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tv   The Profit  CNBC  February 2, 2016 11:00pm-12:01am EST

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a candlemaker tries to tcrack a crowded market" with bold designs. sam: this pre-drip candle is what started it all. lemonis: but instead of breaking out, they're on the verge of melting down. sam: we haven't made a profit yet. lemonis: how have you made a living for the past -- sam: ha! lemonis: their strategy is failing. mark: if we don't come up with like, the story, we don't get these design elements. anthony: i don't think anybody gives a [bleep] lemonis: their resources are dwindling. how much cash do you have in the bank right now? mark: like $600. lemonis: $600. and the pressure is taking a toll. sam: 16 grand in credit cards, which i didn't even know about. lemonis: if these owners can't learn to trust my process... sam: when he hears what he doesn't want to hear, he closes off. it's gonna make me cry. lemonis: ...their business will burn out. my name is marcus lemonis,
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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... let's go to work. "the profit." ♪ five years ago, entrepreneur mark biren started wick[ed], a candlemaking company out of burbank, california. along with his wife sam, mark has been able to get his candles into well-known retailers such as urban outfitters and l.a. celebrity hot-spot kitson. mark: this one is definitely paid. sam: how do we know it's paid? -mark: call them. -sam: okay. lemonis: but despite its initial success, wick[ed] has experienced a slump in sales and is struggling to keep its doors open. mark: doesn't look like urban's going to
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be reordering our pre-dripped this season. [ sam groans ] lemonis: the candlemaking industry is very competitive, and i'd never given it serious thought until i saw mark's artwork. his knack for design is exactly what a brand needs to stand out on a shelf. with my help, i'm confident he and sam can get back on track and eventually take these candles nationwide. ♪ i'm trying to find wick[ed]'s manufacturing facility. i see some trash and some empty boxes. i expected some sort of manufacturing setup. i can't find it. i finally find their warehouse because i see this very small sign. it's literally like a 10-foot by 10-foot box. how do you fulfill urban outfitters and all these other retailers out of this place? -sam: which one is in here? -lemonis: hello? -sam: hi! -mark: hey. lemonis: how are you? i'm marcus. you're mark? okay. mark: nice to meet you. yeah, i'm mark. -lemonis: how are you? -sam: sam. nice to meet you. lemonis: hey, sam. nice to meet you.
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-mark: yeah. -lemonis: so this is your place. -sam: your other home. -mark: my other home. -lemonis: is this it? -sam: this is it. mark: yeah. why, it's not big enough? -lemonis: no. -mark: too small for you? lemonis: it's plenty big. -is it "wick[ed]" or "wicked"? -sam: "wicked." mark: "wicked." yeah, we play on the word "wick," and that's why the "ed" is its own, like, design element. sam: he designed that. lemonis: and who owns the company? -sam: both of us. -mark: we both do. -sam: uh-huh. -mark: 50/50, yeah. lemonis: what's the product that started it all? sam: this puppy right here -- the pre-drip candle was specifically created for our wedding day. no venue would allow a drip candle, obviously. we scoured the market, and there weren't any pre-dripped candles that looked like a drip candle. mark: it still burns like a standard pillar, so you get the aesthetic of a drip candle without the mess. sam: so mark, who's artistic and crafty, said "why don't we make them ourselves?" lemonis: so is this kind of like a halloween candle? mark: you'll have, like, the younger people kind of -- it could be a little goth and romantic. and then sometimes you'll have, like, the older crowd -- -sam: who see a shabby-chic. -mark: yeah. lemonis: it's very niche-y, though. sam: but i see that as a good thing because it really branded us. people -- oh, pre-dripped. mark: there's no one on the market that has anything like that. sam: and that was a collection that we built a relationship with urban outfitters,
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and they keep asking us, "do you have anything new?" and we haven't had an order from them in a while. mark: yeah, no, now it's been a while. sam: this is the negative space collection, and we wanted it to represent the psyche of tortured artists. lemonis: so, like, what is this one? -mark: oscar wilde. -sam: that is oscar wilde. he loved music. lemonis: so is every candle that you've developed -from some crazy experience? -sam: of course. 100%. -mark: some kind of experience. -sam: yeah. mark: we want everything to have a story. lemonis: i mean, the packaging's nice. -sam: thank you. -mark: thank you. lemonis: it's interesting-looking. lemonis: who does the artwork on them? sam: mark. lemonis: i think the artwork is unbelievable. -mark: thank you. -sam: he's so talented. lemonis: candles are all about the packaging. -mark: yeah. -lemonis: what does this cost? mark: wholesale is $20. lemonis: and so it retails for $40. mark: yeah. lemonis: i usually like to invest in products that have mass appeal, and this particular product doesn't really hit that mark. it's got kind of a gothic, tortured artist feel to it, and it's also missing the price point. it really should be under $30. now, mark's a good artist, but this product looks like he's designing it only for his own taste. what kind of revenue do you do? how much do you make?
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sam: we haven't made a profit yet. lemonis: the company doesn't make any money? -mark: yeah, we -- -sam: no. lemonis: how have you made a living for the past -- sam: ha! mark: well, yeah, so -- lemonis: have you made a living? mark: no, i've spent more of my savings. lemonis: but how do you guys pay your bills? sam: i -- i do tv hosting. lemonis: do you make a lot of money doing that? -sam: no, i don't. -mark: you would think. lemonis: you want to find people that you can work with that you know are gonna put in all of the effort and all of the time and they're committed to their business. and the one thing i can say about mark and sam is that they are committed to their company. you know what i'm gonna do? i'm gonna go hang out with some of the employees. so i'll catch up with you guys in a little bit, okay? -mark: all right, cool. -sam: thank you. lemonis: hi, guys. -amanda: hi! -matthew: hey, how's it going? -lemonis: i'm marcus. -amanda: amanda. -nice to meet you. -lemonis: amanda, how are you? -matthew: i'm matthew. pleasure. -lemonis: matthew, how are you? matthew: i'm doing really well, how are you? lemonis: so, do you guys work here full-time? amanda: not full time. i mean, i've been friends with them since before this company started, and i've kind of helped whenever they needed me -throughout the years. -lemonis: wow. matthew: i've married into friendship, so... which means that i get an opportunity to help them out.
