LumberMart: Using online sales to bolster business through exporting

LumberMart: Using online sales to bolster business through exporting

In an award citation for eBay’s Exporter of the Year in 2015, winner Kimberley Wotherspoon was referred to as an “intrepreneur.” The manager of online sales and marketing at LumberMart, an independently owned hardware store in Halifax and Dartmouth, Wotherspoon behaves like an entrepreneur while working for someone else, the citation said.

Indeed she does. She was hired to launch LumberMart’s online business, to help the company stay competitive in an environment where it’s surrounded by 15 competitors in a 10-kilometre radius. She launched in October 2014 and had her first sale almost immediately. Today, her division accounts for almost 10 per cent of the corporation’s annual sales.

“The company offers a mix of hardware and building supplies,” Wotherspoon explained of the bricks and mortar operations. “We have a lumberyard, but we only sell hardware items online. Basically, we sell items that don’t cost a lot to ship — housewares, tools, plumbing and electrical.”

Her growing division creates extra cash flow in the winter when sales are slow in the lumberyard and that was the goal.

For the eBay award, her submission was chosen from about 200.

“I think I won because in our first year, 60 per cent of our online sales were outside of Canada,” the now-veteran exporter said. “Now, it ranges between 60 and 70 per cent.”

The bulk of online sales go to the U.S., but a full 10 per cent go outside of North America. Sweden, Denmark and Australia are all popular destinations.

“Today, I had my first sale to South Africa,” Wotherspoon said. “We don’t sell much to Asia, but we sell some, which is funny because some products comes from China in the first place.”

Where the product is going is of interest to her in-store colleagues, she said. Her eBay phone app makes a “ka-ching!” noise every time she makes an online sale, which always elicits questions from colleagues. “It’s a conversation piece, for sure,” she said.

For LumberMart, business in the U.S. has been picking up for several months because of the weak Canadian dollar, something she noticed from the U.K. before Brexit as well.

“When you’re buying on eBay, you don’t always know where you’re buying from, but you can see the prices and when you factor in the value of your own currency, they can be attractive,” she said.

Shipping, however, presents challenges. She doesn’t, for example, ship anything breakable because shippers’ insurance covers very little breakage — a good lesson for any exporter. Instead, she ships small items — such as toilets flaps and vacuum cleaner bags — that she can send through Canada Post, the most cost-effective channel.

Though shipping can be a pain, the eBay platform is user-friendly and offers an instant global customer base.

“The system is set up and you have a large audience right there,” she said. “The fact that they have a mobile app means I can answer calls from my phone and I can be anywhere when I do that.”

Customers that come to them are almost always searching for specific products though she has had a few word-of-mouth referrals. She said LumberMart distinguishes itself online with its excellent customer service.

“We have a 100 per cent approval rating on customer service,” Wotherspoon said. “I’ve worked hard for that. I answer every single email from customers and I often do it quickly. I enjoy the interaction and making them feel special.”

The other way they stand out is with their products. Not everyone is selling toilet flaps online, after all. Occasionally, she’s shipped a $4 item overseas with a $20 shipping cost because the person really wanted to buy it online. “Maybe they didn’t have a car,” she said.

Returns can be a problem for online retailers, but LumberMart’s return rate is less than one per cent, partly because of Wotherspoon’s diligent customer service. “Anytime I sell a power-tool overseas, I inquire about their electrical requirements,” she said. “It’s important to know whether they’ll be able to plug it in.”

Get more export insights from Kimberley Wotherspoon here.

Interested in learning about other companies like LumberMart?

When one thinks of a multinational, worldwide corporations that own or control production of goods and services in more than one country might come to mind — maybe Royal Dutch Shell and Barrick Gold.

But there’s also a term — a micro-multinational — that denotes small- and medium-sized enterprises that export using technology platforms such as eBay and that have sales of $10,000 or more in a year.

“The vast majority of sales for our micro-multinationals come from outside of Canada,” said Camille Kowalewski, eBay Canada’s head of communications. “And the average number of countries to which an eBay micro-multinational sells is 18, in comparison to about 2.5 for traditional exporters.”

The top markets to which eBay’s micro-multinationals export are the United States, the United Kingdom, Australia, China, and Germany.

In a survey, eBay found that sellers who export have nearly 60 per cent more in sales than those who don’t, and they are also more likely than non-exporters to believe there are new market opportunities for them (70 per cent versus 36 per cent).

This series highlights some of Canada’s top micro-multinationals, such as Wooki and Boutique Step Up.

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