: are these for beer cans? meredith: they could be. see? multifunctional. chris: so, this is an idea of, like, a pacifier pouch. lemonis: these additional product extensions that chris tried to come up with, candidly, makes no sense to me. i mean, it was almost like he just threw a bunch of crap against the wall and saw what stuck. chris: there was a lot of competition in these areas, so they didn't perform as well. so -- lemonis: well, they didn't perform. chris: i mean, they're -- lemonis: they're also sort of... chris: cheap. lemonis: yeah. lemonis: and so, how do all these ideas come to be? you started with something that had, like, meaning and substance and a story behind it. and then, you had a little bit of success, and then you're, like... chris: i was just trying to -- meredith: buyers. you were trying to please the buyers. lemonis: those are desperation products. a buyer says, "do it," you do it, and it ends up right there.
meredith: we've invested money, even in people, where it was almost like empty promises. chris: to give you an example, i had a marketing company that i worked with and came up with the concept of true dude. and true dude is a brand described as a lifestyle brand designed to honor today's men who leave a positive impact. lemonis: did you write that? chris: no. lemonis: you hired them to do this? chris: correct. that was, like, a huge $200,000 investment that was supposed to help revitalize the business and basically flopped. lemonis: one of my biggest complaints with companies is how they prioritize how they're gonna spend their money and their working capital. and when you're just starting out, you want to invest all that you have into the people and the product and the process, instead of spending $200,000 with a marketing firm to design a campaign about your image. look, it's fine if you're procter & gamble, but not if you're diaper dude. chris: i envisioned, when i started the company, eventually as we started to grow, expanding the brand. meredith: he's the most inventive person, i'm telling you, since i've met him. it's, like, you name it, he'll be, like, "if only this --" you just need capital.
lemonis: look, there's no question that meredith is her husband's biggest advocate, but she always takes over the conversation and speaks for him as if she doesn't have confidence in what he's about to say. the bigger problem -- he lets her do it. do you listen to her when it comes to business? chris: yeah. meredith: yes, he does. chris: she's really well-read, knowledgeable, and so -- meredith: well, i get frustrated if i knew something to begin with. i'm, like, "unh-unh, i don't -- this is not a good idea to put the money." lemonis: does he listen when you say, "unh-unh, it's not a good idea"? meredith: yeah. how is it gonna monetize? show me the money. lemonis: so you thought all these were good ideas? meredith: some of them -- i mean, i was annoyed that he was having this issue with the buyer, and he kept having to go. lemonis: and did you say to him, "stop"? meredith: no. lemonis: how much money do you think you wasted over the years in ideas and ties and bottle holders and sample bags and space that you didn't necessarily need? how much is the rent? chris: it's $3,500 a month.
lemonis: this is a big space, but right now, it looks like you guys are kind of locking up. chris: if i could keep this going, nothing would make me more happy and passionate and excited to continue the brand, but i've exhausted all of my capital and resources 'cause it's all been personally invested in. lemonis: if this business doesn't make it, what does that mean to him? meredith: it means everything to him. i mean, we started in our garage. it came from the idea of having a baby. it's, like, you birthed this idea at the same time that we had a new experience at becoming parents. and so there was so much meaning behind that, and it's our family. if you look around, these are all our kids. lemonis: these are your kids? meredith: yeah. lemonis: is that you? meredith: that's chris. lemonis: is it? that's you and your kids? meredith: they always wanted to be with him. chris: as a dad not being able to necessarily bring home money for the family, too, i just felt like, i, um... i drove it into the ground, and it didn't -- it's no longer capable of surviving,
and it just made me feel like it was a representation of me. ♪ lemonis: hi, there. akiko: hi. lemonis: i'm marcus. akiko: akiko. lemonis: akiko? that's a cool name. akiko: thank you. lemonis: what do you do here? akiko: operations. lemonis: operations. and do you do the accounting, as well? akiko: just light accounting. chris: i got to the growth of the company because of her help, and she's been basically -- well, you have been. and she's also, like, afforded me to be able to have the travel time that i need to do with meetings and such. lemonis: how long have you worked together? akiko: 13 years. lemonis: 13? you're really helping run the business. akiko: thank you. chris: i know. lemonis: okay, why don't we sit down, go over the financials. ♪ 2015, total sales -- $900,000. 2016 -- $460,000. 2017 -- $431,000. and last year, the company lost $186,000. what do you think the biggest problem is with the business?
