Tracking international demand persuaded us to export

Name: Radical Tea Towel
Location: South Wales
Employees: 10
Founded in: 2011
Tip: “Don’t procrastinate with exporting – start selling and see what the reaction is.”

The problem

When the Pearce family couldn’t find the right products to buy as gifts, they set up a business selling politically-inspired homewares. Radical Tea Towel quickly grew a loyal customer base in the UK and before long they started to get US orders.

“In 2016, we sold about £2,000 worth of products to America, which was a small percentage of overall sales,” said co-founder Luke Pearce. “But we realised that people were willing to pay £20 on postage for a £20 item and they would wait four weeks to receive it. This provided proof of a potential export market in the US.”

However, when they looked at manufacturing products in the US, they couldn’t find anyone to make them to the same quality and price.

The solution

Radical Tea Towel set up a dedicated US division as a new UK limited company, allowing the US operation to run as a separate entity. The team also outsourced its warehousing and distribution to a third-party logistics provider. This helped to reduce shipping times and costs for its American customers.

To overcome the challenges with manufacturing, Luke realised they should stick with what they knew and keep manufacturing in the UK. They would just need to figure out how to deal with large amounts of stock in America.

Some additional changes had to be made as part of their export strategy, including a new American website and a fresh look at the products. However, as Luke pointed out, many of the same political messages resonated with both audiences.

The results

Sales in America made up around 20 per cent of the company’s total revenue in 2018. Luke predicts it will exceed 50 per cent in 2019. The aim is to cross the seven-figure sales threshold this year, mostly driven by exports to the US. 

Radical Tea Towel plans to move into new territories in 2020, with Canada first on the list.

“Timing is good – the pound is low at the moment. Arguably there’s never been a better time to make products in the UK and sell to the US.”