WHAT WORKED Phil Zwibel In Partnership with: Workshop Delivered by: Project Executed by: 1
Why show at MAGIC in Las Vegas • The best CANADIAN buyers • A great cross section of US Buyers • The best of the international shoe buyers In Toronto it’s only Canadians, and most of your target buyers (the wholesalers) are Selling
The Trade Shows by the numbers Number of Buyers Show 1 65 Countries Korea,Thailand,Philippines,UK Mexico,India HIGHLIGHTS Bruno Magli, Ardene,Magnum, Timberland, L’equipeur Numbers of Buyers Show 2 35 Countries Australia, Argentina,UK, India,Panama. HIGHLIGHTS Mezlan,Totes,Hell Bunny, Propet
The Benefits to the Participants ❑ An improved understanding of ALL international sales ❑ A Manual of how to fulfill export and import requirements ❑ Constructive Collection Critique advice ❑ Competitive Analysis of your product. ❑ EXPOSURE TO THE OUTSIDE WORLD 4
The Rules 1. ALWAYS ANSWER EMAILS THE SAME OR THE NEXT DAY. 2. FOB PORT is the most standard and convenient for international buyers. 3. ALWAYS, REPEAT … ALWAYS CHECK THE FITTING AND GET WRITTEN APPROVAL FROM YOUR BUYER. 4. Your buyer may supply special packing, labels instructions. 5. WHEN IN DOUBT, ASK YOUR BUYER 6. ALWAYS ANSWER EMAILS THE SAME OR THE NEXT DAY 5
The Manual How to Introduce your products and your company Samples Sizes Shoe Marking, shoe box marking and carton marking Export packing/Pallets. Anti mold, Silica packets Standard Documentation required for Canada, Summary Instructions on your commercial invoice/Packing list Invoice description for footwear Canada Customs Invoice Certificate of Origin Incoterms Documents required by Indonesia for export THE RULES The Product Calendar for Canada
Distribution Differences Retail Sales U.S. CANADA Department Stores 18.4% 9.5% Discount Stores 17.2% 17.1% Shoe and Specialty Stores 29.2% 45.5% Sporting Goods Stores 12.1% 14.1% All Others* 23.2% 13.8% Includes www and outlets 100% 100% 7
Footwear EXPORTS to CANADA $140,000,000 $120,000,000 $100,000,000 $80,000,000 $60,000,000 $40,000,000 $20,000,000 $- 2014 2015 2016 2017 2018 A 31% INCREASE OVER 4 YEARS, 8% ANNUALLY 8
What I will show: 1.It Can be done 2.It Must be done 3. What’s important 4.Results matter 9
AN EXAMPLE of WHY EXPORT and WHY CANADA From a small town in DENMARK to the world’s best shoes. 10
❑ Founded in 1963, in Bedebro Denmark. ❑ A NEW UNIQUE Concept ❑ 1978 a decision was made to EXPORT/sell outside of Scandinavia. 11
An Unlikely Combination 12
From one shoe ❑ 1978 a deal is made with BATA/CANADA/USA ❑ Despite several setbacks, by 1982 (4 years), 1 million pr were sold. ❑ Now, 4000 stores globally, $1.6 BILLION in global sales. 13
What’s the Lesson? ❑ A small shoe factory can become a global success. ❑ STAY COMMITTED ❑ UNIQUE, WORLD CLASS PRODUCT IS REQUIRED ❑ Canada is good place to start. ❑ It’s 95% of the same work you’re already doing ❑ Private label can be a route to your own brand ❑ You NEED a local partner . 14
OTHER “LOCAL” INTERNATIONAL BRANDS FRANCE GERMANY ENGLAND CANADA MEXICO USA 15
A BRAND DEVELOPED WITHIN THE TPSA without compromise AUTHENTIC
LISBETH JOE SHOES “The human foot is a masterpiece of engineering and a work of art”. Leonardo da Vinci A thin, flexible sole that allows the feet to feel the ground, move naturally and frees the 200,000 nerves in the foot to connect to the earth and to the brain. A ‘zero -drop' sole, one without a heel lift, allows the feet to distribute weight naturally, not forcing unnatural alignment throughout the rest of the body, especially the pelvis and lower back. A wide toe box that allows the feet to spread naturally freeing the 33 joints making it comfortable to wear all day.
