After a decades-long military career, Michael Hagen entered the business world when he noticed a gap in backcountry skiing with the lack of reasonably-priced and high-performance lightweight gear. In this episode of Shopify Masters, Michael shares with us how he received the distribution rights to Austrian-made skis from a century-old company and launched Hagan Ski Mountaineering.
For the full transcript of this episode, click here.
Show Notes
- Store: Hagan Ski Mountaineering
- Social Profiles: Facebook, Twitter, Instagram
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Recommendations: CM Commerce (formerly Conversio — Shopify app), Make an Offer (Shopify app), Outdoorly,
Honeycomb Upsell Funnels (Shopify app), Unlimited Bundles & Discounts by Revy (Shopify app)
Pitching expansion plans to a hundred-year-old company
Felix: You saw an opportunity in the ski market. Tell me more about that.
Michael: I was in the army, stationed in Italy, and I went on a ski trip to Austria. I met my wife there and was introduced to Alpine ski touring then. I had done it in the army before, but a military version, not a recreational version. Her family introduced me to the sport, and I loved it. I thought this just doesn't exist or is unknown in the United States, and I saw an opportunity to bring the gear and introduce the sport to the United States. It was here, but it was small. It was much bigger in Europe and I just saw the potential for growth in the United States.
Felix: The Austrian company has been around for a while. Tell us more about the history of it and how you got introduced to the brand.
Michael: It’s an Austrian company, it's been around since 1924. It's the oldest ski company in the world. It's tied with Fischer which also makes Alpine gear and Alpine Skiing Tour. They were both founded in 1924. It was founded by two brothers in a small village. They were wagon wheel makers and after the First World War, the economic situation wasn't too good. The sports cars were coming in and wagon wheel sales were going to be going down, and they skied. They switched from making wagon wheels to making skis out of Ashwood.
Their name was Hager, and they were from the little village called Antiesenhofen, so they combined the first few letters of Hager and the first two of Antiesenhofen and came up with the brand name of Hagan. They've been around since 1924. When I met my wife, her father would test me. He’d said, "Let's go ski." We went driving up to the mountains, parked at a trailhead. He got the gear out of the car.
We, fortunately, had the same size feet, so I used his old hand-me-down gear. He put it on the ground, clipped into his gear, and left. And I'm like, "How's this gear work? How do I get into these bindings?" I had never seen them before they were new at the time, very advanced binding. It took me a few minutes to figure things out and try to catch up with them. It was a little test and the skis that he happened to give me were Hagan skis.
Later on, when I started getting into racing I met a couple of guys on the Austrian national team that was on Hagan skis. One thing led to another and when I moved to the United States, I wanted to get into ski mountaineering racing. I knew Hagan wasn't available in the United States. Instead of being simple and just buying the skis while living in Austria, I actually asked them if they were looking for a US distributor and they said, "Sure." So I became the US distributor.
Felix: How were you able to pitch yourself in a way where you became a US distributor for them?
Michael: It was a simple email. I just wrote to them, told them about my background in military skiing and my wife being Austrian. I had learned about the brand. When I moved back to the United States and was trying to get into the sport, I realized there was a lack of quality and competitively priced gear in the United States. Then I asked if I could be their distributor. They wrote me back and said, "Sure."
It was just as simple as that, an email and they wrote back and said, "Yeah, you can do it." It was pretty interesting because it was entirely based on trust. To this date, we don't have a contract between me and them. They shipped me the first set of gear without me paying an advance, it was just all based on trust.
Felix: Wow. What were the next steps for actually turning this written agreement into a business?
Michael: I started really small and the whole market in the United States was quite small. That was a little over 10 years ago. It's been advancing, the market has been growing amazingly quickly lately. But at the time it was pretty small and it was simply a mere matter of calling up some of the retailers in the United States, I started in Colorado. Visited a few of the ski shops that had it because it's very specialized gear.
Most ski shops don't carry it, they're starting to, but at the time there were maybe six ski shops in Colorado, back then that had the gear. I contacted them. Either via email or visiting and got a few relationships with retailers going.
Felix: When you’re a distributor for a foreign company, you have to purchase your inventory ahead of time. What are the logistics behind that?
Michael: Starting off, I would work with the retailers, get their orders in the late spring or early summer, then try to make an estimate of how much more I might sell directly, which at the time wasn't much. Then send that order to Austria and they would ship me the gear. At the time, it was just skiing. They didn't have bindings or boots, which they do now. Yeah, I would get the gear, it would be shipped air-freight instead of sea freight, so a little bit more expensive. Then I would break it down, sort it out, and send it to the retailers.
