Why Vivere took a consumer-first path to global expansion

Hammock supplier caters to end-users

 
A Vivera Brazilian double hammock
(Vivere)

In late 2011, Jason Stoter, founder of the hammock supplier Vivere Ltd., was preparing to “jump into the U.S. with both feet,” as he puts it. The Guelph, Ont.-based firm, then in its seventh year, had just rebranded and figured it would try a soft, late-in-the-season launch, with the more determined push to follow during the next year.

As Stoter readied the company, he discovered something extremely important about the world of retail ecommerce, especially as it has evolved in the U.S. With online retailing growing almost exponentially, ecommerce-only sites, which carry no inventory, were scrambling to add content to their product offerings.

The merchandise managers didn’t need to be persuaded, recalls Stoter. “Earlier, with bricks and mortar stores, you had to convince the buyers. Now, it’s the consumer deciding which type of hammock they’ll buy, not a buyer.”

Stoter concedes that the new rules of the retail road can make or break a firm like his. But Vivere’s products connected with American consumers, especially the market segment of homeowners building or expanding patios and outdoor rooms. He soon established relationships with the giants—Amazon, Walmart—and then repeated the whole cycle in Europe, where he launched earlier this year.

In fact, Stoter, says, his experience with Amazon Europe matched his reception with American ecommerce sites two years before. Amazon’s European buyers looked at how Vivere’s line did with Amazon U.S. and then placed an order. “There was no effort.” He had the same experience with Amazon’s Japanese arm.

Stoter, whose firm is ranked 27th on the 2014 PROFIT 500, is almost certainly making the company’s export forays sound easier than they actually were. But his laid-back approach certainly reflects the company he founded a decade ago on the strength of a $20 purchase on a beach in Mexico.

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As the story goes, Stoter, then finishing an MBA and looking to establish his own business, was vacationing in Mexico and a man approached him with an offer to buy a hand-woven string hammock. The man asked $60 and Stoter bargained him down, although his friends ribbed him that he ended up paying too much.

That $20 hammock, which Stoter still has, turned out to be an outstanding investment.

Two years later, as he was thinking about how to sell hammocks in Canada, he met an Australian tourist, again in Mexico, who convinced him to import a container of hammocks from Brazil and sell them in Canada. Stoter figured it might be a good business venture and he scrounged up the $60,000 he needed to buy a 20-foot container with 5,000 hammocks. He didn’t have customers but, as he concedes, he had lots of incentive to move the inventory. “People told me I was crazy.”

They didn’t exactly fly out of his garage. “It took me two-and-a-half years to sell that first container,” Stoter says, noting that he generated just $21,000.

Dubbing his company Hammock Village, Stoter’s first significant customer was Home Hardware, and Stoter decided to focus on the chain quite deliberately. “They’re in every little town. I thought that would be a good starting point.”

He expanded into retailers that sold gardening equipment, gifts, and outdoor patio furniture. But Stoter opted to remain a distributor/wholesaler, bringing hammocks, and later stands, in from manufacturers in Brazil and later China.

With sales doubling each year, Stoter took care to keep expanding his lines and product offerings. He made a point of quizzing his retail customers about what was selling well in his segment, and what else they wanted. “I’m quite an optimist,” he says. When a retail buyer asked him for a new type of hammock, “my answer was always, of course we can [find it].”

By 2009, Stoter felt his firm had reached a crossroads. He reckoned he could either significantly expand his product line by adding items like teak patio chairs or umbrellas, or he could look for new markets outside Canada. “I spent a year wrestling with that.” He decided against expanding into new product categories because he’d end up competing with some very large chains, like Lowe’s or Loblaw.

These days, for Vivere’s large overseas ecommerce customers, Stoter is still a wholesaler, but he says the company will take care of issues like quality control, testing and regulatory issues specific to a certain market. For international chains like Lowe’s, Home Depot and Walmart, Vivere handles the shipping of its containers of hammocks and stands directly from its Chinese producers. That extra responsibility translates into lower margins, but more loyal retail customers.

Indeed, Vivere so far this year has shipped over 120 containers, all of them twice as large as that original ones.

As for Vivere’s international consumers, Stoter says the company’s tactic is to launch with very competitive pricing, offer customer service in the local language, and be especially forgiving when dealing with customer complaints about defects, even very minor or imagined ones. “We need to take care of every single customer,” he says, describing them as “ambassadors” for Vivere’s brand. “We have to go beyond people’s expectations. You can get taken advantage of, but we do it anyway.”

Only after the firm has looked after its new overseas customers is Stoter able to rest easy.

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