LISBETH JOE SHOES
LISBETH JOE SHOES
THE BAREFOOT MATRIX DRESSY UGLY BEAUTIFUL CASUAL
IT CAN BE DONE IT MUST BE DONE 2 1
CANADA From 1985 to 1995 and Now 1985 169 Shoe Factories 37% of Domestic market GOVERNMENT PROTECTION 1995 ONWARDS +/- 5 SHOE FACTORIES Less than 5% of market 22
THE FACTS FROM CANADA NUMBER of FACTORIES DOMESTIC PRODUCTION 400 $50,000,000 $40,000,000 300 $30,000,000 200 $20,000,000 100 $10,000,000 0 $0 1950 1985 2013 1950 1985 2013 Imports $200,000,000 $150,000,000 $100,000,000 $50,000,000 $0 1950 1985 2013 23
WHY NOW? +18% or about 5 % per year Footwear Imports $1,000,000,000 $900,000,000 $800,000,000 $700,000,000 $600,000,000 $500,000,000 $400,000,000 $300,000,000 $200,000,000 $100,000,000 $- 2011 2012 2013 2014 2015 24
+33% over 6 years, WHY NOW? almost 7% per year Footwear Exports $6,000,000,000 $5,000,000,000 $4,000,000,000 $3,000,000,000 $2,000,000,000 $1,000,000,000 $- 2011 2012 2013 2014 2015 2016 2017 25
WHY TPSA? WHY NOW? IMPORTS UP +/- 5 % per year EXPORTS UP +/- 7% per year How much did your business grow in the last 5 years? 26
IT CAN BE DONE IT MUST BE DONE IMPORTS UP 5% PER YEAR WHAT’S IMPORTANT 27
28 What’s important about your PRODUCT 28
What’s important about your PRODUCT • WHAT YOUR CUSTOMERS WANT TO BUY • FEATURE RICH • SUSTAINABLE 29
Any shoe at any PRICE? 30
PRICE IS ONLY 1 COMPONENT • COMMUNICATION • SPEED • THE IDEAL CLIENT ONLY 100% PERFECT QUALITY IS ACCEPTABLE 31
The 4 Components of COSTING Global Prices Raw material Wages/Benefits Labour What about efficiency? Lexus or Kia? Overhead Profit
My COSTING/PRICING Experience • PRICES MUST BE BASED ON • REAL COSTS • AND, THE DESIRE TO SELL 33
PRICING DIFFERENCES Description Domestic sale Export sale Production cost $15 $15 Marketing $1.50 $0 Commissions $2.00 $0 Markup $2 $1 Price $21/$23 $16 PPN $2 $0 34
HOW every $1 becomes $6 DOMESTIC EXPORT Selling Price $23 $16 Plus FOB $0.50 $0.50 FOB $23.50 $16.50 Canadian $ (1.34) $31.50 $22.10 Ocean Freight $1 $1 Duty (18%) $5.67 $3.98 Insurance/Misc (1%) $0.32 $0.22 LANDED COST $38.49 $27.30 Importers markup (40%) $64.15 $45.50 Retail markup (2.8) $180 $127 EXPLOSION ALMOST 6X 35
The Natural Evolution of Producers #1 Own Local Big label brands BRANDS The Contractor 36
The Natural Evolution of Producers #2 Local BIG Brands OWN BRANDS OWN BRAND AND OWN BRAND Building BRAND BRAND The MARKETING MODEL
The best things about EXPORTS AND THE TPSA • CASH PAYMENT • BIG(ger) ORDERS • INTERNATIONAL EXPOSURE • IMPROVED PRODUCT • COUNTER ATTACK Against IMPORTS 38
IT CAN BE DONE IT MUST BE DONE IMPORTS up 5% per year Marketing and the WHAT’s IMPORTANT RULES RESULTS MATTER 39
CHOOSE YOUR IDEAL CLIENT COUNTRY POPULATION CONSUMPTION Per person INDONESIA 248,000,000 540,000,000 2 European Union 500,000,000 2,100,000,000 4 United States 315,000,000 2,300,000,000 7 CANADA 35,000,000 160,000,000 5 4 0
ALWAYS BE SELLING, ALWAYS BE LISTENING • You sell your product in a competitive market. • You must have a compelling, unique product, no matter where you are. • Your export customers will improve your product. • Compete with your product, design, speed, service, NOT PRICE 41
THE RESULTS FACTORY “A”. TOTAL BUSINESS DOUBLED IN THE LAST YEARS AND THEY WANT TO CONTINUE TO SHOW IN LAS VEGAS FACTORY “B”. INITIATED A TOTAL QUALITY CONTROL INITIATIVE RESULTING IN MUCH IMPROVED EFFICIENCY, WORKER SATISFACTION. THEY ALSO DEVELOPED WATERPROOF LEATHER BOOT, AS WELL AS VERY COOL STREET FASHION. AND THEY WANT TO CONTINUE TO SHOW IN THE U.S. MARKET.
THE RESULTS FACTORY “C”. DOUBLED PRODUCTION CAPACITY SINCE THE TPSA STARTED. BRAND GROWTH IS UP 20% FROM 2017 TO 2018. ONLINE SALES ARE GROWING EXPONENTIALLY MONTH TO MONTH. “ADAPT TO MARKET NEEDS NOT OUR PERSONAL PREFERENCES.”
THE RESULTS FROM 45 SHOES FACTORIES, 5 WERE SELECTED, CONFORMING TO THE 80/20 RULE SUCCESS BY ANY DEFINITION IS PROPORTIONAL TO HARD WORK AND COOPERATION
IT CAN BE DONE IT MUST BE DONE IMPORTS UP 5% PER YEAR WHAT’s IMPORTANT Marketing and the RULES RESULTS MATTER HARD WORK=RESULTS 45
THE RESULTS A NICHE BRAND EXCLUSIVE DISTRIBUTION CLASSIC STYLING
THE RESULTS A NICHE BRAND EXCLUSIVE DISTRIBUTION FEATURE RICH
THE RESULTS A NICHE BRAND EXCLUSIVE DISTRIBUTION FEATURE RICH
The Review THIS IS A MARKETING WORLD THE MATRIX AND THE IDEAL CLIENT FREQUENCY AND REACH WOM “ADAPT TO THE MARKET” Answer all emails the same day 4 9
The Review THE DOUBLE APOCALYPSE AUTHENTICITY SUSTAINABLITY FAIR TRADE 80/20 AND THE BLACK SWAN ACTIVE LISTENING Answer all emails the same day 50
The Review BIGGER IS NOT BETTER Answer all emails the same day 51
The Review FASTER IS BETTER NICHE IS BETTER SPECIAL IS BETTER CUSTOM IS BETTER Answer all emails the same day 52
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