Felix: Who assumes the risk in this kind of arrangement?
Michael: That’s me primarily. Austria assumes the risk if I don't pay, but I assume the risk if retailers don't pay me. For instance, if a retailer goes bankrupt, which I had in one case, then I get burned by that retailer. The risk is primarily on the distributor.
Felix: What was the process like setting up retailer relationships in order to actually get your product out into the market?
Michael: It's relatively hard to pitch to new retailers with a brand that is unknown in the United States. It is hard because marketing is pretty key, and brand awareness for expensive gear that's in shops? It’s hard to get retailers to buy in, because they're concerned about their sell-through, and it's easier to sell brands that people know, than a new brand that they're not so familiar with. Some boutique retailers like that. They like to be able to distinguish themselves from bigger retailers. But it’s a tough sell. That’s the biggest obstacle, the name and brand recognition.
"It's easier to sell brands that people know, than a new brand that they're not so familiar with. That's the biggest obstacle, the name and brand recognition."
Going beyond distribution: educating customers and retailers alike
Felix: Was there anything that helped you connect with these retailers, and encourage them to give you a chance?
Michael: Yeah. We had something in common. Backcountry skiing or alpine ski touring for people that don't know, is quite different from downhill skiing, in that you climb up. You climb up with special bindings, special boots that are more mobile, the heel is free, so you can get a walking stride and you have these climbing skins, that help you climb up and then you take them off and ski back down. The downhill part is quite similar to regular ski resort type downhill skiing. But climbing is totally different.
It's a fitness sport, an aerobic sport. Initially, the people that started selling it, are people like me that love the sport. My first retail sales were largely to other people that I met at races, at ski mountaineering races, and they were so into the sport that they started retail shops, and I was so into it that I became a distributor. That's how I would start selling, to a few friends that had started their own stores.
Felix: Once a retailer agrees to carry your product, what role do you play? Is there anything you do to try to help the retailer get the product to market?
Michael: That’s something that I need to be better at, is the help with the sell-through or help with the education on the products. Most retailers are so into the sport, they pretty much know the gear left and right. But when there's a new ski, a new binding, explaining the features to them and explaining how to sell, how to market those features to customers. Tell them what this product does, this ski or this binding or this boot, what its advantages are and how it will help a consumer meet their goals.
Educating the retailers is important and something I haven't done as well as I would like to. I've been doing a lot of that on the Shopify site for direct consumers, trying to have very good explanations of the gear, but that's always something that can be done better. It's time-consuming though, to be contacting and working directly with all the retailers.
Felix: You mentioned the website, when did you decide to also sell directly to consumers on your site?
Michael: Originally, I didn't even have a website. I was bringing in the gear and contacting retailers and selling directly to them and then pretty much literally selling to friends and out of my trunk at ski races. We do the race and then have a beer afterward and people say, "Hey, what kind of gear is that?" "It's a new brand I'm bringing in." And selling a set of skis, maybe in the parking lot after a race.
Then I got a website, a very rudimentary Apple iWeb website with no eCommerce function whatsoever and sales were growing slowly to direct sales. But literally, people would email me and say, "Hey, I'd like to get a set of those skis." And I'd say, "Okay, send me a check." It was so cumbersome and really small. Then the big switch, and when direct sales started increasing I switched to Shopify. Direct to consumer sales have been steadily increasing ever since.
Felix: How does selling directly to consumers affect your relationship with your retailers?
Michael: It is a balance and I think it's a balance for most brands. Any brand that is attempting some direct sales is going to have to navigate how to do so without undermining your retailers. In my case, it's almost required because it's a niche sport and not in that many retailers. Not everybody can find a Hagan gear within 50 or a hundred miles of where they live. Many people have to go online to get it. We're specialized in backcountry skiing.
We're a small company. But we probably have the widest variety of gear of any brand in the world. We have 13 different skis. We have nine different bindings. We have three different poles. All kinds of different gear and not every shop carries it. There may be some ski or some binding that a customer doesn't have anywhere close to them. So the only way I'm going to be able to sell it is by going direct-to-consumer. It's balancing that without undermining the pricing. I have to be really careful about having sales. We have a pricing agreement with retailers on when and how much they can discount it.
