"The price is too high" Shark Tank's Kevin O'Leary rejects SoapSox

When Ray Phillips and Alvin Uy stepped into the Shark Tank seeking $260,000 for 10% of their company SoapSox, they had high hopes.

Their unique stuffed animal washcloths, featuring built-in soap pockets and antibacterial features, were already creating a buzz, getting them $300,000 in sales over six months and a promising Nordstrom partnership.

But Shark Tank's "Mr. Wonderful" Kevin O'Leary had other thoughts about their $2.6 million valuation. O'Leary declared on Season 6, episode 3 of ABC's hit show, where entrepreneurs pitch their business ideas to a panel of successful investors:

"Guys, the price is too high. I can't even see this ever long term more than $12.99 ever. It should be $9.99, and you're not worth 2.6 million. I'm out,"

The moment marked the beginning of a dramatic pitch that would end with an unexpected twist.

What happened during SoapSox’s Shark Tank pitch?

Phillips's inspiration came from a touching source - his work at a children's treatment facility. When one young resident refused baths because his stuffed animal would get wet, Phillips saw an opportunity. His solution? Modifying a stuffed animal to include soap storage, creating the first SoapSox prototype.

After two years of development and a successful Kickstarter campaign that raised $51,930, SoapSox was ready for the market. Their numbers were impressive - each unit cost $3.66 to manufacture and retailed at $19.95, providing healthy margins.

While O'Leary's exit set a challenging tone, the pitch on Shark Tank took several dramatic turns. Daymond John stepped forward with an offer of $260,000 for 33% equity, highlighting his retail expertise and distribution connections. The founders countered with $350,000 for 15%.

Then came the surprise - Lori Greiner and Robert Herjavec joined forces to offer a complete buyout of $1 million. The room crackled with tension as Phillips and Uy faced a crucial decision: take Daymond's partnership, accept the buyout, or maintain their independence.

In a move that stunned the Sharks of Shark Tank, Phillips and Uy chose door number three. They declined both offers - Daymond's partnership and the million-dollar buyout. Their reasoning? They weren't ready to give up control of their company, even for a seven-figure payday.

SoapSox’s post-Shark Tank journey

Sometimes rejection is just the beginning. By 2016, SoapSox had secured a game-changing licensing agreement with Disney Baby, allowing them to create washable characters from beloved Disney properties. A partnership with Paw Patrol followed, expanding their character lineup even further.

The company's growth continued steadily. They won the JPMA Innovation Award in Las Vegas, earning recognition from the juvenile products industry. Additionally, their manufacturing processes evolved, enhancing cost efficiency while maintaining high-quality standards.

By 2024, SoapSox had proven O'Leary's pricing concerns wrong. The company established a presence in over 400 specialty stores and hospital gift shops across the United States. Their strategic partnerships and targeted distribution approach paid off - annual revenue reached an impressive $8 million.

Sometimes the best bargains are the ones you don't make, as the SoapSox tale demonstrates. Although O'Leary's price worries made sense in the Shark Tank, Phillips and Uy's conviction in the worth of their product and their outlook for the business's future turned out to be much more valuable than a Shark's investment.

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Shark Tank Season 16 episodes air on ABC every Friday.

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