For five years, Dana Nelson distributed one of Canada's hottest footwear lines: Bogs.
Sales of the pricey – and trendy – print-covered neoprene boots more than doubled every year, eventually accounting for half the revenue of his Montreal-based In-Sport Fashions. Then he lost it all last year after the footwear's U.S. owner, Combs Co., sold out. New owner Weyco Group handles its own distribution in Canada and it didn't require Mr. Nelson's services as an outside agent.
He took the news in stride. As a middleman, he had no choice. "I am always aware that a change could be just around the corner," said the CEO of privately held In-Sport.
Distribution can be a hazardous business and success can be a curse, particularly when manufacturers sell to consolidators who handle their own distribution, leaving the middleman out in the cold. "Distributors shouldn't tie themselves to one particular product line, because it could end up killing their business," said Karen Fischer, a small-business consultant based in the Greater Toronto Area. "Good distributors are always looking around. They know their customers well and know what they're missing."
When Mr. Nelson lost Bogs, he knew what to do. In the past, when he lost brands such as The North Face, he found other up-and-coming products to distribute. But this time he decided to try something else: If he couldn't peddle Bogs, he would sell his own line of print-covered, fashionable, three-season neoprene boots. They looked like Bogs, but they improved on the features customers didn't like.
"We said, 'There's a gap in the market,'" Mr. Nelson explained. "If you go to a kids' shoe store, you see Sorel boots and three (rival lines) that look like Sorel. But when you get into neoprene, the competition is only inexpensive copies (at mass merchants). There's no other brand that is neoprene and sits on the shelf (next to Bogs)."
Mr. Nelson's Tram line was born. In the past two months, the boots have been shipped to 100 stores across Canada. Mr. Nelson anticipates Tram's volume this season will be 15 per cent of his Bogs sales last year, when he distributed them to 750 stores. "I don't mind scaling back. There are benefits in the long run. We need to walk before we run."
He's also distributing three new lines, including Toni Sailer Sports skiwear, but If Tram succeeds, he plans to expand it internationally.
Like Bogs, Tram is sourced from China and made of seven-millimetre-thick neoprene, an insulated rubber polymer that keeps feet dry and warm. Where Bogs have holes up the side that act as handles, they also let in slush and deep snow, so Tram moved the handles higher up on the boot and fortified them with moulded rubber. "The handle makes it stand out," said Marisa Pampena, a senior buyer with Browns Shoes, which is stocking Tram boots.
Other notable differences include a black cap that covers the toe and a fortified bottom that helps prevent the prints from rubbing off. Most importantly, said Mr. Nelson, he wanted "something more urban-looking ... I was trying to get something more fashionable" with a thinner sole. "For us, it's all about the fashion."
It's also about salesmanship. The success of Bogs in Canada is a testament to marketing as much as it is to the product itself. While Bogs in the United States was initially aimed at agricultural and industrial users, Mr. Nelson pitched Bogs to specialty shoe-stores here as snazzy high-end boots for kids and mothers. He used social media-savvy "mommy bloggers" and in-store marketing to get the word out.
"(In-Sport) would always say 'You need more fashion,'" said Bill Combs, the Oregon entrepreneur who created Bogs in 2002 and now works for Weyco. "They probably did a better job of selling into fashion stores than we did."
The different approaches meant more than 90 per cent of Bogs in Canada are sold in fashion footwear stores, while farm and industrial buyers count for half of U.S. sales.
Mr. Nelson's reputation also helped when he started Tram. "As a retailer I felt compelled to support my distributor who helped me grow my business," said Eva Cooper, owner of two Delilah fashion apparel stores in the Ottawa-Gatineau area that have just switched from Bogs to Tram. It also helped that "they had something in my view that was a better product," she added.
Rob Krantzberg, owner of a Kiddie Kobbler children's shoe store in Ottawa, initially ordered 150 pairs of Trams for the fall (compared with 1,500 pairs of Bogs). He quickly sold 100 pairs of Trams and ordered 100 more. "I was confident immediately the quality would be the same as Bogs and I think it will retail well to women," he said.
Both Mr. Nelson and Mr. Combs say there are no hard feelings over their split – and now rivalry. "It's no big deal, we have bigger fish to fry," Mr. Combs said.
Weyco is starting to push Bogs in Canada to industrial users and to make technological changes to improve the product's moisture and odor-elimination properties. It is forecasting sales of more than 200,000 pairs of Bogs in Canada this year.
Mr. Nelson, meanwhile, is sticking to his marketing game plan to attract the mothers who made Bogs such a success in Canada. He's not aiming to go head-to-head with Bogs, but "I think that's what will happen. Most independent footwear stores are not growing. If we are growing, that business is coming from somewhere else."