A couple of black Fridays ago, I had a 24-hour sale. It was a little bit bigger discount than retailers were supposed to have at the time and I heard back from a retailer that said, "Hey, how come you're having a 15% off sale and we can only have a 10% off sale?" You make mistakes like that along the way and you learn from your mistakes and hope that the mistakes aren't too costly.
Felix: How are you driving traffic and sales to the online store?
Michael: It’s partly because Shopify is definitely helping with search visibility. There are two aspects to it. One, the sport is really growing, just taking off tremendously in the last five years, especially. It's just boomed in the United States and that was that potential that I saw. People tend to say that Europe was 15 or 20 years ahead of the United States and it certainly was. That was the case 10 years ago and now the United States is really growing. Part of my increased sales is simply because the sport has gotten so much bigger in the United States than it was. I would say it's five to 10 times bigger than it was five years ago. It's really grown.
Then the other increase in sales is largely through getting on Shopify and having much more visibility, making it easier for people to review, learn about the products, and easy to order. Having Shopify has really helped with that. On the other hand, what I'm fighting is because the market has really grown, the big companies that were traditional alpine downhill skis have realized that this isn’t a little play thing market anymore. It's becoming substantial.
A lot of the big brands that people would be familiar with got into the market and because of their marketing, it made it much harder for me and retailers. I lost several retailers because they could go with the brand that had million-dollar marketing budgets, and everybody had heard of, because of their alpine skis, they'd seen 3000 sets of them on the chairlift. The market was growing, but the big brands were jumping into it just as fast as it's growing or even faster. So the pie got bigger, but it was getting sliced up pretty thin, and it made it really hard on some specialized brands like Hagan and a few others. Made it pretty tough. We’ve survived and made it through that and are now continuing to grow.
Optimizing your website: content marketing and customer testimonials
Felix: You mentioned educating your customers. How have you gone about trying to educate your prospective consumers?
Michael: A lot of people are quite new to the sport. There are some that have been with it for a long time and know the gear, but I would say because it's growing so rapidly over half the people are first-time buyers of any gear in the sport of ski mountaineering. They have a lot of questions. Having a good product description really helps. I try to write in the product description of who the gear is designed for, what type of skier, how advanced they are, what their goals are. Then the bindings are complicated, so I have some videos on how the bindings operate.
I need to do more of that. That's definitely in the future. to have more videos explaining things. Explanatory and maintenance type of videos. I use the Shopify blog to talk about what type of gear you would use for different types of trips, hut trips or different types of skiing or racing. The blog is also a great source of education for customers. And we have 13 different types of skis so for a beginner, they're like, "Well, what type of ski should I get?" Blog posts saying these types of skis are for this type of skiing are also really helpful.
Felix: Do you find that this has improved conversions for your website the most, or were there other changes that you've made that have made an impact on conversions and sales?
Michael: I do think having the information and the descriptions is helpful. It's not like selling cars and everybody at least knows what a car is for. A lot of people that get into the sport have heard about it, have seen people doing it, but really don't know how it works. Having customer reviews and testimonials is probably the best advantage for a relatively small brand in a niche sport.
I have some nice testimonials when people say, they got good health. A lot of people just call or write questions. When they say, "Hey, Mike Hagen can give you good...He's an expert. He spends time explaining things to you." That really helps comfort people and make them confident in making the purchase.
"Having customer reviews and testimonials is probably the best advantage for a relatively small brand in a niche sport."
Felix: What guides your content creation? How do you know what questions to address for your customer?
Michael: Hagan in Austria some information to me and I write the US catalog. I write the website, I translate the information from German into English for them, for the catalog. And of course, a lot of it is just my experience and expertise in using the gear myself. We're fortunate to live in Breckenridge in the Colorado mountains at 9,500 feet. I use the gear 200 days a year. A lot of the time just from my back door, I literally walk into the garage, get the gear out, put it on my parking pad, and start skiing, climbing the mountains.
A lot of it is just my own use of the gear and then knowing how to explain it to people, and a lot of questions. People call and write with questions and from that, I try to understand where the gaps in people's knowledge are and how to adjust that.
Felix: How have you gone about collecting these customer testimonials and reviews? How does it inform your content creation process?
Michael: I use an app called CM Commerce. It was originally Conversio and it focused on reviews. Also, some follow up email, and the post-purchase email. People make a purchase and I ask them for a review and that posts a review on the product page and then I can take some of the reviews and put them on the homepage. That's what I've been using and that's really been quite beneficial, especially as a less known brand to have customer reviews like that.
Felix: Have you found ways to incentivize or encourage people to respond back to these post-purchase emails that leave reviews on the products?