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lemonis: and so show me what you guys do when you come. amanda: these are open, so you push them down, you take out the silica, we put them in, then we put a love note in each one of these. lemonis: what's the love note? it's a little -- -amanda: it's -- -lemonis: it's a little much. i mean, read it just like it says. matthew: "my dearest love, your darkest secret can be someone else's desired wish." lemonis: hey, thanks, bro. you gave me a candle -for my birthday. -amanda: yeah. lemonis: hopefully you don't give this candle to your boss. -amanda: kid, or boss, yeah. -lemonis: all kidding aside... -amanda: yeah. lemonis: is nice to have that in there, but it narrows the audience of who you can give it to. amanda: i can definitely see where you're coming from. lemonis: how many can you crank out in a day? amanda: um, that's a hard number. i think it could be done better if we had a more organized process going on. mark's very particular about the way he likes things. lemonis: does he not always do things the right way? amanda: no, mark always does things the right way. he just doesn't trust other people sometimes -to do it the right way. -lemonis: interesting. the fact that there's no process in place and that mark doesn't really let anybody do anything
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is not a good first sign for a business that's been around for five years. i'm kind of wondering why he isn't outsourcing this part of the process. if this business is going to grow, he's got to acknowledge what he's not good at. he should be focusing on design and creativity and selling. do you do any wax here? mark: you want me to fill one of these for you? lemonis: yeah, i want to see what it looks like. -sam: all right, let's do it. -mark: all right. lemonis: okay, so you start with the glass? mark: i put the glass -- lemonis: you glue this thing in? mark: glue that in. lemonis: then you pull the wax off of there. mark: filling my wax. lemonis: is that hot wax? -sam: yeah. -mark: yeah. all right, so now you need a 475. lemonis: how do you know the proportionates? mark: well, i do about 13% of the wax. that's how much fragrance is in there. lemonis: why did you choose that? mark: that's kind of standard with our fragrance, -so when i get -- -lemonis: but why? mark: 'cause that's a high fragrance for -- lemonis: didn't smell a lot to me. mark: 13% is high. lemonis: but i don't smell that much in here, either. -mark: no way. -lemonis: no way.
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mark: yeah, right. i can smell it. too fragrant is sometimes too much. lemonis: have you ever focus grouped that? mark: no. lemonis: have you ever tested it with your team? -mark: no, not at all. -lemonis: sam, what would happen if you made them slightly more fragrant? sam: i would love if they were more fragrant. i mean, we've had this conversation, mark and i, many times. lemonis: so she wants it more fragrant, and i'd like it more fragrant. you want it more fragrant, too? amanda: i think you buy a scented candle -for the scent, you know? -lemonis: so that you smell it. amanda: otherwise, you'd buy a scentless candle for the look. lemonis: i was just honestly giving him feedback like a customer. i'm smelling the candle. it doesn't smell that strong. can you make it stronger? "no." okay. there's a lot of candle companies out there. why don't you just go back to being a great graphic artist? mark: [ sighs ] lemonis: what's at stake for you? mark: making my parents proud. i want them to know that i created something. my dad's an electrician. he doesn't have, like, a lot of money, but no one would give us a loan and he gave us $20,000, and -- sam: i know.
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mark: i never thought -- sam: it was really hard for him to accept -- for both of us. mark: i don't want to take any of that. [ sighs ] lemonis: how much money do you have invested in this business? sam: the first year, around 30 grand. meanwhile, unbeknownst to me, mark was charging things on his personal credit card. i don't like that at all, but mark likes to just do it. lemonis: why are you charging it on your credit card and not telling her? mark: 'cause we don't always have it in the account, and she's already done so much -- lemonis: but why aren't you at least telling her? mark: it's just another thing on her plate. so i'm like, i could do it on my own. sam: it's hard, marcus. lemonis: how much do you have on the credit card, really? mark: probably maxed out on one that's 10 grand -and i probably have another -- -sam: wait, personally? mark: like 6 grand on the other one. like, $16,000 altogether. sam: how are we supposed to build a life for ourselves if we're in debt? mark: i-i keep thinking -- [ sam crying ]
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that's why i don't like letting it out 'cause i know, like, it'll hurt her. sam: it hurts me more when it's this. like, if we have a baby, like, what am i supposed to do for three months? i have no, like, employee pay, no union, like, nothing. mark: i know. sam: so there's no like, nest egg there, and that's not good. we can't build credit. like, it's not good. how are we supposed to get a house? like, how are we supposed to do those things if you're 16 grand in credit cards, which i didn't even know about? this is it. like, this is it. mark: you all right? give me a hug. we'll be good. i'm telling you. don't worry. lemonis: the fact that he is doing what it takes to keep his business open is admirable, but the fact that he's doing it the way he's doing it is questionable. he doesn't seem like a guy that wants to take direction,
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and when your wife is the only one earning the money and she's the one funding all these things, you need to be honest with her about how your family money's being spent. financials. do you have any financials we can sit down and talk about? -mark: yeah. -sam: yes. -lemonis: okay. i'll meet you in there and we'll sit down and go over them. sam: okay. lemonis: okay, here we go. 2013 -- $139,000 of revenue and $4,000 loss. that's a pretty good job. really good job. most companies lose a lot of money in the first couple years. 2014 -- you dropped pretty significantly, almost 40%. $93,000. $20,000 loss, right? -sam: mm-hmm. -mark: yeah. lemonis: this is the debt page. sam: this is the uncomfortable part. lemonis: california franchise tax -- $900. credit card, wells fargo -- $8,600. -sam: mm-hmm. -lemonis: okay. plus another $16,000 in credit cards. mark: me, personally? yeah, but that's not part of the business. that's just me personally. i would never put that on to the business.
