From basement workshop to factory floor in Vietnam
Local entrepreneur believes relationship building is key to success
When Reid Hemsing caught his first glimpse of the Vietnamese factory floor, he was impressed.
The luggage and technical bag factory, one hour’s drive outside of Ho Chi Minh City, was massive.
“You could park a 747 in there no problem,” Hemsing said.
Everyone wore colour-coded uniforms and the workers were “all smiley.” It was a far cry from riveting bags in his basement.
Hemsing makes garment panniers for professionals who want to bike to work and still look polished in the office. His oneman business, Two Wheel Gear, had secured an initial 100-unit purchase order from Mountain Equipment Co-op.
“I was worried not only about making (enough bags) by hand, but how they would look on the shelf next to all these polished international products,” he said. So he asked MEC for an introduction to one of their vetted, ethical manufacturers.
He then took MEC’s suggestion to a business mentor, who advised him to physically visit the factory and establish a personal relationship. Hemsing bit the bullet and bought a plane ticket.
And so it was that he ended up in Vietnam, a long way from where he began.
Hemsing had started working with the bag’s original inventors as part of a university business club project, but ended up taking over the business in 2012.
“It was really small, a homemade type of product, not that elegant looking, but it worked really well,” said Hemsing, who has a commerce degree and had worked as a commercial account manager.
A local company sewed the bag’s soft shell, but Hemsing had to source hardware, rivet the bags together by hand and assemble the bike rack attachments.
In 2014, he plunged full-time into building the business. He got the bag into a handful of small independent retail stores. Then came his big break. He caught the MEC cycling product manager’s attention. MEC wanted a solution for business bike commuters and liked Hemsing’s pannier approach over a backpack.
“At the beginning, he just decided to keep in touch and wanted to see new products,” Hemsing said. “After the fourth or fifth meeting, he said he was going to try out our garment pannier in some of the biggest bike cities.”
He must have done his homework on industry margins really well. MEC accepted his wholesale pricing and set a retail price of $209.
MEC’s purchase order spurred him to seek more professional production.
Going to Vietnam turned out to be a boon in more ways than one. From the moment he touched the tarmac, the learning came fast and furious.
“Everybody has these grand illusions that you take a product and you build it overseas and you just totally cut your costs completely,” Hemsing said.
“I was probably the youngest and one of the lowest spending customers that’s ever showed up at their factory,” said Hemsing, 29, but the factory was willing to start with a 300-unit minimum order. Staff offered him many patterning and fabric suggestions.
He soon learned taking the trip had been good advice. “That face-to-face interaction, going there and working with them and going for those dinners and stuff, that’s how they associate you with being professional and serious about working together.”
They told him he’d been using a flame retardant fabric that is banned in many European markets and recommended a more environmentally friendly waterproof coating that was even less expensive. Glueing reflective materials by heat transfer rather than sewing them led to a more polished end product.
“It was a huge leap forward in our capabilities,” Hemsing said. With funding and mentorship from Futurpreneur ($15,000) and BDC ($70,000), Hemsing ended up ordering 600 units.
That’s when he learned firsthand about import duties, taxes and shipping costs. He also discovered that everything shuts down for two weeks in Hong Kong’s ports around Chinese New Year. His product was delayed again due to port strikes in the U.S., and a chemical fire in Vancouver’s port.
“And as a first-time shipper bringing product in from another country, of course customs seized my product and took it off site for a couple of weeks to inspect everything in the container, which caused further delays. And also they charge you for off-site storage cost of that container and their services and time inspecting that container.”
Logistics has been the biggest learning curve.
“I learned that you need to provide a buffer zone and you need to plan way more in advance than you think. … It’s not like you can just pull up to MEC’s warehouse with a truck full of product and expect to be able to drop it off. You have to use one of their preferred carriers.”
The novice entrepreneur didn’t try to negotiate fees.
“I didn’t really feel like I was in a super strong place to negotiate with them. It was a real opportunity to get to work with them at the stage I’m at,” but talked about the volume needed to start reducing costs.
As it turned out, the product costs are “pretty much the same as when I made it myself but 10 times the quality” and the product comes finished, tagged and ready to sell.
Hemsing ended up delivering product to MEC almost two months late. MEC placed product in five stores — Vancouver, Calgary, Ottawa, Montreal and Toronto. He’s starting to learn how variables such as weather affect product sales. Product at MEC’s Calgary store has sold particularly well and has been restocked twice. “One of my favourite stats is out of nearly 350 or 400 bags sold this year, we’ve only seen one return bag.”
He’s now working hard to market his product, showing up at Bike to Work Week events and biking festivals.
He believes relationship building was key to getting the trial purchase order with MEC.
“I am not someone who will over-promise. I’ve always approached every single partner, from the graphic designer to MEC, with a very straightforward approach.”
Hemsing now has his sights set on securing some U.S. retailers. He will be showing an expanded pannier line and introducing a convertible backpack/pannier at a major cycling trade show in a couple of weeks.