Michael: I just started doing it and it's a feature of the CM Commerce app. I have it set up where they automatically get an email, and because of skiing gear, I don't want to send them an email three days after they got it. They wouldn't have had a chance to use it yet. They have to mount the skis with bindings. They have to be able to go skiing. I wait 14 or 21 days, so they hopefully have actually used it and give a legitimate review. For those people that haven't given a review, I follow up a month or two later and ask again, and that one’s automated. I tell them how important and how thoughtful reviews are and ask them with no incentive, no monitoring incentive, no discount, etc. It’s a niche sport, people love the sport. They're more likely to provide a review of it than a consumer product. Right?
"I tell them how important and how thoughtful reviews are and ask them with no incentive, no monitoring incentive, no discount, etc. It’s a niche sport, people love the sport. They're more likely to provide a review."
Felix: The price point is higher, does it typically take longer for you to get conversions, because of this?
Michael: I don't know exactly. I am a one-man shop at this point. I'm not actually sure how much I want to grow, or how much I want to keep it a one-man shop. I'm no expert at analytics. Once they get on the website, purchases are relatively quick. People have been exposed to the sport, they know they want it, so they're only comparing it to brands rather than products. Once they get on the shop, their purchase intent is pretty high. It’s more about getting them to purchase from me instead of somebody else.
They've already decided to get something and hopefully, I can give them the answers and provide them the product that they want to get.
Felix: You interact in a qualitative way with the customers. Are there any pain points that, once you address, the customer is more open to purchasing?
Michael: The biggest question or hurdle for a lot of people is that they don't know what type of ski and type of binding to get. This is talking to new people, which is a lot of people because the sport is growing. They're uncertain. They've seen all kinds of different gear and the gear that tends to be marketed in the ski films, on the Warren Miller films, in the highlight reels, is the people jumping off a hundred-foot cliff. That's the sexy stuff and sex sells, and a lot of people have questions on whether they need that type of gear?
Some of the retailers in the market are doing a disservice to people because 98% of people don't jump off a hundred-foot cliff, they do different types of skiing. They don't need that big, heavy gear. We don't sell that type of gear, we sell lighter, more fitness-oriented gear. We get into that, but our focus and our heritage are on slightly narrower skis. Austrian style skiing for good skiers that know how to carve. Trying to convince people that our product, which is narrower and a little bit more specific, is the right product for them.
A lot of people come to me and say, "Hey, I think I need a ski that's 120 millimeters wide. Why should I buy one that's 70?" They think that it's too hard to ski on it. I have to explain the advantages of a lighter ski that is easier to climb on. That takes some time and I can see the wheels turning in people's minds when I'm speaking to them in person or on the phone. There's a certain skepticism because all they see in the movies is this other type of gear and here I am trying to convince them that that's really not appropriate. Preconceived notions are hard to overcome.
Felix: How do you get customers to see the benefit of what you’re recommending, which can often be in direct opposition to the preconceived notions of their needs?
Michael: Right. I'm honest with people, and I'll lose some customers because it's not what they want to hear. I don't sell people what they want to buy. If somebody has gone down the wrong track, instead of just saying, "Okay, here's that gear, go ahead and buy it." I'll try to have the conversation with them first and I won’t convince some people. That's where I can distinguish myself from retailers who have more time pressure, they've got to move product. If people come in with a preconceived idea of what they want to get, the retailer is fine to say, "Okay, give me your credit card."
That's not how I deal. I try to have the discussion with them and really examine what they want, what they're going to be using it for, talk about their skill levels, and then explain why their preconceived idea may not really be matching with what is best for them. Some people I can't convince, I see it. I can see it in their eyes, or I can hear it in their voice.
"I'm honest with people, and I'll lose some customers because it's not what they want to hear. That's where I can distinguish myself from retailers who have more time pressure."
Competing in a niche market among big brand budgets
Felix: The sport is growing, and the big brands are coming with that growth. How have you been able to survive against those budgets and brands?
Michael: Yeah. I try to do it through a website, on the website by discussing the brand and the heritage. In this fast-moving social media and the marketing-driven world, I don't think tradition is a huge selling point for most people, but we have it and I still highlight it. I don't try to pretend that I'm a big brand. I don't say I'm a huge brand with a marketing department and all that.
I use the first person pronoun on the website a lot. I say, "This is what I recommend." Or, "I think this is..." I talk about my personal experience and let people know. I put my phone number and my email address on the website all over the place and say, "You can call on me and when you call, you're going to get me, you're not going to get a marketing person to some call center or something." The personal service and expertise are quite on twice sell or sale, but the highlight is different from the big brands.