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lemonis: i'm not asking you to. i appreciate that. that's a super-admirable thing, 'cause most people would get cute. -i appreciate you -- -mark: how? -lemonis: well, they would -- -sam: take advantage of him. lemonis: they would take advantage of that situation, and i appreciate you doing that. it says a lot about you. okay. then it says "eddie biren". -sam: that's his dad. -mark: that's my dad. lemonis: and you owe him $20,000. mark: yeah. lemonis: so the total debt on the surface is $29,500. how much cash do you have in the bank right now? in the business? -mark: like, $600. -sam: well, we pay -- -lemonis: $600? -mark: yeah. lemonis: so, guys, the way i should really think about this company is it's kind of a start-up. -right? -mark: not really. -lemonis: no? -sam: i don't think it is. mark: no. it's definitely not a start-up. sam: people know our name. we've been people magazine. we've been branded. we're definitely a branded candle. mark: we get these huge accounts. it's just -- sam: it's just we got to work on the process. it's not. lemonis: come on, guys. the business has no working capital. it has around $30,000 worth of debt and no cash in the bank. it is a start-up.
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what happened that causes you not to trust people? mark: i can't answer that. i cannot -- lemonis: then you can walk away. but, mark, for me to move forward with you, i need to understand it. mark: i don't know. try phillips' fiber good gummies plus energy support. it's a new fiber supplement that helps support regularity and includes b vitamins to help convert food to energy. mmmmm, these are good! nice work, phillips!
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legalzoom. legal help is here. [so i use quickbooks and run mye entire business from the cloud. i keep an eye on sales and expenses from anywhere. even down here in the dark i can still see we're having a great month. and celebrate accordingly. i run on quickbooks.that's how i own it. dad, yoh no, i'll take you up to me off rthe front of the school. that's where your friends are. seriously, it's, it's really fine. you don't want to be seen with your dad? no, it' this about a boy? dad! stop, please. oh, there's tracy. what! [ horn honking ] [ tires screech ] bye dad! it brakes when you don't. forward collision warning and autonomous emergency braking. available on the newly redesigned passat. from volkswagen.
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am: no. -mark: it's definitely not a start-up. -sam: people know our name. -lemonis: come on, guys. the business has no working capital.
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it has around $30,000 worth of debt and no cash in the bank. it is a start-up. -i'm not trying to offend you guys. -sam: no, yeah. lemonis: and i do see a lot of potential here. so the candle business is sort of a gift/home market. you really can attack both sides. and so i'm kind of excited about it. -mark: sweet. -sam: that's awesome. mark: we're excited that you're excited. -sam: that's awesome. -lemonis: right. so i want to make an offer. [ mark sighs ] -you all right? -mark: yes. -sam: you need to hold my hand? -mark: they're like clammy. you might not want to hold my hand. sam: oh, they are clammy. they're very clammy. lemonis: so i'd like to offer $200,000 for a third of the business so the three of us can be equal. mark: wow. lemonis: the $200,000 is gonna go towards putting inventory on the shelves, coming up with new designs and ideas, coming up with new packaging, and we're gonna pay your dad back. mark: yes. i like it. sam: i like it. i do.
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that feels right, and it feels fair. lemonis: remember, i'm 100% in charge. sam: [ sighs ] lemonis: normally, i wouldn't offer this much for a start-up business that's this small, but in this case, i feel like it has a ton of potential and a ton of needs. i've also elected to take less equity in this particular business than i normally would, and the reason for that is most start-ups can't afford to pay big salaries or big bonuses, and so the way that sam and mark are gonna make their ultimate pay day is that they're gonna have a nice equity offering. sam: thank you so much, marcus. i'm so happy. can we hug? mark: you sure your name's not like clark kent or something? sam: [ laughs ] oh, my gosh. lemonis: this business can be solved with three simple steps -- streamline the design process so that we're appealing to the mass market, find a manufacturing partner so that we can take the burden off of mark and he can focus on what he's good at, and then find a distributor or a rep that can get these candles into the marketplace. sam, going forward, i'd like you to take over the scent process.
