Bagging New Sales

After researching the idea and developing prototypes Belinda launched Envirosax in 2004. Her bags were different to other reusable shopping bags on the market: they could be rolled up to easily fit into handbags and featured colourful, fashionable prints. She says: "When I first started, I thought it would be great to sell a few bags - I never thought I'd be selling bags to a few states let alone countries."

But getting started was no cake walk. After knocking on the doors of some of Australia's biggest retailers - and getting knockbacks each time - Belinda didn't give up. She decided to try her luck overseas. "I needed a large order to get me started; if I got that, I could fund the production of more bags."

Belinda consulted with Austrade, who assist businesses seeking to export through the a new exporter development grant, and in 2004 attended the CTGA trade show in Toronto, Canada. A distributor showed interest and Envirosax received its first order - for 12,000 bags. Belinda says: "Canada is a country with good green credentials; it was a good place to start. My distributor took the ball and ran with it."

The Challenge

Launching a customised corporate division of Envirosax.

The Solution

During its first year of operation several large retailers in the United States approached Envirosax about creating corporate versions of its bags. Customising the bags was not in the start-up business plan and Belinda said no. "I was adamant that we couldn't do it. The whole idea was that the bags are a fashion statement; I didn't want to go down the corporate logo track."

By 2008, Envirosax had been in business for three years and competitors had emerged. Meanwhile, businesses were still asking for branded bags, which meant it was time to change tack. Belinda and her team started to look at how it might be done with Envirosax flair. "We spent six months working on designs, spec sheets and costings. That's one of the joys of being a small company; we can put something into place fast."

In August 2008 Envirosax launched a corporate division with a range of bags targeted at businesses and organisations. But was it the right time to enter the corporate market? Belinda says: "Just when we were ready to launch, the media started reporting on the global financial crisis and everything came to a standstill."

Envirosax had already hired four new staff and renovated office space in its San Diego warehouse to accommodate the new division. But fear mongering about the global economic crisis killed off any promised leads. Belinda says: "We didn't take it as a blow; we just moved to Plan B."

Envirosax's main business was still growing and Belinda knew Envirosax needed to act in order to make the corporate division viable. The company took three major steps to resolve the problem:

1. Cut costs - Marketing costs were scaled back and corporate division staff were transferred into the main business. Belinda says: "We moved staff but ensured we kept enough resources to keep the corporate division going."
   
   
2. Retraining - The corporate division's idle customer service staff - hired to handle all those enquiries that weren't coming - were sent on sales courses and their roles changed to hunting out new business. Belinda says: "We had to show businesses how to utilise the bag as a promotional branding tool. Yes, alternative promotional bags might only cost a quarter of an Envirosax bag but they tend to be throw-away items that are also environmentally inferior. With us, branding exposure continues for more than five years."
   
   
3. Cost shifting - The growing Envirosax business was buoyant enough to absorb the running costs of the corporate division. Belinda says: "We were confident that the corporate division would eventually succeed and have invested in it. It absorbed up to 19% of our total running costs at one point while contributing only 1-2% of revenue."
   
   

The ordering system for corporate orders has also been rejigged. Belinda says: "Clients who had expressed interest in larger orders could no longer afford them. We amended the fabric of one of our bags to cater for smaller print runs. Instead of ordering 1000 bags, people could now get as few as 200."

The Result

In the last quarter of 2008 Envirosax received its first order of 10,000 corporate bags from the Harvard School of Law. Belinda says: "The team targeted high-profile organisations in the US. We knew if we could get the high-fliers then others would come." Since then there have been orders from The Clinton Global Initiative, Neiman Marcus and Berlin-based high-profile department store Galeries Lafayette.

Belinda says: "We went from no one wanting to know about us to those three sales within weeks. When these big organisations came on board in the current financial climate it was enough to instil confidence in others. Neiman Marcus ordered a pouch pack of three bags that was used as a free gift when spending a large amount in-store - they sold out in less than ten days."

The Envirosax corporate division is on track to have paid back the debt to the retail business and be self-sufficient by the end of 2009.

Envirosax was a finalist in the Emerging Exporter Awards in the Premier of Queensland Export Awards in 2007 and 2008.

Since 2004 Envirosax's turnover has increased by 700% annually. Belinda says: "The small price point has helped our market; we're still employing staff."

Plans are underway to move from using fulfilment warehouses to Envirosax-operated warehouses in Berlin and Toronto. Belinda says: "You wouldn't believe how proud I am of everyone here. The team are passionate and we didn't need to teach them that."

Belinda's husband Mark David-Tooze quit his teaching job in 2007 to join the business as Manager of Operations, Worldwide. Now when the children's school schedules permit, overseas business travel has become a family affair. All travel and many other business processes, follow eco-friendly principles outlined in the company's Ethical Business Policy.

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