Québec’s Bouty Inc: Lessons Learned on the Road to Export Success

Québec’s Bouty Inc: Lessons Learned on the Road to Export Success

For years, Bouty Inc., a well-known Quebec chair manufacturer, operated as a family business under a “maximum profit for minimal risk” model. But when the Bouthillier family, after which the company was named, sold the business in 2009, its new owner started looking further afield.

Today, after a few years of success in breaking into the American market, Eric Morin is working on a comprehensive export strategy for his company.

Out of its Montreal factory, Bouty designs and manufactures office chairs and accessories for a broad spectrum of corporate and government clients. With decades of experience under its belt, the company boasts quality engineering and innovation to offer clients furniture that is ergonomically and aesthetically designed while maintaining a focus on comfort and durability.

The business was launched decades ago by serving residential customers with upholstery services, but by the 1980s, it had moved into serving corporate customers.

“It was never in the family’s DNA to export,” says Morin, who is firmly convinced of his exporting opportunities. In short, it may well be in his DNA. “The business gave them what they needed in terms of revenue at a great ratio with minimum risk and maximum results. They had sold to a few customers in the U.S., but that was it. I’d had previous experiences in my career in dealing with customers outside of Quebec and outside of Canada and that’s the way I knew I wanted to go.”

Today, he sells his products in almost every province, and has sold to companies in at least 12 states in the U.S.

The furniture industry works on the basis of contract deals, so it’s largely business-to-business. Companies that need furniture use an office furniture dealer network and experts such as ergonomists, architects and designers to find the best product for their needs.

“So our business development is aimed at three axes: End users, office furniture dealers, who will send that product to the end users, and the experts who will influence end-users,” Morin said.

To break into more new markets, therefore, Morin needs to make his product known to those three categories of professionals and to develop a sales force.

“We rely on a manufacturers agent representative model, so the first step in our plans was to get the brand out there to attract those agents,” he said.

To that end, Bouty Inc. has participated in the Chicago-based NeoCon, North America’s largest design exposition for commercial interiors, every year for the past three years

“We had a booth there and we got our name out there and were able to get some visitors, build some relationships,” Morin said. “We recruited a number of manufacturing agents that represent us today. We have about 15 agents in the U.S. and about five in Canada. We’re working on getting that number to 30.”

The agents are self-employed people who represent manufacturers such as him. A typical manufacturing agent might hold between two and six product lines.

“In our case, they may represent our office furniture line, lighting, accessories and so on,” he said. “That person visits those influencers to represent the products and get sales. Our typical salesperson will have samples, binders, and we train these people to represent us. The first step was to get some agents on board who are willing to take our binders in their cars everyday and preach our products.”

Morin says selling outside of Canada is a major goal within Bouty’s already ambitious growth strategy. So far, the company has worked with Southern California Energy in Los Angeles; Southern Nazarene University in Bethany, Oklahoma; CPS Energy in San Antonio, Texas; and Sears and Unilever, both in Chicago.

“We have great products and a well-known brand in Canada,” he said. “Now that we have sales from British Columbia to the Atlantic provinces, it’s time to get sell that product further outside of Canada’s borders.”

Asked about lessons learned so far in his exporting experience, Morin said logistics is something he continues to try to perfect.

“We have a product that ships in a box and the cost and the best practices in terms of packaging are things we’ve had difficulty with,” he said. “It’s not a lesson learned quite yet, because it’s something we’re still struggling with. It’s a challenge.”

He said it’s difficult to build relationships with customers if shipping costs make you less competitive.

His other challenge has been a tendency to underestimate the presence of large manufacturers in his market.

“We sell through agents who sell through a dealer network,” he explained. “The alliances they’ve established through the years with major manufacturers makes it more challenging for us to break into the market.”

Nevertheless, he’s pleased with his initial foray into exporting, and feels his cautious approach has been wise. “For us to go after all 52 states at once wouldn’t have been feasible. In that sense, I think we’ve done it right. I’ve always said ‘Let’s do the best we can while managing costs.’ We need to control the growth.”

He noted that the Canadian market has been slow for the past five years, putting pressure on sales and margins. In the U.S., things were slow as well, with the recovery beginning two years ago.

“I always feel it’s in those times that you can prepare and get ready for when things pick up and they have been picking up in the U.S.,” he said.

Asked what he would do differently if he were to start again, he said he would have hired a full-time employee devoted to exports earlier. “I should have done that right from the start. I did the work myself for a while, but I should have invested in a staff member earlier.”

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