so, the total expenses in 2017 are $344,000. your rent is $42,000 a year. $4,000 a year in cellphone. $4,000 a year in landline. $15,000 in marketing or consulting. marketing/pr -- $10,000. product development -- 30 grand. chris: yeah, that was a lot of all that between the designer. lemonis: you mean all the ping pong table stuff? chris: yeah. lemonis: what do you have in debt? what are your payables? chris: um.... this is '17. where did the '18... yeah. that's the balance sheet. meredith: this one, too? lemonis: so, total payables -- $410. so you don't owe anybody any money because you haven't ordered any inventory. chris: right. lemonis: the business is essentially debt-free? chris: yeah. lemonis: right? but it doesn't have any cash. chris: yeah. lemonis: bags did $2 million, and people didn't become less baby-friendly. so, i'm willing to take a shot.
i'm willing to put up $200,000, but i'm gonna want to own 60% of the business. i want to increase the volume, which lowers the price. and then i want to reinvest the difference into improving the quality. i don't like the material on the bags. i think they're cheap. i think the zippers can be improved. i think we should make it so that when my diapers are done and my baby's grown up, i can still use the bag. i have a business here in l.a. that has all of my other products, and i would have you guys sit inside of my infrastructure so there's not, like, separate phone bills, separate web bills. chris: yeah. with the investment, so, how do we -- what are the benchmarks and how are they reached with us? like, obviously, i want to grow the sales as much -- meredith: how's this allocated? chris: 'cause -- lemonis: which question? chris: i know. baby, um, let's ask -- meredith: the allocated? $200,000, you said... lemonis: where it just goes into the business for working capital to invest in inventory... meredith: okay. lemonis: ...and to invest in how that inventory is gonna be marketed and fulfilled.
so i want you to make at a minimum $60,000 a year. a huge increase for you. chris: yeah, yeah. meredith: $60,000 after taxes -- that's not a lot of money, you know, for a family. it sounds like there could be room for negotiating for a higher salary. lemonis: i think the thing for me is, if we weren't doing a deal, what would be happening to the business? chris: it would be -- it would -- i think eventually, it'd close. ♪ lemonis: if your business is in trouble and you need my help, log on to theprofitcasting.com.
then you ain't using enough duct tape. rated pg-13. msounds like there could be room that's not a lot of money. for negotiating for a higher salary. lemonis: i think the thing for me is, if we weren't doing a deal, what would be happening to the business? chris: it would be -- it would -- i think eventually, it'd close. ♪ lemonis: a different way to look at it is, he's gonna make money before i make money. meredith: okay. lemonis: 'cause i make -- i'm gonna get paid nothing. if the business just makes $100,000 a year, how much will i make? meredith: $60,000. lemonis: how much will he make? meredith: $40,000. lemonis: on top of...? meredith: $60,000. lemonis: and how much does that total? meredith: $100,000. lemonis: so he'll make more than i do. meredith: i see. lemonis: and i have all the risk. so, what do you want to do? chris: it's a reset. it's like starting from scratch 'cause everything is there --
meredith: and sometimes, things are required to do that, and if you've created something that generated that much money at one time, guess what. it can do it again. chris: this is the only way that i think this can be done. i agree with you. lemonis: let's go to work. do we have a deal? chris: i would love to. meredith: yay! it's such a pleasure! chris: marcus, thank you so much. wow. thank you. lemonis: slow the ideas down. meredith: okay. lemonis: we have a really beautiful office. sleep tonight. next time, you'll be moved in. we'll just keep the ball moving forward. chris: yes. meredith: that's great. lemonis: okay? you ready to go? meredith: yay! akiko: thank you. lemonis: see you guys soon. meredith: akiko... chris: oh, my god, it's, like -- wait. we need, like, a family hug. [ laughter ] ♪ lemonis: hi, guys. how you doing, brother? chris: good, good. lemonis: everything good? packed up? chris: we're getting there. lemonis: this is move-out day. what i want to do is grab the bags and then let's go over there. chris: okay. perfect. lemonis: today, we're closing diaper dude's office,
and we're moving to my office just a few blocks away. this is it, buddy. chris: i know. lemonis: is this hard for you to leave here? chris: yeah. i mean, this is, like -- this is everything i know, you know? it's really everything that we've done past -- over a decade. [ sighs ] we got to take that sign down. say goodbye to diaper dude. lemonis: ready? chris: yeah. ♪ all right. lemonis: i have a showroom that's located downtown where a number of the small businesses that i'm invested in work out of a shared space. akiko: oh, wow. meredith: this is amazing! lemonis: there's design space. there's creative space. there's web services. there's a number of things there that give all these business the chance to utilize them without having to have them on their own payroll. so, you have some creativity with how much space you need. akiko: okay. lemonis: what's the best part of this space? it's free. chris: it's amazing. unbelievable. meredith: wow.
