Each week, we seek out expert advice to help a small or medium-sized firm overcome a key issue.
A former professional snowboarder, Max Jenke is gearing up for the biggest ride of his life. Mr. Jenke, president and creative director of Vancouver-based Endeavor Design Inc., wants to launch three winter sports brands in the United States.
But he will have to work hard to succeed where other Canadian companies have failed. The United States is the world’s biggest and most dangerous market for his company, he says.
Mr. Jenke co-founded Endeavor Snowboards in 2002. Close to prime snowboarding terrain that includes the Whistler Blackcomb ski resort, the company designs boards at its Archetype lab and manufactures them in Asia.
In 2006, Endeavor signed a global licensing deal with Airhole Facemasks Inc., a Vancouver maker of ventilated masks for the slopes. This January, it announced a similar North American partnership with the Swedish clothier Colour Wear, whose offerings include snowboarding pants and jackets.
Endeavor, which has eight full-time employees and doesn’t release revenue numbers, sells snowboards and face masks in some 34 countries, from Australia to Japan. Airhole provides its only U.S. business; after the 2008 financial crisis, Endeavor pulled its snowboards out of the country.
But now the company is ready to tackle the U.S. again. “We think that having Endeavor and Colour Wear and Airhole, it’s an extremely strong package,” one that would appeal to sales representatives and customers, says Mr. Jenke.
In September, Endeavor began preparing for the 2014 winter season by holding pitch meetings with U.S. reps. Those sales agencies will give retailers a preview of the new product lines in December. Everything wraps up at January’s SnowSports Industries America Snow Show in Denver, when final orders are placed. “You pretty much have about six weeks of selling to get it all in, and that’s it,” Mr. Jenke says.
In the United States, ski and snowboard products typically go on sale after Black Friday in late November, Mr. Jenke says, and the selling season is short. But that’s just one of his worries about America.
It often takes 180 days to collect accounts receivable from U.S. stores, compared with 90 in Canada, Mr. Jenke says. Retail prices are lower, he notes; a snowboard that costs $450 here would typically be priced at $350 there. Mr. Jenke is also wary of runaway marketing expenses. “That’s the biggest downfall of the brands that are non-U.S.,” he says. “They go down and they feel like they need to spend so much money.”
Endeavor has girded for battle by redesigning its boards so they cost a bit less all-round. The company also plans to focus on specialty retailers first, to build credibility with big-box stores. “If we want to go to that market, we have to play the game,” Mr. Jenke says. “We just play the game smarter.”
THE CHALLENGE: How can Endeavor Design establish a beachhead for its three brands in the United States?
THE EXPERTS WEIGH IN
Richard Powers, sports marketing expert and senior lecturer, faculty-at-large, Rotman School of Management, University of Toronto
They’ve got to create the market. When there’s so much competition out there, an agency is going to be reluctant to take on someone new unless they know they can sell it. And so there has to be a demand for it, and the only way they create demand is to become visible.
They have to have some of the top U.S. athletes at competitions like the X Games using their equipment and clothing. The equipment is the main thing because it’ll drive the other stuff. It’s a Nike-Tiger Woods type of thing: When Tiger Woods starts using Nike clubs, everybody starts using Nike clubs.
They’re going into the U.S. market, but they’re going with three different brands. If the company is Endeavor, then it should be Endeavor Clothing, the Endeavor Airhole. It’s hard enough establishing one new brand in that market.
If someone went to the Endeavor site they’re not going to see anything about the Airhole, they’re not going to see anything about clothing. Every time they advertise, they’ve got to split it three ways. Why wouldn’t you drive everybody to one site?
Brad Gobdel, action sports sales representative and president, Gobdel Productions Inc., Denver.
The thing about Endeavor that is great is they make a very good product. They make a unique, art-driven and very detail-driven snowboard, which I think is often overlooked. Especially in the U.S. market, there’s a lot of commoditization.
When you get up into areas like Lake Tahoe, Nev., where people live in the resorts and are really passionate about the sport and are seeking out new and better products and are more knowledgeable, that’s where niche brands, Endeavor included, could do really well. I think it’s going to be hard for Endeavor to march into an area like Southern California or even the Denver market, which is a broader, more mainstream audience.
Selling all three brands to sales reps is definitely the right approach. If I’m a retailer, I want to be talking to one person about everything that comes out of the Endeavor building. They’re going to need probably six to eight representatives throughout the country to help spread the brand in each area.
Their Archetype [lab] is one of the most spotless I’ve ever seen. That’s something they could play up a little more – “Hey, we’re snowboarders. We build amazing snowboards and we test them in some of the best conditions in the world right here in our backyard.” I think that’s really strong, because not everyone does it.
Elana Rosenfeld, co-founder and CEO, Kicking Horse Coffee, Invermere, B.C.
On the financial side, they have to ensure their accounts receivable from the States, notify their bank of terms they’re getting and ensure their line of credit can manage that. They should negotiate better terms than 180 days; they can push back and play a little harder, even though it’s the U.S. and that might be the market standard. It’s not really fair, but it seems to be a trend in the States, making your supplier carry your credit.
The U.S. is so massive that I think of it as different countries and different regions. Attack one region at a time. Unless you’ve got a massive budget, you can never focus that widespread. Concentrate on a specific region and do it really well. In that region, pick where the most likely connect is and the retailers that are going to be great partners and help build the brand with you, and focus on those top three retailers.
THREE THINGS THE COMPANY CAN DO NOW
Unify its brands
Selling all three under the Endeavor name on a single website is more economical and delivers a clear brand message.
Focus on specific regions
Improve your odds of success by identifying areas of the U.S. where consumers want niche snowboard products.
Play up your uniqueness
Make sure sales reps know that unlike your rivals, you design snowboards minutes from the topnotch terrain you test them on.
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Interviews have been edited and condensed.