At a glance
By Aimee Chanthadavong
Rhino-Rack is one of Australia’s family business success stories.
It started in Western Australia 25 years ago with a memorable name, but now its roof racks and outdoor equipment can be purchased not only in Australia but in 50 other countries, including the US.
Rhino-Rack owner Richard Cropley decided to test the water in the US, back in 2009.
“It was a big decision for Richard,” says Tony Leix, vice president of Rhino-Rack USA. As he explains, the timing wasn’t ideal.
“The US economy was in a recession and unemployment was getting rather high. It was rough going for the first couple of years here,” he says.
It was, however, a huge opportunity for the Australian brand.
There was a potentially lucrative market of 300 million people in the US for Rhino-Rack’s pre-assembled racks. The average US household also owned nearly two vehicles “plus a couple of bikes or kayaks in the garage”, Leix explains.
The move has paid off. In eight years, the business has gained a strong foothold in the US.
Rhino-Rack USA now has a production, sales and marketing team of 15, based in Aurora, Colorado.
While the US business ran at a loss early on, in the past four years there has been solid year-on-year revenue growth of about 40 per cent.
Customer service and competitive pricing are the key drivers of the company’s success, says Leix. They are “critical to a grassroots movement” as the company competes against what Leix calls the “Coca-Cola and Pepsi” of the outdoor equipment market in the US – Thule and Yakima.
Some 65 per cent of Rhino-Racks’ US sales are online.
Its bestsellers are cross bars – basic roof racks for sedans and sports utility vehicles – and pad-and-clamp systems.
Leix says this online success is no surprise, given its e-commerce partners include digital retail giant Amazon, plus the top players in the online outdoor equipment retail market – AutoAnything and eTrailer.com.
Most online orders are drop-shipped; that is, sent directly to customers from the Rhino-Rack warehouse.
“The e-commerce or dotcom retailers don’t even touch the stock,” says Leix.
While this online success is welcome, the aim now is to expand Rhino-Rack’s presence in bricks-and-mortar stores in the US.
At the end of 2016, Rhino-Rack strengthened its position with some key alliances. It made a distribution deal with Meyer Distributing, now Rhino-Rack’s main wholesale distributor in the US, which delivers daily to more than 20,000 bricks-and-mortar accounts from nine distribution centres.
This is a big improvement from the early days when wholesale distributors were not prepared to take much stock from the unknown Australian brand, Leix says.
Rhino-Rack has also established partnerships with ride-sharing service uberSKI in Colorado, Utah, Wyoming and Nevada, providing racks for vehicles to carry skis and snowboards.
It has another deal with UnderCover Inc, which sells hard tonneau covers accessorised with Rhino-Rack products to carry bikes and other recreational gear.
“These are really cool and exciting accounts, and we hope to continue these partnerships for years to come,” Leix says.
One piece of advice
“If you’re looking to expand into an overseas market,” says Tony Leix, “spend time understanding the market and the different types of selling avenues – e-commerce, wholesale distributors, bricks-and-mortar and hybrid accounts.”