lemonis: your design table could probably go in the window or over there. chris: cool. great. awesome. lemonis: and you can use the whole space. chris: gotcha. lemonis: but for displaying merchandise, you just have to keep it -- 'cause there's other companies here. chris: hey, just introducing myself. juli: juli. chris: juli, i'm chris. brad: brad. chris: brad? nice to meet you. brad: we do a little bit of everything, but mainly handle all the operations for all the brands that we bring in. chris: right on. awesome. i started -- diaper dude is the name of the company. they're diaper bags designed for dads, messenger-style. juli: cool. brad: i've actually seen your canvas... chris: oh, yeah. brad: ...the full bag at buy buy baby. juli: he's actually a new dad. chris: oh, right on! really? juli: so he's your spokesman right here! [ laughter ] ♪ renae: chris, how are you? chris: hi. renae: renae. nice to meet you. chris: nice to meet you. chris: this is meredith. renae: hi, meredith. lemonis: chris started a company called diaper dudes a long time ago -- 15 years now. chris: 15, yeah. renae: well, we've been around diapers and poop for about 10 years now, so... lemonis: so let's jump in. today, i've brought chris and meredith to camelot kids, a local daycare, to get feedback on their products
from their key customer -- dads. chris: it's actually really exciting to see guys here today. the product was something to help you guys feel comfortable as parents. so, i'd love to show you the first generation. it's a messenger bag. this bag, ultimately, was designed so you can be hands-free when you're out and about with your kid, so you can have easy access. check it out and play with it. so, this is the second generation. this bag's a little bigger, and it actually has more compartments for dad. i'd be curious to know if it looks dated or if it looks like it's not functional... dad #1: i mean, i love the loud camo with, like, the orange, but i think the subtlety is nice. so you're also not screaming, like, "hey, look at me, i'm a dad. look at my giant camo bag." chris: right, right, right, right. meredith: but these are really good sellers, though, right? these particular styles. chris: yes, but maybe it's not big enough. you know, or maybe -- meredith: yeah, maybe it needs to be a little bigger. how many hours are you out with your kid? you know, things like that to think about. what would you put in it? dad #2: so, one other thought is if you have, like, a clear pocket and yourself or your significant other could write out notes of what's needed.
meredith: dry erase is cool, except the only thing about those pens is they smell. they have the chemical. lemonis: well, the pen's not gonna be in the bag. meredith: but, like, they're really particular. like, there were laws that were actually changed many years ago about fabrics. lemonis: while it's nice for meredith to be supportive, i don't want her driving the process. i want chris to feel like he's getting his sea legs back, 'cause ultimately, he's the one that, on a daily basis, has to be there. chris: you guys look like really cool, hip guys, and put some effort into or thought about what you wear, so why not accessorize that thought? dad #3: i could see this being useful for some, like, electronics, like, photography. chris: well, and that's an interesting point -- meredith: so you made the bag work for you, kind of. chris: but this is -- meredith: it's like my travel bags. i stuff things. chris: right, and this is -- meredith: we have some man-- chris: but going back to -- meredith: yeah, i think i've -- actually, i've used ours. chris: wait, it's interesting that you said that because -- okay, this is perfect. this is where, like, we graduate from it just being a diaper bag -- meredith: like, what would you do for, let's say, a messenger bag, to have that feature?
chris: we can -- well, it can be incorporated -- meredith: yeah, i think it's really important, actually. chris: but i-i-i actually wanted to -- to -- i'm sorry. i'm forgetting my point. ♪ the idea was portions of proceeds would support a program that deals with domestic violence. lemonis: did you give a portion away? chris: not yet. lemonis: it feels to me like you took something that's very "right now" and you're exploiting it. chris: well, that was part of the idea, though, that the marketing person said to me, was -- lemonis: to exploit it? chris: right. my family is trapped 240[ gasps ]n the air. mom! do exactly what i say. run! you don't want to do this. hold on, baby. mom! i'm coming for you. not gonna make it in time. daddy. you picked the wrong guy. skyscraper. rated pg-13.
