The Benefits to the Participants An improved understanding of ALL - PowerPoint PPT Presentation

Workshop for SMEs on Exporting Footwear Products to Canada WHY EXPORT? WHY EXPORT TO CANADA ? Phil Zwibel Trans Luxury Hotel, Bandung, 3 April 2017 Mercantile Athletic Club, Jakarta, 10 April 2017 In Partnership with: Workshop Delivered by: Project Executed by: 1

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 2

Footwear EXPORTS to CANADA Canadian Imports 2011-15 Waterproof Footwear 19267% Plastic footwear 206% Leather footwear 154% Textile Footwear 414% Footwear Nes 67% Sub-total 225% $110,000,000 footwear export sales to Canada 3

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% 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

What I will show: 1.It Can be done 2.It Must be done 3. What’s important 4.WHY CANADA? 6

AN EXAMPLE of WHY EXPORT and WHY CANADA From a small town in DENMARK to the world’s best shoes. 7

An example  Founded in 1963, in Bedebro Denmark.  A NEW UNIQUE Concept  1978 a decision was made to EXPORT/sell outside of Scandinavia. 8

An Unlikely Combination 9

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, $1.4 BILLION in global sales. 10

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 . 11

OTHER “LOCAL” INTERNATIONAL BRANDS FRANCE GERMANY ENGLAND CANADA MEXICO USA 12

IT CAN BE DONE IT MUST BE DONE 13

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 14

THE FACTS FROM CANADA NUMBER of FACTORIES DOMESTIC PRODUCTION 350 $50,000,000 300 $40,000,000 250 $30,000,000 200 150 $20,000,000 100 $10,000,000 50 0 $0 1950 1985 2013 1950 1985 2013 Imports $180,000,000 $160,000,000 $140,000,000 $120,000,000 $100,000,000 $80,000,000 $60,000,000 $40,000,000 $20,000,000 $0 1950 1985 2013 15

WHY NOW? INDONESIAN EXPORTS GROWTH OF FOOTWEAR EXPORTS Footwear exports Leather Footwear Rubber Footwear 0% 200% 400% 600% 800% 1000% Did your business DOUBLE in the last 5 years? 16

WHY NOW? PLUS the Smuggling !!! 5 YEAR GROWTH IN FOOTWEAR IMPORTS Uppers Textile Footwear Leather Footwear Plastic Footwear Rubber Footwear 0% 100% 200% 300% 400% 500% 600% 700% How much did your business grow in the last 5 years? 17

WHY NOW? FOOTWEAR IMPORTS $350,130,000 280% increase over 5 years $125,368,000 2010 2015 How much did your business grow in the last 5 years? 18

IT CAN BE DONE IT MUST BE DONE WHAT’S IMPORTANT IMPORTS +280% in 5 years 19

20 What’s important about your PRODUCT 20

Sales, are you a maker or a seller ? • Sales are sales • Domestic sales are close • Export sales are far away. • ALL EXPORT Sales have the same requirements 21

Any shoe at any PRICE? 22

Any shoe at any PRICE? WHILE PRICE IS IMPORTANT, Your product must be  UNIQUE  of the best quality  Offering shorter lead times  Lower production minimums  WORLD CLASS SERVICE 23

NILUH DJELANTIK • ORIGINAL and PERSONALIZED • STRONG, COMFORTABLE AND BEAUTIFUL • high-profile clients • Made by a SHOE-LOVER herself • NILUH works with a TEAM of 30 WORKERS, sells in 20 COUNTRIES 24

My COSTING/PRICING Experience • PRICES MUST BE BASED ON • REAL COSTS • AND, THE DESIRE TO SELL 25

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 GST $2 $0 26

HOW every $1 becomes $6 DOMESTIC EXPORT Selling Price $23 $16 Plus FOB $0.50 $0.50 FOB $23.50 $16.50 Canadian $ (1.33) $31.25 $21.95 Ocean Freight $1 $1 Duty (18%) $5.62 $3.95 Insurance/Misc (1%) $0.31 $0.22 LANDED COST $38.18 $27.12 Importers markup (40%) $53.45 $38 Retail markup (2.5) $135 $95 EXPLOSION ALMOST 6X 27

The Natural Evolution of Producers Contractor for small companies. Some sales of your 1. own label. (NOT BRAND) Your own label is growing, contracting for bigger 2. companies and real brands Contracting for national and international brands, 3. Your label is now a BRAND, and you are exporting. Making 100% of your own brand. 4. MARKETING YOUR BRAND GLOBALLY. 5. 28

The Product • 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 29

The best things about EXPORTS • CASH PAYMENT • BIG(ger) ORDERS • INTERNATIONAL NAME • IMPROVED PRODUCT • COUNTER ATTACK Against IMPORTS 30

IT CAN BE DONE IMPORTS +280% in 5 years IT MUST BE DONE The 7 P’s WHAT’s IMPORTANT WHY CANADA 31

Why Canada? 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 32

ADVANTAGES  THIS PROJECT  SANDALS  YOUR OFF SEASON, IS CANADA’S HIGH SEASON  95% imported  45% of market is Specialty stores  Small scale factories/small scale market  2 cities account for 90% of purchases  VERY OFTEN IS THE DOOR TO THE US MARKET 33

IT CAN BE DONE IMPORTS +280% in 5 years IT MUST BE DONE The 7 P’s WHAT’s IMPORTANT WHY CANADA 34

The Review Always be selling if you always want to be producing Identify and Satisfy Do you have the customer you want?, if not, change what you’re doing and selling Remember and use the 80/20 rule. EVERYDAY SANDALS NEED BUCKLES OR THEY WONT FIT WELL Be BOLD, and INNOVATIVE ACT NOW Answer all emails the same day 35

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FOR FURTHER INFORMATION, PLEASE CONTACT THE PROJECT OFFICE IN JAKARTA, INDONESIA: CANADA-INDONESIA TRADE AND PRIVATE SECTOR ASSISTANCE PROJECT (TPSA) CANADA CENTRE, WORLD TRADE CENTRE 5, 15TH FLOOR JL. JEND. SUDIRMAN KAV 29-31 JAKARTA 12190, INDONESIA PHONE +62 21 5296 0376, 5296 0389 FAX +62 21 5296 0389 37