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sam: can't wait. i love that. lemonis: so do we have a deal? -sam: yes. -mark: yeah. -sam: yay! yay! -mark: thank you so much. -sam: thank you, marcus. -mark: all right. -sam: can we have a group hug? -lemonis: yes. -sam: yes! yay! -mark: aww. -lemonis: i'm excited. -mark: all right. sam: yay! ♪ -sam: hi. -mark: hey. lemonis: hey, how are you? i'm marcus. anthony: hi. hi, marcus. mark: this is his store. lemonis: this is one kick-ass candle store. -sam: yeah. -anthony: thank you. lemonis: candle delirium is a 10,000-square-foot candle store. it could be the biggest candle store in america. the owner happens to be friends with mark and sam, and so why not go to the person or persons that are telling you what does the consumer really base their candle purchase decision on? lemonis: how many different candle companies do you rep here? -anthony: close to 40. -lemonis: 40. -anthony: yeah. -lemonis: wow. anthony: 35 to 40, depending on the time of the year. lemonis: what's the number-one seller? anthony: voluspa's the number-one line. she's been around forever. -mark: those are like, $27. -anthony: this is $27. mark: see, that's the goal right there. anthony: this is 100 hours
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in this big, thick glass in this beautiful box. that's why this is number one. lemonis: and so you carry their stuff, too? -anthony: i do. -lemonis: where is their stuff? how many do you sell of these a year? a couple thousand? anthony: yeah, maybe close to 2,000. lemonis: and how many voluspa do you sell a year? anthony: oh, those are in the tens of thousands, but they're a brand name. lemonis: and so that's really more mainstream. anthony: yeah. i said that from day one. it's niche-y. i mean, these are really interesting-looking. there's nothing like it. it's got a very specific clientele. like, their other line is very -- it's too sophisticated for most people. -lemonis: show me that. -sam: ah. anthony: yeah, it's esoteric, and people are not that interested, i don't think -- -mark: in the stories? -anthony: in the stories, yeah. anthony: i told him that before, but -- but -- lemonis: is that true? he told you that? mark: i don't know if it was in those exact words, but... anthony: the work that went into it is really incredible, but i don't think anybody gives a [bleep] in the end, they're like, "does it smell good? i like it. it looks nice. how much is it? i'm out." mark: but if we don't come up with like, the story, we don't get these design elements -that we could pull from. -sam: true.
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lemonis: but he's -- he's telling you something. anthony: look at voluspa. the intricacies of that design, and she obviously had inspiration, but she doesn't tell anybody. mark: but we still like coming up with the stories. that's our inspiration. that's how we move forward with our design ways. so, yes, we will still do that. lemonis: the guy that owns one of the largest candle stores in america, who happens to be his friend, is telling him no one cares about the story, and mark continues to argue with him. i'm thinking to myself, buy a vowel, get a clue, open your ears, and listen to what this guy's telling you. -mark. -sam: mm-hmm. lemonis: when people are giving feedback, he hears, but he's not listening. sam: when he hears what he doesn't want to hear, he internalizes it and he closes off. -lemonis: okay. -sam: he is broken. -lemonis: he is? -sam: yes. it's gonna make me cry. [ sighs ] -mark: what are you thinking? -lemonis: it's very busy. mark: yeah, but that's what differentiates us and it's also at an angle right now.
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lemonis: you just asked me. i'm telling you. it's busy. e*trade is all about seizing opportunity. so i'm going to take this opportunity to go off script. so if i wanna go to jersey and check out shotsy tuccerelli's portfolio, what's it to you? or i'm a scottish mason whose assets are made of stone like me heart. papa! you're no son of mine! or perhaps it's time to seize the day. don't just see opportunity,
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ask your doctor about cialis and a $200 savings card stop taking cialis and get medical help right away. -lemonis: mark. -sam: mm-hmm. lemonis: he hears, but he's not listening. -sam: he is broken. -lemonis: he is? sam: yes. it's gonna make me cry. [ sighs ] lemonis: why is he broken? sam: i think he's just been working so hard on all these different collections. it's his life. it's his legacy. and he just wanted them to soar. and now he has to start over. there's gonna be a process where you have to pick yourself up and keep moving. lemonis: okay. so we have to work on that together. sam: yeah, we do. yeah. lemonis: mark has trouble processing feedback, but that's gonna be a big problem. when a business starts out, if it has a good idea, it doesn't mean that it's gonna be a good idea tomorrow. the importance of feedback is learning how to evolve as a company. for mark, it's about growing and evolving as a businessperson, especially knowing how to pick yourself up when you get shot down. so, here's what i want to see you from you.
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i want to see a new collection, a new brand that you just focus on price, fragrance, packaging. -mark: and packaging. -lemonis: okay? and you give me a retail price between $27 and $28, like voluspa, and you have to be able to have margins in excess of 50%. you don't have to have the final product. you could just do storyboards. okay? what i'm hoping that mark learns in this process is if he can follow direction, we're gonna have wild success. but if he continues to rebel and argue and fight all along the way, we're gonna end up with no deal. -mark: can't wait. -sam: mm-hmm. -lemonis: all right? -sam: yeah. -mark: it's easy. -lemonis: okay. -thank you so much. -anthony: yes, sir. lemonis: we're gonna be back. ♪ you know my people process product theory. -sam: yeah. -lemonis: i feel like i can check the box on the people side. i feel like your process is as janky as it gets. sam: we agree.