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when you buy a used car you that's why carmax has over. 40,000 cars to choose from nationwide. with prices clearly marked, the same online as they are in the stores. that should give you some car-buying confidence. the type of confidence you need to wear white after labor day. the type of confidence to suddenly switch to an english accent for no reason whatsoever. yep... at carmax, it's all about confidence. nothing but net. nailed it! or should i say, nailed it gov'nor. meredito have that feature? for, let's sachris: we can --ag, well, it can be incorporated -- meredith: 'cause -- yeah, i think it's really important, actually. chris: but i-i-i actually wanted to -- to -- i'm sorry. i'm forgetting my point. ♪ lemonis: watching chris struggle to get a single word in, i'm starting to see a pattern here. this guy's totally lost his voiand his confidence. this is an awkward thing for me to tell you. i love meredith. chris: yeah, yeah. lemonis: but this is about you finding yourself. chris: right. lemonis: 'cause you got in here,
you took control, you were showing it around, and then all of a sudden... chris: right. lemonis: ...your voice went like this, and then you were trying to talk and... chris: right, right. lemonis: i don't know if you felt it. chris: no, i know. i hear you. i get it. dad #4: yesterday, i had the 2-year-old and the 4-year-old, and the 4-year-old had a swim lesson, right? so the bathing suit is dripping wet, so if you have something that's lined... meredith: things get so gross in the bag, so either an attachable -- i'm almost thinking not, but whenever you take it out -- chris: well, let me show -- hold on one sec. will you grab that? meredith: are you listening? chris: i am listening. i hear you. but i just want to actually... meredith: i hear you. okay. chris: ...jump to what you're exp-- expressing. meredith: yes, and...? chris: yes, and -- so, this bag would have the ability to have that feature of, like, a wet/dry pouch. so that would be awesome to write down. meredith: i like that idea of the bottom. could it work for...? chris: so, what i'm saying is that's a great feature that we can turn one of the pockets into the wet/dry pouch. even though it would replace in the main compartment but still keep everything separate and dry. lemonis: thank you so much, everybody. i appreciate it. chris: thank you. this was awesome.
♪ lemonis: so, how'd you think that went? chris: it was really great info. meredith: it was awesome. chris: i mean, there's just so many different needs that we've been missing in the product that we can solve more solutions instead of just being status quo. lemonis: yep. want to make sure that the bags are for more than just diapers. chris: things change, and everybody's needs are not -- my needs are not everybody's needs. lemonis: so, i want to come up with a new name -- rebrand the business. chris: [ chuckles ] wow. preparing myself for that. lemonis: what else did you learn? chris: [ laughs ] meredith: what? what? you're, like, blushing. chris: i think... the journey of this process to discover, um, myself, as a sole person, as an individual experience. lemonis: meredith, do you have any idea what he just said to you? meredith: not quite sure. is this a back-off moment? chris: a back-off -- meredith: that's fine. chris: no, no. yeah, well, i mean, yeah. this is something that i have to do.
meredith: sure. i totally believe in you. i would love for you to do this on your own. lemonis: okay. let's roll. chris: thank you. lemonis: i'll see you. ♪ hey, chris, did you bring some samples? chris: yeah. lemonis: it's been a couple weeks since he got the feedback from the focus group, and i wanted to sit down with chris and see what changes he's made to the functionality of the bags. chris: we added the zipper here, you know, for insulated bottle holder. we added the mesh pouches on the inside of the bag so you can compartmentalize on the interior. lemonis: and where did you get the idea for a lot of these changes? chris: it's me just telling my designers, saying, "i need to make this more contemporary, more hip," 'cause he's really into the outdoor world. and that's a strength, so... lemonis: the designer is? chris: yeah. lemonis: so, chris, here's the problem -- i want you to get back to being the designer of the bag. chris: okay. lemonis: 'cause you proved once to the market that you're a smart enough guy to make a bag that sold tens of thousands of units.
