By Neil Cotiaux
When Nicole and Boyd Johnson flew to Europe this summer to discuss plans for their first business office there, they were all-in about growing Boyd Cycling’s presence on the continent.
Being all-in, though, didn’t mean all at once.
After nearly a decade in business, the Johnsons — both competitive racers — felt the time was right to capitalize on the positive reception that their performance-based bicycle wheels have received in Europe, where enthusiasm for cycling remains at fever pitch.
For 10 days in July, the Johnsons hopped around the Netherlands, meeting with a logistics expert at the U.S. embassy in The Hague and then driving to Amsterdam to meet with an attorney experienced in tax and other offshore issues. The couple also participated in a German trade show, Eurobike, their fourth appearance there.
But Boyd Cycling is taking a cautious approach to establishing a permanent presence in Europe, deciding to use a third-party logistics firm before creating a wholly owned subsidiary in Maastricht, a gateway to German and Belgian markets.
“We’re going to get to a certain revenue level before we actually have a physical Boyd headquarters office,” Nicole Johnson said, by taking European orders on their website while the logistics firm shepherds their product through customs and delivers it to customers.
Rather than overloading the European market with product, the Johnsons will at first “put 10 there, sell 10; put 20 there, sell 20” as a way to limit both risk and debt, according to Nicole, who serves as Boyd Cycling’s sales director.
The Taiwan connection
While Boyd Cycling focuses on design and assembly work in Greenville, the Johnsons will continue to use a factory in Taiwan for manufacturing due to a scarcity of bike-part manufacturers in the U.S., Nicole said.
“We will ship directly from Taiwan; we’ll have to. … For us to import everything here and then export it out (to Europe), we’ll be killed” as a result of transit time and tariff and nontariff issues, she said. For future Europe-bound bikes, assembly will now occur in either Taiwan or on the continent.
Boyd Johnson still travels to Taiwan about five times a year to monitor production quality.
Before the Johnsons could sell overseas, they needed to get on firm ground domestically, so they sought assistance from a variety of Upstate resources.
Beth Smith, area manager of the Spartanburg Area Small Business Development Center, said the “deliberate, incremental” approach the couple is taking in pursuit of export sales reflects their overall approach to growth.
Smith, who has counseled the Johnsons on everything from intellectual property to funding to international markets, also helped them regroup as they pruned the number of bike-related products they offered in their early years in order to focus on high-quality, brand-recognizable wheels.
“Once we did that, things started coming together and we doubled in size,” Nicole Johnson said.
By selling to individual cyclists on the internet without undercutting the bike shops they sold to, Boyd Cycling developed two revenue streams that gave it the financial stability needed to explore overseas markets.
Last year, Nicole said, Boyd Cycling grew 25 percent in a down market by continuing to supply nearly 300 U.S. bike shops while many of its competitors pedaled away from them.
Along the way, the company, which employs seven to nine full-time employees depending on the season, has tapped into a variety of funding and technical resources such as the Michelin Development program, Appalachian Development Group, South Carolina Research Authority, and NEXT.
Smith put the Johnsons in contact with the International Trade Association, a division of the U.S. Commerce Department that extends help to fledgling exporters, including an online assessment that allows companies to determine their readiness.
Target-market research is also available from a number of sources including ITA and the University of South Carolina’s Moore School of Business, Smith said.
The Johnsons also utilized the ITA’s Gold Key program, which arranged appointments with 15 prospective distributors and agents at Eurobike.
“They will directly reach out to these people and find out the level of interest,” Nicole said. The service, which cost the Johnsons $750, “was worth every penny.”
At a more recent trade show, Nicole said, she and Boyd realized “the biggest thing is to have a service center there and inventory in-country,” which prompted the couple to make their July trip to the Netherlands.
Smith thinks the Johnsons’ plan for an eventual subsidiary on the continent makes sense.
“They are still small enough that controlling their own personnel makes sense to me. Number two, Boyd has experience riding in Europe and he’s got a good name,” the SBDC consultant said.
Beyond the Netherlands, Germany, and Belgium, “his product should do very, very well” in Eastern Europe, she added.
The company already exports to Canada, Australia, Asia, South America, the Caribbean, and parts of Europe including Switzerland and the United Kingdom.
Staying the course
Boyd Cycling’s cautious approach to exporting shows a resolve to capitalize on overseas markets, said Marek Gootman, director of strategic partnerships and global initiatives at the Brookings Metropolitan Policy Program, who spoke at a recent global connections forum in Greenville.
Talent, capital, and leadership commitment are the top three factors in whether a company exports or not, he said.
“The deliberateness … in many of these firms is missing,” Gootman said, with 40 percent of middle-market companies making at least one export sale one year and none the next.
At Boyd Cycling, they’re all-in about exports, but careful.
“You can’t take your eye off the ball,” Nicole Johnson said.
Why Maastricht makes sense
Maastricht is a city in the southeast of the Netherlands. It offers several key benefits to manufacturers:
- Next-day deliveries possible in Germany, Belgium, and France
- Lower shipping costs for international deliveries when using a distributor just across the border in the buyer’s country
- Easy access to nearby European depots of UPS, FedEx, DHL, and other couriers for e-commerce shipments
- Access to multiple airports
- Close proximity to the seaports of Antwerp and Rotterdam, with cargo moving directly to Maastricht by road, rail, or water
- A multilingual city where English, Dutch, French, and German are commonly spoken
Source: Marcel Schulze, founding member, European-American Chamber of Commerce, Amsterdam