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lemonis: i'm taking mark and sam to modern candle because mark can't continue to be a one-man band. we have to find a manufacturing partner that can allow us to do real volume and make money. mark: one thing is, i have a little issue with this place right now. they've done work for me in the past, and they kind of messed up on some orders of mine. it didn't look like the blend -- like, something was wrong with it. -it just didn't kind of go well. -lemonis: yeah. there's gonna be times in business where you're gonna have relationships with vendors -that aren't gonna be perfect. -mark: yeah. lemonis: and how you deal with that is a big deal. and so maybe we go in with an open mind. -sam: okay. -mark: all right. lemonis: and we don't maybe, like, lead with -- -mark: yeah. -sam: open heart, open mind. -okay, mark? -mark: all right. ♪ lemonis: modern candle is one of the largest candle manufacturers in the united states. they can do everything from source your glass to print your boxes. they are a one-stop shop for any candle company, and they serve some of the largest brands
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in the marketplace. -sam: hi. -lemonis: how are you, sir? -lemonis: i'm marcus. -armik: armik. -lemonis: nice to meet you. -armik: nice to meet you, too. -mark: we've met before. -armik: oh, yeah. mark: yeah, he used to pour candles for me. armik: mm-hmm. mark: but, uh, there were some issues. lemonis: what is mark doing? i just told him two minutes ago not to lead with the disagreement that they had. you know what i think the problem is? he doesn't want to give up control of making candles. he wants to continue to be a one-man band and keep this business in his garage. mark: instead of you doing the two blends -- it was a blend, remember? it was like a 75-25. there was a pom and a soy. you only filled it with the pom. you didn't blend it. armik: this is not the way which we agreed. based on our papers, we did right. and i had asked him, if you want, you know, just send it back. send it back. we are gonna correct it. mark: okay, see, i didn't want to get into it. lemonis: stop for a second. question i have for you is can you accept that there was a difference of opinion? mark: yes. i'd love to move forward. lemonis: but are you gonna move forward with a chip on your shoulder? mark: no. everyone makes mistakes. -i get that. -sam: best foot forward. mark: i'm fine. it'll work. lemonis: are you gonna let it go, though? mark: yes, i could let it go.
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lemonis: 'cause seriously, it's a big deal for me. mark: i can totally let it go. lemonis: and so we're gonna resolve it and we're gonna move on and try to do business. sam: that's exciting. wow. lemonis: all right, let's keep going. let's see something cool. -come on. -sam: unbelievable. lemonis: i have to be honest with you. -mark: yeah. -lemonis: i'm just gonna give -you my honest opinion, okay? -mark: please. lemonis: you get a little defensive. mark: yes. lemonis: are you gonna move forward with a chip on your shoulder, as opposed to looking -- mark: no, no, i want it to work out. just certain things i have questions on, but i still want a win-win for both of us. -lemonis: i get the questions. -mark: yeah. lemonis: just chill out, okay? just chill out. sam: this is huge. mark: there's so many candles. lemonis: how many candles can you make in a day? arvin: we probably do 6,000. lemonis: and how many can you make in a day? mark: 400. that's just me only doing that -- lemonis: that's with you not opening the mail. -sam: yes. -mark: yeah, yeah. lemonis: that's with you not paying the bills -and not designing. -sam: right. -lemonis: and not selling. -mark: oh, yeah. -lemonis: this is awesome. -sam: this is so cool. lemonis: so, what do you pay for this box printage?
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mark: 42 cents. lemonis: what do you think you can get this for? arvin: probably 35 cents. what's your fragrance cost? mark: $26 per pound. arvin: i can probably get that in the $15 dollar range. lemonis: see the value of relationships? -sam: yeah. -mark: yeah. lemonis: if modern candles does 6,000 candles a day, we know they're buying a lot of glass, a lot of fragrance, and a lot of paper, and i want to leverage their volume to lower our costs so we have a lower retail price. this is a no-brainer. okay, so, we would like to move forward with you. obviously we want the pricing to be right. -arvin: right. -lemonis: what i can tell you guys is we're going places. we're going to get a lot bigger. -mark: i can't wait. -sam: i'm so excited. -lemonis: okay. -sam: thank you, guys. -lemonis: thank you very much. -arvin: i appreciate it. lemonis: really a pleasure to meet you. -sam: thank you so much. -arvin: pleasure meeting you. sam: thank you. lemonis: it's been a couple of weeks since i tasked mark and sam with coming up with a new collection, and i'm excited to see what they've done. i just hope they took my advice to heart and created something with mass appeal.
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so, let me see the new stuff. mark: all right. cheers. lemonis: 'cause this is what i'm most excited about. sam: my anxiety's through the roof. mark: so, wait, before -- you want to hear the story? lemonis: no, i don't care about the story. sam: there is no story. [ laughs ] mark: there's no story to this. don't worry. sam: but we have an inspiration. mark: all right. what are you thinking? lemonis: it's very busy. it's very -- mark: where's busy? the box itself? lemonis: where's busy? where isnbusy? -sam: but if look at -- -mark: well, i guess -- sam: if you look at voluspa, it's busy. -mark: wait, yes -- -lemonis: it is, but it's one continuous pattern. mark: yeah, but that's what differentiates us and it's also at an angle right now. -lemonis: you just asked me. -mark: yes. -lemonis: i'm telling you. -mark: yes. -lemonis: it's busy. -sam: what do you like about it? lemonis: i like the floral pattern, but it's very feminine-skewed. here's what i would ask you to try. mark: females are the ones that are buying candles more than men. it is somewhat gender-specific.
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lemonis: mark, you can't argue. the big candle companies are a little more gender-neutral. i mean, i know that women rule the world, but they're not the only ones who buy candle. we're gonna make baby steps. a little feedback. make the change. i...think he'll get there. mark: this i think looks incredible. i'll still stand by it. lemonis: if your business is in trouble and you need my help, log on to... the cold truth is, if a cold keeps you up at night... you can't work from home the next day. [ coughing ] that's why you need alka seltzer plus day night liquid gels. it's tough cold symptom fighters provide powerful relief. relief that helps you sleep at night and gets you back out there during the day. [ deep breath ] [ truck horn ]
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you are back. the x1 voice remote is here. can't argue. the big candle companies are a little more gender-neutral. mark: this i think looks incredible. i'll stand by it. lemonis: mark, i'm not telling you it's bad. you have to look at it objectively, not as a designer. like, if you went into a bedroom and you saw a duvet cover -that was that -- -mark: yeah. lemonis: you would know it's a female room. -sam: mm-hmm. -lemonis: i'm thinking that a way to maybe lighten that up -- -mark: yes. -lemonis: is to somehow -take this whole palette -- -mark: yes. lemonis: and black and white it other than a couple of flowers. sam: ooh. that's an interesting idea. lemonis: if you pulled this whole thing up and you took it down to 10% color, it would almost disappear, right? and then you just gave me one -- mark: pop. lemonis: i'd gray-shade this, too. mark: i like it, but i don't like how you're saying to bring down the color in that. lemonis: just make it less harsh. mark: i like the black and white. see, that's why i guess we chose just to do it on the sides of the box, so it was like a hint. lemonis: it doesn't feel like a hint to me. -i just want it cleaner. -sam: cleaner, simpler. okay.
