Across the United States and Canada, and in parts of Europe and Japan, stand more than 1,400 log buildings that were hewn and handcrafted in a British Columbia construction yard before being packaged and shipped out as building kits.
The maker of these log home kits, Canada’s Log People Inc., has built a successful export business by consistently creating high-quality products from B.C. timber. In fact, this emphasis on quality is critical for any company that exports large items, says Theo Wiering, owner and founder of Canada’s Log People, located in 100 Mile House in south-central B.C.
“It will cost a lot of money to ship the product back if there are quality issues,” says Wering. “So we make sure our quality is the same regardless of the product and building plan. When you have consistent, good quality, you produce longevity in your business.”
An upmarket niche with a global scale
Canada’s Log People certainly has staying power. Almost 40 years after it built and sold its first log house, the company continues to thrive in the upmarket niche it carved out for itself, selling about 40 log home kits a year.
About a third of Canada’s Log People products go to buyers in B.C., Alberta and Saskatchewan. The rest leave the country, bound mostly for the U.S., with a few placed in 40-foot containers and shipped to Japan and Europe.
A Canada’s Log People building kit ranges in price from about $20 to $40 a square foot. That means a 2,000-square-foot log house kit could have a price tag of $40,000 to $80,000 depending on the type of wood and complexity of the home design.
“That’s just for the building kit,” notes Wiering, whose company employs 15 workers. “The cost of a completed house usually runs $200 a square foot and up, depending on your finishing tastes. With a proper roof and foundation, a log home will last for several generations.”
International sales through local relationships
Canada’s Log People started exporting in 1983, shortly after Wiering met an executive from a German company that built pre-fabricated homes.
“He told me his company was interested in log homes,” recalls Wiering. “Over the next 10 years, we shipped out about 35 log packages to Germany. Unfortunately, when reunification happened in Germany, our client had some challenges, and their log home business went under.”
Fortunately for Canada’s Log People, Wiering was already actively building a broad client base in other export markets. Today about 50 per cent of the company’s foreign sales are in the U.S. Wiering says a key factor in the company’s success in America is due to its strong relationships with local dealers, many of whom have backgrounds in construction.
“I figured that Americans like to deal with Americans,” he says. “So in the late 1980s I went to some trade shows in the U.S. and looked for companies that were selling machined log homes. I started working with dealers who loved our products so much that after about three years, they got rid of the machined log homes and we became their exclusive suppliers.”
Wiering says his distribution model varies from one country to another. In the U.S. and Scotland, he sells primarily through dealers. In Japan, he works with a resort owner and land developer. Canada’s Log People also sells directly to consumers, typically wealthy individuals looking to add to their collection of homes.
Sustainability in business and practice
While building a log home is an old craft, todays’ structures are crafted to meet the latest regulatory standards for safety and energy efficiency. For Wiering, this means ensuring that he and his crew are always up-to-date on the latest rules.
“It’s been a learning curve, but it’s not an issue for us today,” he says. “Perhaps a bigger challenge is just ensuring that our target audience knows about our stringent environmental policies. We plant six trees for every log we use, but we still have to convince some people that our products are sustainable, and that wood is a renewable resource.”
Currency fluctuations have also been a challenge for Canada’s Log People: when the dollar goes up, sales go down. But the business has also suffered during periods when the dollar was down, because a large portion of its accounts receivable is in U.S. dollars, says Wiering. To address the latter problem, Wiering has at times set up a forward contract with his bank to lock in the value of his U.S. dollar receivables.
Growing a global market
Today, Wiering is working to grow his export business, and would like to see it account for about 90 per cent of his revenue. To this end, Canada’s Log People has increased its advertising efforts, with a greater focus on construction companies.
“We’ve got an amazing product, with everything handcrafted from the best timber in the world,” says Wiering. “There’s no question that there’s a global market for our log homes.”
From the CEO’s mouth
Building a global market for large-scale, luxury products is a challenging endeavour. Theo Wiering, of Canada’s Log People in 100 Mile House, B.C., shares some best practices that helped him sell more than 1,400 log homes to export customers over the last three decades:
- Be a stickler for quality. Returned items can translate into significant shipping costs for exporters. To protect profit margins, Wiering suggests implementing stringent quality control processes.
- Hedge against currency fluctuations. Foreign exchange strategies can help exporters mitigate currency risks. Forward contracts, which lock in the value of currency at a future date, have worked well for Canada’s Log People.
- Find a good customs broker. After working with less-than-proficient customs brokers who caused shipping delays, Canada’s Log People now works exclusively with two tried-and-true providers.