Here’s the next episode in the Stevie Marx interviews. He’s a Melbourne entrepeneur and uni student selling fun umbrellas (and more)…
André: How has expansion into overseas markets made your business more complex?
Steven: The US market is a complex but lucrative market that can really bring any brand to a completely new level. Australian retailers have anywhere between 100 to 400 stores (with the major supermarkets having around 700-750 stores), in the States the smaller chains have around 500 and the ‘big guys’ have up to 4,000.
Most wholesalers in Australia have a hard time keeping up with the strict guidelines and demands of a national retailer here, but in the US the already complex nature of any deal is taken to the extreme. Things like things that are pretty basic here in Australia such as promotions, ordering, rebates, insurances etc. are much more thought-out and planned for. Luckily the team I am working with in the USA have an exceptional record and are really professional people. For example, I have found that my presentations to national retailers have improved probably by 40 or 50% just from working with them and developing the absolute best presentation possible so as to attract attention.
André: Do you find your products needed adaptation for different consumer tastes? If so, did this impose unexpected costs?
Steven: I have already noticed a difference in designs that are liked and ones that are not as well received by the buyers and ‘reps’ in the USA. I have my own personal opinion of just about every design ever been produced by Stevie Marx (and there are a lot of them), and I have normally found that my opinion has been matched by their performance in stores. There have been some designs I would put in my less preferred range that have I have received feedback from the States that I would never have imagined, like “the best design they have seen in years”. It is really interesting to see how some patterns and colours are more favourable in different retail atmospheres.
There is no doubt that the USA expansion has been an additional cost to the business due to the amount of work that was done on samples and presentations. At one stage we were creating over 700 samples to be sent to the USA of about 20 different umbrellas and 5 different gumboots and raincoats. Getting each individual made for the first time was extremely expensive (with the opening of moulds and the purchasing of small amounts of fabric for samples).
André: I note you still haven’t got the online store up and running? Does this reflect a shift in your perceptions of the value of e-commerce?
Steven: Yes, your right. On www.steviemarx.com we have yet to open an online store. Initially this was postponed due to the global financial crisis. We thought it was not worth the risk of developing at this stage. It has been something we’re hoping to do sometime before the winter season of 2010.
To some extent it does reflect our perception of the value of e-commerce. Umbrellas are really an impulse buy item, when you see it in a store and you think “hey that looks cool!” you might buy it. I am unsure of the amount of people that would go online to buy an umbrella from an online store. I definitely believe the Australian market has not yet fully embraced the e-commerce market as much as a market like the USA.
I must admit this has been one of the most difficult “to do or not to do “parts of the business. I have changed my mind about it numerous times. Business is all about generating income; non-income producing work is the last thing any company wants. An online store would take a certain amount of time and it could very easily become non-income producing work.
What do the readers think about the online store aspect?
Update: Part 3 is now posted here.