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mark: it's a lot to edit, edit-wise. -lemonis: can you pull it up? -mark: yeah, well. sam: while he pulls it up, can i show you the fragrances? i have all-new fragrances for you. i actually did a whole focus group. -52 people did my focus group. -lemonis: great. sam: okay, so this is the first one, which goes with this one right here. -lemonis: nice. -sam: yeah. and then this is spice fleur. lemonis: nice. sam: and this one is lavender-vanille, which is just lavender, vanilla, and a leafy green. lemonis: all very perfumy. sam: oh, 'cause we need to masculine it a little bit. lemonis: you need something citrusy and something masculine. -sam: okay. -lemonis: i was very impressed that sam put the research into it and had a focus group, and i like the fact that she was open to sort of dialoguing about it. on the other hand, mark is still arguing with me. so is that it, right there? mark: okay, so this is where it starts from. -lemonis: take it down. -mark: but -- lemonis: take the color grade down. sam: i love that. mark: did you think about this for a while? lemonis: when i saw it. -mark: really? -sam: wow. lemonis: you guys, by the way, the name of the company isn't gonna be wick[ed] anymore because it's too niche-y. mark: all right. wow.
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lemonis: i'd really like to come up with something that has your last name in it. and so i really like biren & company. i'd like to see that on our order. -mark: yeah. -sam: biren & company? -lemonis: i'm the company. -sam: biren & co. i love it. mark: i like it. yeah. sam: i really, really freaking love that. lemonis: so here's the deal. i want you to finish these designs. mark: all right. lemonis: i feel like you're missing one scent. something that's a little more masculine citrusy, and then you got to get ahold of arvin from modern candle and get boxes printed. i will tell you that if you do not work with arvin and do what you say you're gonna do, i can't do business with you. clear? -sam: deal. -mark: yeah. lemonis: i always knew that i wanted mark and sam's company to be more than a candle company. i wanted it to be a design and scent company. today, they're gonna find out why. i'm taking them to market ready in chicago. -okay. -mark: oh, wow. this looks interesting. lemonis: the kitting that i'm looking for could be a self-contained kit or a kit that people can buy individual pieces and create
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-their own collection. -korie: okay. lemonis: think about the last time you went a home goods store and you bought a candle. around that candle was a variety of other products that leverage the same design and the same fragrance, like lotions, soaps, room sprays. that's called kitting. in an instant, you can go from just selling candles to having multiple products, and it allows you to double or triple your revenue, like that. what are the products that we should be thinking about first? korie: okay, certainly the diffuser because it naturally plays into the fragrance, so that would be number one. -number two would be a bath gel. -sam: mm-hmm. korie: and certainly there's other options we can consider, but the third would be a lotion. sam: okay. that's cool. lemonis: you can come to these guys -to do just co-packing. -sam: right. lemonis: that's not what i'm interested in. i'm interested in a relationship with people that are experts. that's why we went to modern candle because we want to find somebody that does it better than us. -sam: yep. -lemonis: that's why we're here. market ready is one of the largest companies for taking people's products and expanding them in other areas. not only do they have the know-how
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of bringing a new product to the market, but they have factories all over the country. so as your business grows, you can grow with them without all the rising costs. man: every day in our three blending and filling facilities we make 600,000 to 800,000 pieces. -mark: what? -sam: wow. -this is surreal. -korie: aww. sam: i feel like i need to be pinched. lemonis: the way to think about this is that modern candles is gonna make our candles, and this place is gonna make everything that is the kit around it. and they will be your distribution center, as well. mark: wow. all right. -i'm in another world. -sam: wow. this is so crazy. this is -- mark: this is like what we want. sam: marcus, this is like what we've always wanted. korie: aww. mark: amazing. ♪ [ cellphone rings ] -arvin: hey, marcus. -lemonis: hey, arvin. -how are you, buddy? -arvin: good, yourself? lemonis: good. i wanted to check in with you and find out what sort of progress has been made
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since i was there last? arvin: um, the last spoke to mark, he said he'll give me a call, but i have gotten anything yet. lemonis: you guys haven't started anything yet? arvin: i called them and asked. i was waiting for mark to come back to me. lemonis: you had to call him. he didn't call you. -arvin: yes, exactly. -lemonis: okay. when i left, we were making candles at modern candle. now i'm finding out that mark didn't even follow up with them. this is [bleep] i'm gonna see him in a little bit. i'll be in touch later today, okay? -arvin: all right. -lemonis: thank you, buddy. we had a clear agreement that he was over all of the issues that he had. for me to come back several weeks later, thinking that i'm gonna see a finished product to find out that he didn't even call the guy, i was not happy. where were you supposed to go and who were you supposed to work with the last time i left? mark: we were supposed to go over to modern candles. lemonis: and did you? mark: um, well, i've spoken to them. lemonis: you called him? mark: uh, the son called me. lemonis: so he followed up with you. mark: i didn't know what was working and --
