Looking for a gateway to international markets? You may find one in your own backyard.
That was Dez Price’s experience. The Vancouver and Whistler resident spent more than two decades in sales and marketing of action sport and lifestyle brands including Reef, Obey, Osiris and others. In 2010, he and long-time colleague Dustin Bigney co-founded MyPakage Apparel Company, a Canadian manufacturer of high-end men’s undergarments now making strides in markets worldwide.
“We saw an opportunity to create a patented product, and drive something with great potential,” says Price, now the firm’s Senior VP and Creative Director.
In MyPakage Apparel, Price and Digney are blending all the right ingredients to capitalize on what Price describes as “the fastest growing category in men’s apparel worldwide.”
By 2014, consumers worldwide were starting to take note of the company’s innovative undergarments.
The firm’s performance line features breathable and moisture-wicking MyDry Technology fabrics. “There’s nothing else like us in terms of comfort,” says Price.
According to Canadian Apparel Federation Executive Director Bob Kirke, companies that manufacture niche products, focus on design innovation, and command a premium price tend do well internationally. MyPakage checks all of those boxes, including retailing its garments for $25 to $50 a pair.
“Companies in niche product categories, or that have specialized production or product capabilities – they can sell anywhere. Many companies doing well in export markets writ-large are like that,” says Kirke, noting the U.S. the largest destination for Canadian apparel exports, accounting for about 90 per cent of our sales.
While MyPakage focused its earliest exports on the U.S., Price says the resort community of Whistler, B.C. proved to be an excellent gateway to offshore consumers, with tourists often asking where they could find the brand overseas.
“We had customers from around the world who either bought product in Canada or online. The response was always the same: ‘life changing experience,’… ‘most comfortable underwear ever.’”
Price leveraged that feedback when approaching prospective distributors in Australia, New Zealand, Scandinavian countries and Japan. “We sent distributors the product, so they could experience how they function, how they feel. They saw the potential.”
Price says selling into Japan was particularly memorable.
While he found Japanese buyers “nice, they are also smart and aggressive. They want to win on every deal. You have to hold back, because you know they are going to ask for more during the negotiation.”
Since settling terms, however, the Japanese distributor has proved to be an ideal partner.
“As the stores experienced success with our brand, they started doing seasonal pop-ups (a boutique brand presence within a major retail store). These are amazing; like nothing you’ve seen in North America,” enthuses Price. “In North America, these are generally funded by brands. In Japan, our distributor funded and manages a pop-up store in one of Japan’s top malls and department stores.”
EDC resources to help you export
Selling to Japan wasn’t without its tribulations, however.
Before graduating to container-load shipments of 21,000 pairs at a time, MyPakage’s Japanese distributor ordered smaller quantities directly from the brand’s U.S. warehouse. “The Japanese demand for ‘XS’ and ‘S’ sizes was so large it started to cut into our North American supply,” says Price.
With the brand’s sales doubling month over month, strains on its factories and supply chain began to show.
“We only had one factory in China. We needed a backup plan,” says Price, noting that at least two to three factories working simultaneously were needed to ensure an uninterrupted supply.
Building relationships with the right factories – ones that met the brand’s quality and performance standards, however, was crucial. “Chinese factories always say ‘OK.’ If you want to work with a better factory, you have to sell them hard. They’ve got to believe in the brand too.”
Eventually MyPakage hired dedicated staff to oversee manufacturer relationships. “It costs a lot to send someone to China multiple times each year, but it’s so worth it.”
Having reinforced its supply chain, Price says the company plans to enter the U.K. and Germany in 2017, and has eyes on Italy as well.
Kirke says Canadian textile makers should embrace exporting, especially in light of the Canada-Europe Trade Agreement, which will eliminate a current 12 per cent tariff faced by Canadian manufacturers selling to Europe, but also scrap an 18 per cent duty on European imports into Canada.
“We will see more pressure in the domestic market; European competitors will be 18 per cent cheaper once the agreement is implemented. It is important for Canadian companies at the higher end of the market to increase their exports,” he says. “Higher-end products from Europe will have a much easier time accessing our market – Canadian firms need to respond.”
For its part, MyPakage is no stranger to international risk mitigation.
“Protecting your brand and your IP are critical. Good patent lawyers charge large. They are in the markets. It’s a short-term hard hit, but if you go to sell the business one day, there is your payback,” says Price.
Given the rise of digital marketing, Price adds that protecting a firm’s website and URL are also critical. “Down the road that could be worth 40 per cent or more of your sales.”
For Price and MyPakage, the export journey continues to pays off, sometimes in unexpected ways.
“One of the best parts of international business is the cultural differences. The excitement builds as you prepare to launch. These global experiences bring the entire MyPakage team closer together. It’s a team effort to execute and build a global brand.”
More tips from MyPakage Co-Founder Dez Price
1. Find the right dealers. There are lots of dealers we could sell to, but you have to find the right ones who are aligned in terms of value. It has to work for both of you.
2. Be a motivator. Encourage your distributors to get to a certain level of sales, so they can benefit from economies of scale and efficiencies. You want them making money and feeling good about carrying the product. You’ve got to be a good listener.
3. Tune into local languages. ‘Hang tags’ in local languages are essential.
4. Know your duties. These vary country to country. Understand your full-cost model, so you know what you can make, but just as important what kinds of margins your distributors make.
5. Get it together. There are reasons why the people at the top of a company are from finance and operations. You need great product, but operationally you can either make or lose money fast. You need to have your ducks in a row.