Global Trade Today sat down with CabinZero founder and CEO Neil Varden, who turned an idea germinating since his post-university travels into a thriving, King’s-Award winning business exporting to over 50 markets.
He told us about how he first began importing goods with zero trade experience, went about finding the right factory to bring his product ideas to life and had navigated recent trade challenges posed by the EU and US.
Origins
Prior to launching CabinZero, Varden experimented with import-led businesses, moving travel-related products, such as maps, TSA locks and luggage scales from Asian manufacturing sites to other markets.
The experience was a useful learning curve, as he notes that beforehand, he “just didn't know anything about imports”.
“It's one of those areas that you never think about unless you actually try and do it.”
He credits a particularly helpful freight forwarder that he found through the Yellow Pages for encouraging him to persevere. A testament to the value of finding the right customs partners, he says that she worked with “really, really helped me”.
“If I hadn't met her, I might not have started importing them actually.”
Finding the right manufacturer
He’d gotten to grips with importing and finding the right market for travel products, but bringing his own product to life was a different challenge.
Inspired by his post-university travels in India, Varden knew he wanted to create small, stylish, travel-optimised backpacks, but wasn’t entirely sure where to begin.
“I didn’t know anything about how to make backpacks and it’s much more complicated than you’d think”, he says.
“In the end I did manage to launch in 2012 and found a good factory.”
Asked what budding entrepreneurs with a product idea they’re keen to realise should consider when choosing an overseas factory, Varden highlights communication, payment terms and product quality.
If you’re an English-speaker only, being able to discuss your product with English-speaking staff is important.
Being able to review existing samples of the factory’s output, preferably in-person, is also vital. Regardless of how good the quality is, evidence that the factory can produce high-quality goods similar to your own design is essential.
“You have to consider whether they’re making more simple or more complicated goods than your own.
“Too far one way or the other, and they’re probably not the right fit.”
Seeking “generous payment terms”, especially when you’re starting out, is also a good idea. Varden explains that this can often just be down to hitting it off with the factory owner.
He recalls working with a Canadian-run factory early on and benefiting because the owner was an avid royalist.
“The founder was a big fan of the royal family – he fought in the Canadian army and he had this photo of him meeting Queen Elizabeth.”
“So he was really happy to work with me and have really good payment terms”, he adds. “So, I’ve just stuck to those ever since, when I go to a new factory, I use my payment terms.”
Widespread export markets
Varden has grown the business to over 50 export markets, across Europe, Asia and North America, exporting via a mixture of wholesale distributors and director Business-to-customer sales conducted via e-commerce. Both channels come with drawbacks and benefits, he says.
He appreciates that e-commerce enabled the company to continuing selling during the pandemic, when wholesale retail sales predictably took a significant hit. E-commerce currently reflect between 25 and 30% of sales, but Varden has ambitions to reach 50%.
“The direct relationship with the customer is very rewarding,” he says, “because we get direct customer feedback”.
Wholesale offers broad reach within a single market and can open a lot of doors when when you find a loyal partner “willing to work hard for you”, but Varden cautions businesses against “growing haphazardly” via wholesale – this raises potential overlapping customer bases among wholesalers can lead to price competition.
3PLs and tariff challenges
Third-party logistics (3PL) operators have also been integral to overcoming customs challenges in certain key markets, such as the US.
The company’s first attempt at entering the US was waylaid by the pandemic, and a second has been hindered as a result of Trump’s tariff regime.
Uncertainty as much as the additional cost contributed to the challenges, leading the company to pull back on marketing during the initial return.
“It was difficult because no one knew what was going on… I don't think he knew what was going on,” he jokes.
Once there was an end to the shifting tariff figures quotes, Varden resumed the relaunch, and CabinZero now imports into the US exclusively via e-commerce, using a 3PL and shipping directly from its Asian manufacturers.
While impressed with the pace at which tariff refunds have been rolled out, Varden is not certain whether the company will be reimbursed by its 3PL, seeing as its only importers of record that receive the tariff refund.
GPSR
Although he’s amassed plenty on international trade experience, there are still customs changes that have presented challenges for CabinZero.
The greatest of these in recent times was the EU’s General Product Safety Regulation. Brussels seemed to “introduce those rules with no one in the world knowing about them”, he jokes.
The regulations places additional responsibilities on producers placing goods on the EU market to provide clear health and safety information, plus contact details, on labelling and websites.
Varden says that, although sourcing the necessary safety evidence wasn’t challenging as a compliance-focused firm, there was a pervasive lack of awareness among businesses about the requirements and implementation.
“There was no warning, no alert, and no one knew about it. Even the big brands [being manufactured in the same factories as us], they were having exactly the same conversations.”
CabinZero had all the necessary safety certificates in place, but updating labelling in time for the deadline proved more challenging.
“We know every supplier of every part of our backpacks and everything is already EU- and US-compliant”, he explains, “but labelling was a challenge because we suddenly had to label all these products we’ve already made”.
He says that he would appreciate better communication from the EU in future, with thought given to channels that would reach external companies.
Chartered Institute business membership
Varden credits the Chartered Institute for supporting more junior staff to keep in the know about key trade issues.
He directs them to the organisation’s international trade helpline with major trade queries, which he says helps the team quickly resolve customs queries.
“If there need to ask someone, it makes sense that it’s experts rather than me.
“I also thought it could help too, in terms of their development.”
To learn more about business membership and how it could benefit your company, click here to explore the Chartered Institute's business membership packages.
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