PROUDLY MADE IN CANADA
NAFTA compliance helps PowerStick.com sell its corporate-branded gadgets
In southwest Ottawa, dozens of hands deftly work in concert to assemble devices branded with some of the biggest names in the technology, automotive and financial industries. Some even bear the logo of the U.S. army Special Forces.
These devices are examples of what PowerStick.com chief executive Nigel Harris calls “hot little item(s)” that helped take his company from an Ottawa suburb to doing business with some of the biggest corporations in the world.
PowerStick.com develops and brands proprietary tech gadgets and has counted Tesla, Ford, Google and Bank of America as clients, to name a few. Items they’ve developed in-house include portable USB chargers, hard drives with streaming capabilities and Bluetooth tracking devices.
“In Canada we’re friendly, we have a patent on the technology; we tick all the boxes,” Harris says as to why multi-billion dollar corporations have come to trust PowerStick.com.
He also mentions that a few Consumer Electronic Show awards for their devices and working with the U.S. military didn’t hurt.
The U.S. military — with a mandate that its portable chargers cannot be purchased from Chinese producers — was a perfect fit for PowerStick.com, and therefore ended up as one of its most important clients, at least in terms of perception.
“Our mantra became … if it’s good enough for the U.S. military Special Forces, it’s good enough for corporations,” he says.
Being NAFTA compliant was also “a huge deal” in helping PowerStick.com become one of the goto providers of corporate-branded gadgets. With the “bragging rights” gained from working with the armed forces and the benefits of NAFTA, PowerStick.com was then able to score other larger clients as time went on. Most of its products are still being assembled by hand on-site in Ottawa.
“You can give us a call at nine o’clock, we’ll put 100 (devices) together, we’ll brand them, we’ll package them, and we’ll have them out on the one o’clock bus,” Harris said, describing the process. The “bus” is actually a FedEx truck, and packages are typically delivered the next day or two.
Canadian production also helped boost the perception of reliability when compared with products manufactured in, for instance, China. But that doesn’t mean he eschews the Far East.
While the vast majority of PowerStick’s creations are made in Ottawa, some are produced in China. Typically, these are its lower-budget items, at about the $10 to $15 mark.
PowerStick initially hired Canadian companies to manufacture these items, and while they were high-quality goods, the numbers side simply didn’t make sense. The manufacturing alone was about US$9 per item, not factoring in the price for components. In China, that same product costs about US$1 to produce.
John Zhu is head engineer at PowerStick.com and helped organize the company’s Chinese production.
“At the time, we had no idea how we were going to open up Chinese production,” Zhu says with a laugh.
But he knew the lay of the land, having emigrated from China roughly 20 years ago.
Through a trusted vendor, he was introduced to Fusheng Li, a retired engineer and former senior vicepresident for a conductor company. Zhu came to trust Li, and after a few meetings, hired him to be country manager.
“He’s a godsend,” Harris says, describing how much Li smoothed the process of overseas production. The gadgets are designed in Canada and sent to Li, who manages their manufacture.
“If we were to do production in Canada, it would make my life much easier,” Zhu says. “They are all professional, they are pretty good in quality control. In China, you pay less but you need to keep your eyes on them. I won’t say all the time, but usually I check every other day — if not every day.”
Li echoes Zhu’s sentiments, saying that cultural differences and uncertain trust can present themselves as barriers.
“Gaining trust is a very slow process,” Li writes in a translated email. The ability to keep in constant contact helps mitigate many of these issues, but they never fully disappear, he says.
Canadian companies without the right personnel would have difficulty establishing Chinese production contacts, Zhu adds.
“They probably need to have someone like me here,” he says, “who can speak Mandarin and understand the culture over there. It’s all about communication.”
But Harris says it is vital most of his products are assembled in Canada. In this highly competitive market, with a glut of Chinese counterfeit media players and portable chargers, having a Canadian label helps assure clients that PowerStick.com produces quality products, he says.
Such government incentives as the Scientific Research and Experimental Development Tax Incentive Program, which helps fund the research and development of their creations, make it even more appealing to work from Ottawa. Harris highly recommends taking advantage of the incentive, even if it does mean a little more scrutiny at tax time (PowerStick.com has been audited three times since signing up).
Between the trusted brand, the government incentives and the quality advantage, for Harris, there’s a lot to love about the Made in Canada label.
In Canada we’re friendly, we have a patent on the technology; we tick all the boxes.