chris: i did a sketch once for my factory, and they laughed at me. that actually wounded my ego. yeah. lemonis: can we talk a little bit? chris: yeah. ♪ lemonis: do you think that's why the business failed -- because you started losing more confidence over time? a vendor would say no, and you would lose confidence. chris: yeah. i was always, i think, a nervous individual as a kid. lemonis: what were you nervous about? chris: messing up, screwing up. lemonis: did that happen as a kid that people were always picking on you? chris: you know, i kind of felt left out, i would say, of a lot of things. lemonis: did you feel bullied? chris: yeah. i've dealt with bullying. i even remember getting into fights with kids because they were just picking on me. and i think that i'm very -- i'm just built more sensitive. lemonis: you have to decide, ultimately, what you want to do. in theory, right now, diaper dude is kind of closed. chris: yeah.
lemonis: and now you have a new place to try to get a fresh start. the ball's in your court. you have all these people around you that want to help. chris: i'm a big believer in the universe brings you opportunities, and the fact that i received this call when i was literally closing down is, i don't think, an accident. i'm excited to, like, take the bull by the horns and move forward. lemonis: let's move forward in a way that makes sense for you, okay? chris: yes, sir. lemonis: okay, buddy, thank you. i'll see you tomorrow. chris: all right. sounds good. [ sighs ] ♪ lemonis: now that we're redesigning the bags and taking it beyond just diaper bags for dads, i want chris to get his mind right about his branding, and so i'm gonna take him outside on the street and get feedback from real people. i don't understand the connection between this and the bags. and so what i want to hear from people is, what do they think of this, how it even ties to the bag.
'cause i don't get it. chris: right. okay. excuse me. do you mind answering a question for me? can you read this and let me know what it means to you? man #1: so, "what's a true dude? he isn't scared to love or cry or even feel." lemonis: what kind of product do you think would be attached to that statement? man #1: man. i could see it connecting to a lot of things. chris: if this were a bag company and this was the mission statement of the bag, does that make it any different for you? woman #1: i guess so. i don't know. i'm not really seeing the connection with a bag. [ laughs ] i don't know. sorry. lemonis: he owns a diaper-bag company. do you see a connection with it? man #2: no. honestly, no. lemonis: okay. thank you so much. lemonis: thank you so much. there's definitely a miss in creating a campaign for a single product. but what i'm still trying to understand is what chris' motivation was and what he was ultimately trying to solve when he hired this marketing agency. why did you create this mantra? chris: because my business was suffering.
it was brought to me from a company with the idea that this is how to rebrand the new voice. lemonis: so this is just a marketing campaign? chris: the idea was portions of proceeds would support a program that deals with domestic violence. lemonis: did you give a portion away? chris: not yet. lemonis: it feels to me like you took something that's very "right now" and you're exploiting it because you think it'll resonate with people to sell more bags. chris: well, that was part of the idea, though, that the marketing person said to me, was -- lemonis: to exploit it? chris: right. lemonis: you marketed it, and you told everybody what a true dude you were, and then you didn't take any of the proceeds and do anything with them. chris: because my business was operating at a negative for too long. lemonis: the way these things work, it's not "i'm gonna give you a percentage of my profits and we didn't make a profit." if you try to take a social issue and you try to sell products under the premise that the social campaign is meant to create awareness or solve a problem, they expect you to do something with those proceeds. chris: yes, of course. lemonis: and you didn't.