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lemonis: he called you, you told him -you'd get back to him. -mark: yes. lemonis: you really had no intent of getting back to him. mark: well, i -- no, no. i felt just awkward. there's just certain things that happened -that's still in my head. -sam: that's in his head. lemonis: but if i would have let you off the hook, would you have ever called them again? mark: probably not. lemonis: you basically ignored our agreement. when i walk away from a situation and somebody tells me "we're going to do this" -- "it's hard for me, but i'm gonna be forgiving, get over the past, not hold a grudge." -you gave me that impression. -mark: mm-hmm. lemonis: and so i left there feeling like you had moved on and that we were moving forward. -mark: yes. -lemonis: if we shake hands and we agree on something and i do my part, spending money sourcing other kitting products that can go along with candles and i think you're doing something else, and you don't, it breaks the chain for me. while i'm trusting you, i didn't feel like you were trusting me. i don't know if he understood how disappointed and angry i was about this situation. he kind of took it lightly. there's something else at the root
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of why mark is acting like a big, giant pain in the ass. you have a tendency of holding grudges. sam: yes. you do. -you're very stubborn. -mark: yeah. sam: and you can get over things, but it takes you too long. lemonis: and does this have to do with you wanting to control things and not trusting people? -is there a trust issue? -mark: it's trust. lemonis: and walk me through that. what happened that causes you not to trust people? mark: i can't get into that. lemonis: i need to understand it because -- sam: he can't get it. it's deep. -lemonis: i'm sorry. -sam: it's deep, marcus. lemonis: i'm sorry. then you can walk away. -mark: i cannot -- -lemonis: mark, i'm telling you, for me to move forward with you, i need to understand it. mark: i don't know. mark: so our new collection, we tried to go with a traditional look with a little modern touch to it. scott: it may be beautiful, but we're not gonna see the results in sales that we all are hoping for.
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'm telling you, for me to move forward with you, i need to understand it. what happened that causes you not to trust people? mark: i don't know. lemonis: i'm sorry that i'm making you do this, but i need to understand it. mark: i guess -- my parents got divorced... [ clears throat ] um... ...and a lot of fighting. lemonis: between them? mark: not my parents. lemonis: another family member.
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mark: yeah. it was just -- any time i was trying to do something, it really was, "oh, that's not it, you need to do something else. that's not gonna work, do this." or it's just telling me things about my looks or like "what's wrong with you?" and that still sticks in my head. lemonis: like verbally abusing you? mark: yeah. lemonis: i'm sorry. mark: i don't know. it's just this overwhelming feeling of just trying to figure, like, at points, like, who i could trust. lemonis: so the fact that other family members were making you feel small or inferior and not knowing who to turn to and who to trust? -am i -- -mark: at the end, yeah. it's like, it lays down on me 'cause i don't ask for it anymore, about when i needed something. lemonis: he really struggles to tell me that he's struggled with trust his whole life. you know, i, uh, i understand. it doesn't make him not working with modern candle okay, but it gives me a perspective on his logic,
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that he's not a bad guy. he just comes from a very broken place. you took that experience of a bad order and somebody not agreeing with you and you correlated that to the bad experiences you've had growing up. you have to separate business from that stuff. mark: i know. lemonis: and everybody that you do business with deserves a fair chance. i'm telling you something -- it will free you. mark: totally. lemonis: so you are gonna call arvin and say, -"you know what, brother?" -mark: "sorry, man." lemonis: "i didn't do you a solid. i should have called you back. i want a fresh start, and i want it just to be you and me. -can we do that?" -mark: okay. lemonis: give them a chance. ♪ today i'm going back to modern candle just to kind of get a progress report on when i was gonna see a finished product. i was excited. mark: right now, this box is gonna be like a softer box. lemonis: what happened to your eye? -mark: basketball. -lemonis: you got elbowed? -mark: yes. -arvin: it's happened to me before, too.
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lemonis: okay. mark: originally, i wanted to go into where it's like a rigid box, where it's really nice and hard and it opens up. sam: but that's more expensive. mark: but that's where it gets pricy. lemonis: you can't break $7 in cost 'cause you want to keystone to the retailer. -mark: yeah. -lemonis: at $14. and they're gonna want to keystone to the consumer at $28. keystone refers to a standard margin of 50% on a product every time it changes hands. now that we want to retail the candle to the consumer for $28, we know that we'll have to wholesale it for $14, and that means that our production costs can't exceed $7. that's our ceiling. -let's look at the glasses. -arvin: so, this is one. -mark: that's the glass. -lemonis: too small. too small. mark: well, i try to do three different variations, three difference price points. that's where i was kind of going with that. lemonis: well, but then you're creating too many skus in the early stages of the business. i want you to pick a streamlined number of glasses so that you can get the economy. so if you have five different platforms, you're not having five different glasses because you're not gonna get the volume out of them.
