Importers pursue different paths to growth
By Thomas Russell -- Furniture Today, March 7, 2004
When it comes to the furniture import business, most companies have similar goals.
Success depends on offering good product at good prices and with good service. And of course, making money doing it.
But while they have similar goals, importers have chosen different paths to get there.
Below is a look at some of the strategies and ways of doing business that a handful of importers believe have helped them achieve success.
Solid-wood focus
A-America, a 30-year-old case goods importer, has succeeded through one simple strategy — staying focused on solid-wood collections.
Look at the company's products, and you won't find metal and glass, leather or youth collections. It even avoids what it considers lower-end veneer products.
Instead, it focuses on solid-wood bedroom, dining room, casual dining and entertainment collections. Typically, these products sport mid-to-upper-middle-end looks at low-to-mid-level price points.
A-America got its start in the early 1970s by importing antique reproductions and nostalgia oak furniture from Taiwan. From there, it began importing furniture from China and other Asian countries, growing steadily into other case goods categories.
"Our focus has been on casual dining, solid wood and solid-wood collections," said Dave Pinamonti, senior vice president of marketing and sales. "Those are categories we are known for and have expertise in. We think there are great opportunities there, and we don't want to spread ourselves too thin. It could have been easy for us to chase some of those (other) opportunities, but we feel we have a full-time job focusing on what we know best."
Another key part of the company's strategy is to develop strong relationships with its factories and a solid team of people in sales, product development, marketing, sourcing and distribution. It also has employees instead of agents working in its source countries and factories.
Container flexibility
As the name implies, case goods importer Containers 2 Go focuses on direct-container shipments. In fact, 100% of its product is shipped direct from Asia.
"I think we're ahead of the curve in terms of being able to mix a lot of product on the container," said Matthew Baerg, president. "That differentiates us from everybody else, and it is still our edge."
Such distribution allowed the company, which is about seven years old, to attract new accounts fairly quickly and make importing a viable option for a variety of dealers. It also has allowed it to focus on a niche market of smaller, family-owned businesses.
Containers 2 Go also sells to some Top 100 accounts, but finds its mixed, direct-container approach allows the smaller dealer more flexibility and less risk in getting popular overseas products.
"We had great success in the beginning in terms of selling people that have never imported before," Baerg recalled, noting that the company gained about 100 accounts in its first three years. "Most of those retailers were single or two-store, family-owned businesses."
He said the company's sales have reached a plateau since then, a factor that has allowed it to focus more on improving service and relationships and keeping customers happy as it boosts its profitability.
"In the beginning, there was pressure to get sales to a certain level and to get the company to where we wanted it to be," Baerg said. "Now we don't have to worry about that. Now it's about enjoying our jobs and enjoying our relationships."
Hands-on approach
Jack DeBonis of Global Furniture knows that importing, as much as any other production-oriented business, requires a hands-on approach. That's one reason the CEO and president of this 14-year-old case goods importer has spent a lot of time over the years forming relationships and putting the right people in place to see that the job gets done.
He has made 18 trips overseas in the past 20 months, mostly to sourcing operations in Indonesia and north China. While he has quality control people in those locations, he believes it helps to have top executives there, too, making sure that the product meets market standards.
"The most important thing to our success is a hands-on approach overseas, making trips and not relying on others to get quality standards and finish applications," said DeBonis, who always reviews first cuttings of case goods.
"It requires a real commitment. The old model of trying to find an agent and running your business from here and relying on overseas manufacturing without engagement is not practical."
Such attention helps reduce or eliminate errors in production. At the same time, those visits also accomplish another key goal — establishing relationships with key sources over time. The better understanding that they have of expectations, the easier it is to get the job done right, said DeBonis.
Changing with the market
Just before starting Leather Italia, a leather upholstery import company, nearly 10 years ago, Michael Campbell admits he was frustrated with his former employer's reluctance to change in such a changing marketplace.
"They were not willing to change and reflect price points coming in from other importers," he said.
For Campbell, change meant making leather sofas, which were wholesaling between $1,700 and $2,200 in the late 1980s, more affordable. Today, his company sells them between $799 and $1,295 retail.
But Leather Italia's strategy is not just about lower prices. It's also about providing what Campbell believes are some of the best raw materials in the market. He also believes it's important to educate retailers about the product so they, in turn, can educate the consumer.
"It's understanding the raw material not only from the finished side of the goods, but understanding it from the very beginning and capitalizing on the best price points," he said.
Apparently this focus is paying off. The company shipped $26 million in product in 2003, up from $14 million in 2002. This year, it expects to ship $39 million.
Campbell attributes that success to his company's ability to communicate effectively the quality it hopes to achieve with both its overseas sourcing partners and its retail dealer base.
"Once they understand and participate in that same vision, you have success," he said.
Establishing deep roots
Importing is not a new business for Universal, one of the true pioneers in sourcing wood furniture from the Far East. Before being purchased by Lacquer Craft in mid-2001, it had already sourced from factories in Malaysia, Taiwan, Indonesia and China. That gave the case goods importer a strong foothold and also a high comfort level in its dealings overseas.
Today the company imports exclusively from China. But despite that shift to one major source country, the company clearly has developed strong relationships. It currently ships about 10,600 containers a year, a number that could rise to as many as 12,600 in 2004.
For Harvey Dondero, Universal's president since May 1999, that comfort level is a key to its current success in China.
"If the attitude of people like ourselves is appreciative of what other people are doing, it's easy to establish relationships," said Dondero, who has about 30 years experience in the import business.
"I think you have to understand and appreciate their culture. You can't be the ugly American. You have to be a student of their culture."
At the same time, it also helps that many of the businesspeople that Universal works with communicate in English.
Through that mutual respect and ability to communicate, Universal has developed and sold a wide range of case goods and styles suited to the U.S. marketplace. Through mostly container-direct shipments, its brand reaches many distribution points, including department stores, discounter stores, single market and multi-market furniture stores, home accent stores and warehouse clubs.
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