Visigoth will be concentrating on servicing just two types of clients, the gift shops of Leavenworth, Washington, and the farmers of the Puget Consumers Co-op. For both market segments, we have secured exclusive contracts or endorsements that put us in a unique position to service these niche firms and their more demanding needs.
Profitability in these two markets is expected to be excellent, especially in the import segment as Leavenworth draws in over a million tourists each year. We expect profitability in the co-op end to be much slower in the first five years of operation, but will increase steadily.
Visigoth intends to be a small import/export company focused on clients serving a niche market. Having secured a very advantageous contract with PCC and gained the endorsement of the Leavenworth city council, we plan to focus exclusively on these market segments. Both have such high potential that we do not see a need to expand our market reach for the foreseeable future.
Leavenworth sits in one of the most beautiful areas of Washington State. The area was settled in the 1860's, but it wasn't until the end of the century that the town began to blossom with the arrival of the rail line. The Great Northern Railway Company's tracks through Leavenworth brought with them opportunities for work, commerce and a new economy. However, when the Great Northern Railway Company pulled out of Leavenworth, the town was converted from a bustling, thriving hub of commerce into a hollow, empty community. For more than thirty years, Leavenworth lived on the brink of extinction. But in the early 1960's, everything changed.
In a last-chance effort to turn their precarious situation around, the leaders of the community decided to change Leavenworth's appearance, hoping to bring tourism into the area. Using the beautiful backdrop of the surrounding Alpine hills to their advantage, the town agreed to remodel their hamlet in the form of a Bavarian village. The entire community rallied to create the illusion of Bavaria in the middle of Washington state. Besides the complete renovation of the downtown area, community members worked to begin a series of festivals. The Autumn Leaf Festival, Maifest and the extremely popular Christmas Lighting Ceremony were the first of many attractions Leavenworth offered to tourists. Since the change to a Bavarian motif, Leavenworth has become a pillar of the tourism industry in the Pacific Northwest. Today, more than a million tourists come to Leavenworth yearly, each visitor finding their own love affair with the community.
The town brings in an average 24 million dollars in revenue each year, and since much of the town's profits are based on the sale of alpine and Scandinavian gifts, the opportunity for a company such as Visigoth is almost unmatched. In 2002 a town meeting of the principal shop owners in Leavenworth was held concerning the present contracts with the community's main importer, Deutsche Gifts. The previously good relations between the community and the import firm had soured due to rising costs and unreliable service. The result of the meeting was to look for another importer better able to meet the local needs once the current contract expired. Mr. Frank Curtiss successfully bid for the contract, and the idea of Visigoth was born.
Visigoth has made arrangements to export produce from member farms established by the Puget Consumers Co-op Farmland Fund. The Fund works to secure and preserve threatened farmland in Washington State and move it into organic production. The Fund's primary focus is on large, functional landscapes of local, regional and statewide importance so protection can be extended to biodiversity and wildlife habitat as well as to farmers and farming communities. The Fund is an independent, community-supported non-profit land trust founded in 1999. The Fund has already rescued a half dozen farms within the state and plans to increase these projects so that by 2007 there will be at least 36 farms that come under the fund's protection. In addition, approximately 60 farms belonging to the Co-op have expressed interest in contracting with Visigoth.
Competition includes all potential importing firms that serve small enterprises such as farms and specialty gift shops. Practically speaking, this means the largest import/export firms such as Fisher-Mills, Eagle Distributing, and other large, nationwide companies will not compete with us. Most other companies tend to be regionally focused. The foreign trade industry is highly fragmented, with a large number of small companies that mainly cater to small firms and a few large companies that seek the largest contracts from companies such as Microsoft, GM, etc. This makes competition within the industry very intense. Through our niche strategy we intend to avoid competition and its drawbacks such as price wars, etc.
Buying patterns and needs
Companies usually enter into contracts with import/export firms based on a firm's reputation for professionalism and service. With no proven track record, a star-up import/export company obtains a "good reputation" through its personnel, people who have experience in other businesses in the industry. Price, reliability and scope are the driving factors for accepting contracts, especially if the import/export company is small.
Our niche clients have different needs than most other firms. Our import clients need to have relatively small numbers of expensive and fragile products moved from Europe to local warehouses in Wenatchee and Leavenworth. Most of these items are handmade so handling is a special issue. In addition, the small companies and shops in Leavenworth depend a great deal on their import agents to alert them to new and unique product introductions overseas.
On the other end, the farms belonging to the PCC need to keep export costs as low as possible since many of them are start-up ventures with initially high overhead. Quite a few trade firms do not accept these types of contracts and leave it to the co-ops to create their own exporting ventures. This can lead to higher costs as most co-ops do not have the core competencies in import/export issues.