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sam: ahh. lemonis: and then the second thing is gonna be value and perception. i would bet that the difference in manufacturing this versus this is not very significant. what is this glass gonna cost filled with wax and fragrance on average? arvin: $5. -lemonis: what's this gonna cost? -arvin: $6. lemonis: the difference in cost is $1. the difference in perceived value -- mark: yes. the customer wants that. lemonis: i feel like i'm gonna get a lot more. sam: that makes it a lot easier. if we can stick with one glass... lemonis: we're gonna have simplicity in manufacturing and simplicity in pricing. -mark: cool. -lemonis: okay? -mark: i like it. -lemonis: all right. so we'll move on from that one. ♪ -sam: hi. -scott: hi. how are you? -lemonis: hi, scott. i'm marcus. -scott: marcus. -it's a pleasure to meet you. -lemonis: nice to see you. -scott: thanks for coming in. -lemonis: this is samantha. -sam: nice to meet you. -scott: sam, nice to meet you. -mark: how you doing? mark. -lemonis: this is mark. -scott: mark. it's a pleasure. -mark: very nice to meet you. lemonis: the harper group is one of the most well-known product rep groups in new york city, and what they essentially do is
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they take a manufacturer's product and they basically distribute or rep it to retailers across the country. and so it's a step that's necessary to be able to get in a lot of different storefronts. are you guys ready? sam: we are ready. -mark: come on in. -sam: okay. lemonis: this is a big opportunity. i hope mark can keep an open mind during the pitch and not react to criticism. no distributor wants to take on a pain-in-the-ass partner. mark: so, our new collection is called the flora collection. -scott: okay. -mark: so from start, you know, we tried to go with a traditional look with a little modern touch to it. we went to -- we went to, like, that old-school, we were trying to think of like -- -sam: like a vintage. -mark: old vintage wallpaper. -scott: sure. -mark: so, yeah, we almost wanted to, like, bring some vibrance to it but still have that old feel to it, and i feel like this is kind of the route we went. sam: yeah. scott: i think from the packaging standpoint, when we find product that is too focused,
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it may be beautiful, but we're not gonna necessarily see the results in sales that we all are hoping for. lemonis: for exclusives, extras, and business advice, visit...
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watching tvs get sharper, you've had it tough. bigger, smugger. and you? rubbery buttons. enter the x1 voice remote. now when someone says... show me funny movies. watch discovery. record this. voila. remotes, come out from the cushions, you are back. the x1 voice remote is here. scott: i think from the packaging standpoint, when we find product that is too focused, it may be beautiful, but we're not gonna necessarily see the results in sales that we all are hoping for. when we look at trying to sell an overall brand, you know, we're not just trying to sell one candle. -mark: of course. -scott: we're trying to sell a collection of candles or we're trying to sell different segments for the brand.
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so having a design such as this that not only is hitting some of the classic feel but also have a little of a modern twinge to it, as well, is gonna give you a broader base of consumers, and that's something we always look for. so very, very well done. mark: all right, so here is the kitting for this. sam: yes. mark: so, i just did two fragrances of the new collection, what it would look like if we started putting it on other products. scott: okay. so you have here a diffuser, it looks like a hand cream, some bath soap, some body lotion, and a -- -mark: and like a room spray. -scott: a room spray. -uh-huh. -mark: yeah, for now. scott: i think it looks good, mark. i think you're pulling together a lot of the design aspects. it allows us, as well, to have a lot more options to go into our retailers. this how you build a brand. sam: so, you're holding the citrus fragrance that trended very high. -scott: that's beautiful. -sam: it's amazing. lemonis: and i feel like the packaging and the scent match up really nicely. scott: that makes a lot of sense.
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sam: yeah, yeah, i agree. scott: i think that's a very strong collection. -i really do. -lemonis: what do we need to do to get you to rep this product and get it out into the marketplace? scott: talk to me about some of the price points we're talking about here. mark: now it's just candles, so it would be $14. lemonis: well, that's wholesaling, so he wants to know -- scott: we'll look at it at wholesale, figuring a keystone market. lemonis: okay. okay, great. scott: that's a good number. mark: yeah. lemonis: so, are we in business? scott: we're in business. -sam: yay! -lemonis: all right. -scott: thank you very much. -sam: i'm so excited. -mark: thank you so much. -scott: it's a pleasure, yeah. -absolutely. -sam: thank you so much, scott. -scott: thank you. we look forward to it. -sam: so excited. lemonis: i was impressed with mark's performance. he stayed focused, and more importantly, he's trusting the process. i have to be honest. i'm very proud of the progress that you've made. mark: it's been a long process. not just me, her, too. lemonis: yeah, i'm definitely proud of sam, but her road wasn't as bumpy, and i think sam would agree. i feel like you've really become a better listener. you're taking feedback a lot better.
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mark: you just pushing me to another level to like, open my eyes and really see the view of other people. lemonis: look, a lot of things have changed at this candle company in burbank, california. we've changed the process for designing and selecting scents, and we've moved the manufacturing to a co-packer so that mark can focus on designs. we've designed a product that has much more mass appeal without all the stories. we're getting into kitting, and we've gotten them into the harper group, one of the best-known rep groups in the country. when i walked into wick[ed], it was just a start-up, but i now feel like we're well on our way to being a contender in the candle and home goods industry. sam: you've done the work, mark. proud of you. lemonis: yeah, so you got us here, brother. -sam: yeah. -lemonis: did a good job. -sam: love you. -lemonis: i'm proud of you. sam: it's exciting. things are falling into place. -mark: yeah. -sam: yay. -lemonis: good job, guys. -sam: finally. ugh. it's all happening.
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♪ andreas: meat in the gyro? tonight on "the profit"... lemonis: big fat greek gyro is a small franchise with a growing footprint. are you guys still in love with this business? -mike: i am. -kathleen: i am. lemonis: already, there are five locations up and running. -how long have you been here? -jace: a little over 3 years. lemonis: and as the business has grown, so have the problems. mike: you're my partner. you can pick up the slack, as well. kathleen: you're gonna put it on me now? lemonis: husband-and-wife team who started it have no idea how to run it. rich: i've lost respect for mike as an individual. lemonis: their food misses the mark. they're actually terrible. andreas: you don't like them? lemonis: no. their branding is all over the place. hamburgers and hot dogs? and the franchisees aren't getting anything close to the help they need. kane: the only help we ever got from them was on the first of the month, they came and picked up their royalty check. lemonis: for this business to survive,


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