chris: that's -- i-i-i-i-i -- ♪ nicolas: the bag doesn't mean anything. chris: well -- nicolas: to me. we have the factories. we can probably get a better price than you can. what is that halo effect? how do you make the business shiny? you with me with that? chris: mm-hmm. yeah. yeah. lemonis: you don't sense that he is. nicolas: no. i don't. i'm lucky to get through a shift without a disaster. heads up! you know what, don't worry about it. my bargain detergent couldn't keep up. it was mostly water. so, i switched to tide pods. they're super concentrated, so i get a better clean. i mean, i give away water for free. i'm not about to pay for it in my detergent. number one trusted. number one awarded. it's got to be tide
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lemonis: if you try and you try to sell products under the premise that the social campaign is meant to create awareness or solve a problem, they expect you to do something with those proceeds. chris: yes, of course. lemonis: and you didn't. chris: not yet. that's -- i-i-i-i-i -- lemonis: when you say that you stand for something and you sell something under a premise that you're "doing good in the world," even if -- chris: you got to follow through it. i agree with you, marcus -- 100%. and that's the last thing i would want us to be. lemonis: but that is what you... chris: did. yes. lemonis: so, why don't we head out? chris: all right. ♪ lemonis: one of the things we're gonna do to improve the quality of the bags is to improve the quality of the fabrics. so chris and i are at mood fabrics, looking at new options. chris: i like the color, but it seems like it attaches -- meredith: it looks like it gets lint. lemonis: oh, that's kind of cool. chris: it's a great fabric. lemonis: there's a lot of exciting things in store for chris. i've gotten him a pitch to meet with the buyers from overton's. it's an outdoor retailer.
and so, what i want him to do is meet with other people to understand how he can modify things with his bag to have it appeal to more people. woman #2: there could be a little bit more organization on the inside, i would say. there's no waist belt, so your shoulders are going to be carrying all of the weight, which is really not what you want. chris: you're talking about going out for, like, a full, like, half day type of hike? lemonis: you mean, like, going to the amusement park with your kid? chris: there you go. lemonis: meanwhile, chris has been working hard sketching out new designs. i like that design idea. chris: i know. it kind of puts into, like, an interesting look. lemonis: elevates it. chris: yeah. hello. lemonis: and i've enlisted my partners at flex to talk to chris about the importance of authenticity when it comes to branding. man #3: above brad's head is the autism watch. chris: oh, wow. man #3: and that puzzle piece represents that community, and they connect with it. i think that story, through video and photo and social media, is probably the most important thing you can do to be authentic. chris: yeah. lemonis: it's been a little while since we had the meeting with the flex guys,
and i've been thinking a lot about chris and his lack of self-confidence and the whole charity aspect. and so i'm working on a couple of ways to connect the two. let me show you an idea, solely based on our conversations. ♪ chris: "no bull." i mean... "put an end to the b.s. let's stop bullying together. take a stand against bullying." it's, like, a no-brainer. "no bull," no-brainer. it's affecting me emotionally just thinking about it. lemonis: it's resonating with you because it means something to you. chris: right. it feels good, and it feels right. lemonis: this is a no b.s. bag. it's awesome. it does everything. chris: "no bull" bag. awesome, man. i got to give you a hug, bro. thank you. i love it. i love it. this is tremendous. ♪ nicolas: how's it going? chris: hey, hey. nicolas: hi. nicolas goureau.
chris: nicolas, chris. nicolas: nice to meet you. lemonis: as you get ready to think about selling this direct-to-consumer and wholesaling the bag, i wanted to give you some opportunity to warm up, go through the process as if this is a chance to sell $1 million worth of bags. chris: gotcha. lemonis: while the final bags are in production, i wanted chris to start working on his sales pitch, so i brought in nicolas goureau, a partner from another business. nicolas was once in a position not that dissimilar to chris'. he was an owner of a struggling company that i ended up investing in. nicolas: nicolas goureau. lemonis: nicolas, nice to meet you. marcus. and today, several years later, he's in charge of product development for aof the outdoor companies that i own. nicolas: all right, what am i looking at? chris: so, this is the ally bag, and the ally bag has over 19 pockets to keep you organized every day. from a wet/dry pouch, a, um... cellphone pouch that is right in the front. you have three pockets that are on the outside. these are padded so that if you're a photographer, you can put lenses inside of them, it'll keep them safe.
if you're a dad, you could put diapers, you could put wipes, you could put a baby bottle in here. nicolas: it's like a utility belt. chris: exactly. it's totally utilitarian. nicolas: i would almost say that the bag doesn't mean anything. chris: well -- nicolas: to me. because we can do this. we have the factories. we can probably get a better price than you can. what is that halo effect? how do you make the business shiny? explain to me the concept again. what does it mean for the business? just... chris: well, okay, you got it. so, my previous business was a diaper-bag business. i started it out of the pure need of having a bag for myself, and it turned into a full-fledged category of diaper bags for dads. and it's continuing the idea that these bags can still live with the concept of having the nonprofit association which is focused on no bully -- no bullying. so no bull bags is the name of the concept of the company. so there's really no b.s. when it comes to these bags. they can do everything that you need to do. i mean, this bag is something that's also stylish and durable. and it's really gonna help you feel -- nicolas: i think we need to come back to the story.
