From furniture to food, wholesale import businesses are on an upward trend.
From plush, leather Chesterfield sofas to marble coffee tables framed with brushed stainless steel, wholesale furniture company Hawthorne has managed to strike a pleasant middle ground between classical and modern.
“Contemporary but timeless” is how Julian Frizzell, the general manager for the business his parents started back in the 1980s, describes Hawthorne’s look. Today, the company employs 12 staff, importing goods from all around the world and supplying them to local furniture retailers, particularly smaller, independent ones in towns like Cambridge, Palmerston North and Hawkes Bay.
According to Frizzell, business in the last two years has been booming. But it’s not just retailers that are causing the upward spike: as New Zealand experiences an unprecedented housing boom, adjacent industries — like furniture wholesalers — have also been reaping the benefits. Frizzell estimates that approximately 20% of Hawthorne’s business now comes through interior designers who are increasingly being tasked with the job of decking out these new homes.
“The interior designers market has definitely grown in New Zealand. In the last 18 months, it’s just gone crazy. [I think because] people like to think they’re buying the right thing, to have that reassurance. They might pay a few thousand dollars to an interior designer to help them style their home and buy furniture through them.”
Also making the most of selling premium goods from overseas is Cook & Nelson, which was founded by husband-and-wife pairing Nick Brown and Becs Caughey a little over three years ago. But instead of chairs, tables and wooden cabinets, Cook & Nelson sell artisan foods: ‘handcrafted tonic’, ‘bloody mary pickles’, ‘barrel-aged shoyu’ and ‘bourbon jam’, among other products.
Like Hawthorne, there’s an appetite (literally) for what Cook & Nelson has to offer. Several of its brands, like McClure’s and Seedlip, have experienced huge waves of popularity since arriving in New Zealand. McClure’s, for example, has made a name for itself for being the go-to choice of craft pickle for Burger Burger, Miss Moonshines and Federal Deli, while Seedlip — the world’s first ever non-alcoholic distilled spirit — sold out within a week of being stocked on Kiwi shelves.
Brown says a large part of what makes Cook & Nelson successful is the fact that it’s able to be in several parts of the food market at once. For example, its twofold business model of both wholesale and retail means that success with one translates to promoting the other. “Maybe if they try something at Burger Burger and they really like it, they can go to their local New World and have a crack at it themselves,” says Brown.
If Hawthorne and Cook & Nelson’s experiences are anything to go by, New Zealand’s wholesale industry seems to be doing a pretty good job of not just keeping afloat, but making the most of a strong current in their direction. But don’t just take their word for it — the numbers clearly speak for themselves. According to Stats NZ, total wholesale trade sales value has gone up for the last 10 consecutive quarters (the last time that figure experienced a drop was back in March 2016).
Adam Day, commercial banking manager at Kiwibank, speculates there are a variety of reasons for greater confidence among consumers: an increase in GDP, low-interest rates, and a rise in the minimum wage. “I think all of those together, they start to give it a little more confidence that you can go out and get that new sofa or splash out on some nice food,” he says. “There’s a lot of downbeat news about the economy lately: falling property prices, low business confidence, a lot of global tension. But actually, the average person still seems to be putting their hands in their pocket and buying products for their houses and buying [premium] food.”
That’s not to say it’s all plain sailing. The biggest challenge for wholesale businesses has to do with managing cash flow, especially if they’re importing large quantities of expensive products. This is where the bank comes in — they’re the ones that can lend big sums of money — because it can be weeks, even months before a wholesaler can actually sell a product its paid for. With Hawthorne for example, there can be up to a six-month gap between when they order a piece of furniture (and have to start paying for it) and when they actually start getting some cash coming in for that product.
“The challenge for them is really making sure that their margins stack up,” says Day. “[At Kiwibank] we have the ability to finance the products from when they’re purchased to when they arrive in New Zealand. We can also offer the foreign exchange risk management, so making sure they’re not taking too much risk with the exchange rate, and then when it arrives in the country, we can finance the time frame between when they sell the product and when they get paid for the product by their customers.”
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However, these sorts of challenges are nothing new — they’re part and parcel of how the wholesale business works. Ultimately, things are looking up for the industry, particularly when it comes to premium goods.
“Wholesaling and importing are probably going to grow,” says Day. “There’s so much product outside of New Zealand and there’s such a demand now that’s getting bigger and bigger. The market is probably going to change again very soon.”
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