National Post Toronto, Canada,
7 January 2008,
By Nathan Vanderklippe
VANCOUVER -All Chris Gattey wanted was something heavy so his hockey-playing teenage son could bulk up to advance his game. What he ended up with was a tour through China's industrial heartland and cast-in-iron proof that, if they are smart, even the tiniest of Canadian businesses can leverage Asia's manufacturing might into profits that would otherwise have been impossible.
Mr. Gattey's voyage across the Pacific Ocean began three years ago, when he found a personal trainer for his son who happened to be a certified kettlebells instructor.
By North American standards, kettlebells are odd-looking weights: Picture a cannon ball with a massive iron ear, or handle, on top.
The fact that a kettlebell swings when you lift it makes it a great training device, because it works out entire muscle sets, unlike traditional dumbbells and barbells that concentrate the effort on individual muscles.
They have been around in some form or another for millennia; in history as counterweights on yokes, more recently as the weight of choice for Russia's late 19th-century circus strongmen and Cold War special forces.
But there was one major barrier to their adoption in modern North America: cost. Mr. Gattey had to shell out $200 for a single 12-kg kettlebell from a California-based distributor.
With a day job as a consultant who manages major projects such as the construction of new lumber mills, Mr. Gattey knew a thing or two about building and figured he could make kettlebells -- which, to his knowledge, are not patented -- himself. He hired someone to design a pattern, took it to a local foundry, and made his first order.
His company, Canadian Kettlebells, was in business and he began shipping product from his home in Port Coquitlam, a Vancouver suburb.
But to his annoyance, he found the price kept rising with subsequent orders. Not only that, but the kettlebells were incomplete: He had to finish and paint them himself. It was a lot of work and "it became rather ridiculous because there was no margin. I was really just trading dollars," he said.
As he grew increasingly frustrated, an e-mail popped into his mailbox one day from a man in China who identified himself as Jesse and offered to make his kettlebells for less. Skeptical, he at first ignored it, but eventually decided Jesse might be worth a try.
They wrote back and forth for several months, before Mr. Gattey turned to his wife and said, "It's time to burn some Aeroplan points. We're going to China."
"I decided before I send any real money to China and watch it disappear, I'm going to go meet this guy," he said.
He was shocked to find that Jesse's foundry, located on the coast between Beijing and Shanghai (he won't say more for fear his competitors will follow him there), was something out of the Industrial Revolution. Men used sticks to manually pour pots of molten iron.
Language was an issue, too, since Mr. Gattey didn't want to shell out for an interpreter.
Jesse could write English capably enough; his spoken English was far less capable. But Mr. Gattey managed to draw enough diagrams and stutter his way through enough phrasebook Mandarin to make himself understood. When Jesse made a prototype kettle-bell, Mr. Gattey tested it by dropping it. It didn't break. Satisfied, he placed his first order for two tonnes of kettlebells.
"Six weeks later, they arrived in Canada. I opened them up, looked at them and it was like God looking at life and saying, 'That's good.' "
Not only were the Chinese-made kettlebells less than half the price of the Canadian ones, they came finished and ready to deliver. He dropped his prices by 30% and "and built in enough margin that there are opportunities for me to wholesale to others who then have margin in it at retail," he said.
In his first two years, he sold about six tonnes of kettlebells. In the year since the Chinese deliveries started, he has sold 30 tonnes, and the kettlebells are starting to attract some high-profile admirers, including Ultimate Fighting Championship upstart Jason Mac-Donald, who plans to install them in a new mixed martial-arts gym he is building in Red Deer.
He's hardly the only small business discovering the profits that can come from extending a backyard business across the planet. Last month, a Hangzhou, China-based company called Alibaba.com launched the second-largest public offering of an Internet company in history -- second only to Google. On its first day of trading, it soared to a market value of US$26-billion.
Alibaba offers a service for entrepreneurs not lucky enough to have a Chinese contract land in their inbox. It lists tens of thousands of small Asian manufacturers of everything from ladies' briefs to fluorine refrigerant, and provides a point-and-click system for contacting them.
Alibaba founder Jack Ma has said Chinese small-and medium-sized companies "are the future, the next wave of China's growth."
All of which is good news for small businesses.
"You don't just have to be a huge multinational to be doing business with China," said Carla Kearns, a Toronto-based China consultant. "China is affecting how business is done at all levels."
But Canadians have by and large been late to the party.
"This is a real problem," said Bonnie Rich, chief executive of The Canadian/China Business Investment Group, a small Canadian company that works out of Beijing to link Canadian businesses with Chinese firms. "Canadians should be here taking advantage. This is the time to be doing it, and I'm shocked that we're not."
Ms. Rich warns that using a service such as Alibaba isn't enough. Even the smallest businesses need to travel to China before signing a deal, she said.
"The Chinese always work based on relationships, even for small things. So either you have to have someone here with the relationship or you have to create the relationship yourself," she said.
That may cost money, but as Mr. Gattey proved, the savings are often great enough that it makes financial sense. His Chinese experience has been so positive he is now wondering whether his kettlebells will develop into more than a sideline.