chris: ...emotionally connected. nicolas: come back to the story of the no bullying. i don't -- like, i get it. i get the bag. chris: okay. nicolas: there's no bullying conversation at all here. chris: well, no, the name of the bag itself is supposed to reflect the name of someone that's, like, you know, an ally of someone that's by your side. so the ally is -- nicolas: i know, but -- so, if you're not here and i'm just looking at the picture... chris: right. nicolas: ...this guy looks like he's upset and riding his bike away. lemonis: [ laughs ] chris: but are you saying that the design of the bag with the imagery -- nicolas: i don't want to talk about design, price, bag. it's this movement that you're talking about. because if you're leading with the design of the bag, the price of the bag, and then this is secondary, then it's -- i can smell the bull-[bleep] in it. chris: right. nicolas: i smell that. you're just, like, using charity to create something here. you with me with that? chris: mm-hmm. yeah. yeah. lemonis: you don't sense that he is. nicolas: no. i don't. lemonis: coming up... oh, look at your tagging. chris: i know, right? meredith: i think you should change it.
nicolathe price of the bag, and then thisgn ois secondary, then it's -- i can smell the bull-[bleep] in it. chris: right. nicolas: i smell that. you're just, like, using charity to create something here. you with me with that? chris: mm-hmm. yeah. yeah. lemonis: you don't sense that he is. nicolas: no. i don't. needs to be the other way around.
lemonis: chris is totally tripped up. looks like a deer in the headlights. and what he needs to do is take this feedback and rather than getting beaten down by it, learn from it and implement it for his next pitch. the bag has to be great, but you got to hook him on why. chris: these bags could have the nonprofit association focused on "no bully." so no bull bags is the name of the concept. the tags are awesome. it's a symbol for being able to put an end to a bully. nicolas: i think the concept is great. you need to scream this from the mountaintop. make me feel it. lemonis: you're getting much closer. chris: [ laughs ] okay. lemonis: no, i'm serious. i can say that from my heart. like, i'm very proud of the progress we've made. and you know me. i've told you what i'm not. chris: yeah, yeah, yeah. lemonis: okay. but what i think has to happen in the next presentation, you need to be thinking more about the idea behind it and more about what it means to you and less specifically about the bag when you open your presentation. chris: okay. lemonis: at some point, you're gonna get into the bag. we'll go back to work. nicolas: okay.
chris: no, but i appreciate... nicolas: thank you very much. lemonis: don't be discouraged. chris: no, no. are you kidding me? i'm not. i'm not. i get it. i hear what you're saying. lemonis: a lot of progress. i'm very happy. chris: i appreciate it. ♪ ♪ lemonis: welcome to minnesota. chris: yeah. [ laughs ] hi! lemonis: how are you, buddy? chris: great. how are you? lemonis: today is the day for chris to meet with the buyers at overton's. overton's is an outdoor retailer, but with all the changes he made to the bag, it should appeal to everybody, and it should work just as well here as it works at buy buy baby. chris: that one, we can put right over there. lemonis: overton's may be part of my portfolio, but, as always, the buyers make the final decision. and if he wants to win them over, he'd better tell his story clearly and with confidence. this is a new bag. chris: yes, it's the same version, but we did a different flap on the front so that we can give another option of a look instead of faux leather all the way.
so we did a half faux leather to make it a little more maybe casual. lemonis: okay. chris: so, let me... meredith: what happened to the -- oh, this image. this is what we need. lemonis: oh, look at your tagging. chris: i know, right? it's designed to sort of lead it light that. lemonis: great. meredith: mm... i think this yellow stands out much more. the bull, i think, is a big draw to the eye. lemonis: however chris wants to do it. chris: hey, mer. mer. meredith: i'm telling you. chris: no, stop. ♪ meredith: this one - oh, see, it's -- again. this what we want to be seen on it. chris: this is the way it was designed -- to be like this. meredith: i think you should change it. i think it's stronger, even if it doesn't look perfect right now. ♪ lemonis: for exclusives, extras, and business advice, visit theprofit.cnbc.com.
