How This Wheel Business Did $5.5M Sales Just 3 Months Into 2023! [Update]
This is a follow up story for Shark Wheel. If you're interested in reading how they got started, published over 5 years ago, check it out here.
Hello again! Remind us who you are and what business you started.
The Shark Wheel is the reinvention of the wheel for consumer and industrial products. Shark Wheel has been featured in Shark Tank, the Discovery Channel, and FedEx commercials.
My name is Zack Fleishman and I am the CEO and Co-Founder of Shark Wheel. Shark Wheel’s primary focus is on skateboarding and agriculture - two wildly different industries. But, we are solving important issues in each market. Shark Wheel has roughly $5.5M in sales just from March-June 2023
The only wheel ever invented that is 540 degrees and is a hybrid between a sphere and a cube. Yes, the shape below rolls perfectly!
Here’s the link to our original Starter Story interview!
Tell us about what you’ve been up to. Has the business been growing?
Shark Wheel continues to grow. We have transformed quite a bit in the past year. We transitioned from an R&D company in large part to a sales company. Our primary focus in the past was trying to figure out how to make wheels for skateboards, electric skateboards, roller skates, luggage, industrial casters, pallet jacks, forklifts, and agriculture wheels among other products.
Now that we have commercialized several products, we chose to slim down the Shark Wheel worker count significantly and streamline our operations. We moved all inventory into a 3PL to remove ourselves from the shipping, inventory management, and logistics game.
As we grew, it cost us too much money and too much of a headache to continue to grow our warehouse footprint and our employee count. So much time was spent on organizing the warehouse, securing more warehouse space, managing our inventory, etc. Not enough focus was placed on sales, which is the most important part of any company.
We fired a lot of workers, slimmed down, moved to a small office space, moved all inventory to 2 different fulfillment centers, and chose to focus only on sales. We have more than doubled our previous year’s revenue in a 3-month timeframe and have the lowest expenses we have ever had. It took a lot of time to get where we are. Our agriculture wheel took nearly 5 years of development and testing. We have less than 10 employees now.
We also changed our business model and instead of focusing on B2C, we have focused more on partnerships to help accelerate our growth and more of a B2B model. This has allowed us to reduce our headcount, have our partners working to help grow our revenue and visibility, and has allowed us to focus on the most profitable segments of our business.
Even our Amazon account became a B2B partnership, where a company buys inventory from us upfront and sells it under our account. They made us the #1 selling skateboard wheel on Amazon this year!
We also partnered with Reinke (~30% market share in irrigation) and Fortune 500 company Bridgestone/Firestone for our agriculture wheel. We are now in over 3,000 dealers in North America.
Originally, we were going to hire a sales team, but we chose to allow our partners to effectively become our sales team where we don’t have to pay anyone a salary. This way we don’t have to compete for sales with our partners and we send all traffic to them through our dealer locator page on our website (sharkwheelag.com/dealers).
We have built our Instagram following from 39,000 to 89,000 in the past 2 months! Our partner in social media has leveraged their existing influencer network to post about our company. Our partner is also a customer of ours but has 350,000 followers on Instagram alone. Influencers are the key.
Don’t waste money. Take a measured approach, do A/B testing, slowly scale up ad spend and track what is working and what is not working.
Another major improvement has been our accounting. We lived in the stone age for too long doing manual bookkeeping that took a long time. We switched banks (to Chase), switched accounting platforms (from Quickbooks to Xero), and automated everything.
Now the manual bookkeeping is nearly gone and all of our systems are now connected. We can see our financials quickly now and can understand the health of our business when we need to and plan accordingly.
What have been your biggest challenges in the last year?
Our biggest challenge in the past year has been change. And specifically firing a lot of people. We had nearly 20 people at one point working at Shark Wheel. We are now down to 6 people and our revenues have never been higher.
Rob McGovern, the founder of careerbuilder.com said that one of the most important things in building a successful company is firing a lot of people. It takes time to build the right team. It is a difficult reality, but a reality nonetheless.
Another big challenge for us has been learning about debt financing. Previously, we focused on raising capital, but now we are focused on purchase order financing. It has been a learning experience after spending a lot of time speaking with many different funding companies and banks.
What have been your biggest lessons learned in the last year?
The biggest lesson we learned was regarding the aforementioned debt financing. We found innovative ways to fund the business. You can thank me later for this golden nugget.
For example, the traditional way to fund a purchase order is to take out a loan. Your search for the best APR you can secure. But, in this way, you are paying a lot of interest over time. We learned that we can place a 20% deposit with our vendors (either by self-funding or taking a small working capital loan) and then pay the 80% remaining balance through a letter of credit.
We had been paying the balance on orders right at the time of shipping from our factories and then we had to wait 1 month for the orders to ship to our customers and then the net-30 terms would start. That would be up to 5 months before we were paid a penny on the money we paid interest on for those 5 months.
Now, we are using a Letter of Credit from the bank that promises to pay our factories 60 days after they ship. So, the factory feels comfortable that they are contractually guaranteed to be paid by a large bank and we are feeling even better because we don’t pay any balances until we are paid in full by our customers. So, we only take a loan out on small deposits if necessary now. Wow.
Another big lesson has been that it is ok to pass on opportunities to focus on the low-hanging fruit. I always wanted to go after every potential sale, but learned it’s usually better to focus on where the money is coming from and put your time, effort, and energy into fewer things.
Too many people build their product and then they try to figure out how to sell it. You need to know that answer before you build it.
What’s in the plans for the upcoming year, and the next 5 years?
The plan for the coming year is to continue to find more efficiencies, to continue to automate the business, and to continue to grow through partnerships. Our goal is to become an industry leader in skateboarding and agriculture. In agriculture, it is the first product we have ever had where our customers need our solution.
Our previous products, we would need to convince our customers to buy. But, in agriculture, we simply show farmers that they can save $26,000 per year using our wheels. Farmers need airless tires that do not leave a rut, or a trench, in the soil.
The more downtime they have, the lower their crop yield is and the lower their profits are. Our wheel was funded by the National Science Foundation and after many customer discovery interviews, we designed a wheel that met the needs of all farmers.
So, we knew we were building something that the market needed and at a price, they would be willing to pay.
What’s the best thing you read in the last year?
The best thing I read in the past year was my notes from Rob McGovern’s speech when I was in attendance at the National Science Foundation. Although it is a sensitive topic, I had to remind myself that it is ok to fire people.
Although it is so difficult, it is necessary. You have to put your brain in the mindset that the business comes before any personal relationships and you have to make business decisions that are focused solely on the betterment of the company.
Advice for other entrepreneurs who might be struggling to grow their business?
Don’t waste money. Take a measured approach, do A/B testing, slowly scale up ad spend and track what is working and what is not working.
But, my number one pointer is to make sure your business has done its homework and you have interviewed many people. This way you can make sure that your business is providing customers something they want or need and at a price they are willing to pay before you ever start.
Too many people build their product and then they try to figure out how to sell it. You need to know that answer before you build it.
Where can we go to learn more?
- Website - Shark Wheel and Shark Wheel Ag
- Youtube
If you have any questions or comments, drop a comment below!
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