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chris: this is the way it was designed -- to be like this. meredith: i think you should change it. i think it's stronger, even if it doesn't look perfect right now. ♪ chris: you know what? i got this, and it's good, and you can trust me. meredith: all right. chris: hi. nicolas: how are you? chris: great to see you again, nick. meredith: hi. how are you? nicolas: nice to meet you. chris: thank you so much for having me here. i'm pleased to present to you a new brand that i hold close to my heart -- no bull bags.
and no bull bags was conceived with the intention of putting an end to bullying. as a dad of three, you know, i've witnessed bullying in numerous places -- when i'm dropping my kids off at school or at a playground. i've been a victim of it myself growing up. but that's where no bull bags comes in. we're aligning ourselves with nonprofits that are doing work for anti-bullying campaigns. so the idea is 5% of proceeds from sales of these bags would go to support those programs that they have -- buyer #1: as long as you can clearly articulate the message so that consumers can understand it without you standing there selling it. how do you tell that story? chris: that is gonna be the story told through the hang tag and the story of how we are giving back in the back with, you know, portion of proceeds supporting anti-bullying organization. buyer #1: great. lemonis: tens of thousands of these bags, over the last 10 years, have been sold specifically for dads who carry their kids. you carry your grandkids. you carried your kids. buyer #1: but it's also a narrow niche.
lemonis: narrow niche. chris: well, and also the interesting thing, if i may just step in one quick moment? lemonis: take over, please. chris: okay. because while it was filling a niche, it was also becoming a symbol of fatherhood because the role of dad was changing dramatically. so a lot of people related to the fact that this was an item that they had an emotional attachment to. lemonis: i am really pleased with how confident chris is in his presentation. he's not letting anybody stand in his way -- including me. chris: so, i know these bags can sell, 'cause i did it for 16 years, but now coming up with a new concept with the giving-back portion and the anti-bullying. i need your help to be able to expand this. lemonis: and so, what's the ask? chris: the ask is, we would love your business, and let's stop bullying together. nicolas: we can sell a $99 bag. we do it all day long. chris: okay, great. great. nicolas: but do we buy into the concept? buyer #1: everybody has either experience bullying, witnessed bullying, or have somebody in their family who has, so there's going to be automatic empathy. nicolas: every customer will be into it. you have our support. 1,000%.
chris: are you serious? nicolas: yeah. buyer #2: i see a whole shop concept coming to life in front of the store. i would like to see it expand much more beyond just the bag concept into far more product. chris: i love it. buyer #1: thanks. chris: thank you, guys. buyer #2: thank you. nicolas: thank you very much. chris: thank you guys so much. nicolas: look forward to working with you. chris: same here. wow. lemonis: i think you did an amazing job. chris: this journey has been so eye-opening -- personal and professionally. i do have a voice that means something, and i don't need to second-guess myself. and failure, sometimes, is the only way to grow and learn. lemonis: i'm very proud of you. congrats. chris: thank you so much. meredith: thank you so much. lemonis: let's get you packed up. when i first came to diaper dudes, the business was essentially closed. he had lost confidence in himself, he was creating products that made no sense, and he had no idea where he was going. for me, it was very simple -- i had to, unfortunately, tear chris down
and build him back piece by piece by showing him that he had to do the work. he had to believe in what he was doing. he created a movement, he created a product, but, more importantly, he got his confidence back. ♪ tonight on the deed: two young developers with big ambitions. andre: we're gonna build a billion dollar company. [laughs] and even bigger debt. andre: we owe to the bank two and a half million. sidney: two and a half million. their latest flip is turning into a money pit. sidney: right here is termites. you got it in your floors, you got it in your walls. you got it all over the place. and squeezing their bottom line. andre: any given time, we're gonna be twenty grand in the hole. if i can't get them to change their ways... sidney: you're getting all upset. andre: i'm fine. i can live with it. just hear me out. they're headed for disaster. sidney: you've taken in a lot of debt. any little slipup will literally crush you. nicole: we didn't know what we were getting ourselves into.