Felix: Definitely a seasonal business. What sort of things do you do in off-peak season to help you prepare for peak season?
Michael: It is very seasonal. It’s 10 times busier in January than it is in July. And I haven’t said it yet, but this is a side job. I also coach endurance athletes, including ski mountaineering racers. Fortunately, I coach a lot of triathletes and that's busiest in the summer and quietest in the winter. They offset and that allows me to get that balance a little better.
In the summer, I'm preparing for the winter. I'm updating the website, getting the new gear put on the website. Experimenting with new apps or new software. Then the season kicks off in September, October. My gear typically arrives in October and that's when I get busiest. Then through the winter, you're dealing with retailers or direct sales and then selling for the following winter starts around January. I have to develop price sheets and descriptions of the new gear and send that out to retailers, try to get the retailer orders.
January through April, I'm working with retailers and then I switch in May and June to start to prepare the website and things for the fall.
Felix: You mentioned prepping the website and exploring software, are there any tools that you use that you would recommend?
Michael: There's a few. I've used one. I purchased it a while ago called a Fan fully Automated Marketing, and it was very simple. Basically, they take a product and create a really quick email and as a one-man shop that helped. I am now switching over more back to CM Commerce for the emails. They’ve introduced some new features where they basically do the same thing. They'll pull a product up out of my product listing and I have to create a template first with my brand colors and all that, but they more or less automate an email and then I can edit it and then send it.
Of course, I don't send anything in July or August. That would be regarded as spam if I’m trying to send people emails about skis in July or August. I prepare those, or I will be preparing these now to send later. CM Commerce for email is helpful, and I'm moving to that. It was a pretty difficult switch because I had been using Mailchimp and still haven't completed the conversion, but I'm happy with that so far.
I use an app called Make an Offer. There's a little pop up when they're on a product, it's a little time-delayed and they can make their own offer on a product. It might be a ski and they can offer 500 instead of $700. I tend to use that for older gear or gear that isn't moving very well. And frankly, I use it as much to get emails as I do to make sales. I get some crazy offers that I can't accept, but now I have their email and I can hopefully market to them later on. I use an app or a service called Outdoorly for pro sales in this type of high-end sporting gear. There's a lot of sales to pros, ski patrollers, guides, that type of thing. I use that to make offers for them.
Then I use a couple of things. There's one called Honeycomb Upsell Funnels by Conversion Bear, and I use the Bundle app by Revy, and actually, that's a pretty big deal that I just hadn’t cracked the nut on. In Europe, retailers tend to offer bundles, they'll bundle a ski and a binding and a boot at a significant discount. That maintains the price level of an individual product because the discount is spread amongst two or three different products. That isn’t very common in the United States yet at retailers or online.
I've been trying to offer it through Bundles on my Shopify site to make the market more accessible. Lower the price point for people coming into the sport because it's pretty expensive gear. The bundles can lower that cost or barrier to entry based on cost. But I'm not totally satisfied with that yet. It’s become a little bit cumbersome because I have 13 different skis and nine different binders. I could have 500 bundle combinations and it just gets a little cumbersome and reduces conversion as people get confused.
I'm looking into something, a build your own bundle type of thing. People just get a discount by picking a ski and a binding and a boot, but I haven't found a service that I'm satisfied with yet.
Felix: Do you have certain goals that you want to get the business to or any projects that you're focused on to continue to grow the business?
Michael: I've only become profitable in the last two years. I would say I was losing money for the first three to five, and that's why I say I could have just bought a pair of skis and saved thousands of dollars and hours over the first five years. It was an investment of time to develop it, but the reason I got into doing it originally was to introduce the sport to more people, because it's just such a fantastic sport. It promotes a healthy lifestyle. It's exciting. People get fit. It's just a healthy, beneficial lifestyle.
That was why I got into doing it as a distributor originally and I want to continue with that. I want to make the gear accessible. The retailers tend to focus on the higher end gear and I want to try to grow the market for people that are coming in and cost may be a barrier, so we have some lower price point products and I'm trying to promote that to get more people to enjoy the sport. It is funny because there seem to be people who equate the price with the quality and for the most part, I don't really think that's really true.
But retailers seem to be really hesitant to offer the bundles or to offer the price point products, they focus on the higher-end goods. I'm having to do it myself on the website. Try to promote the lower-cost gear, so more people could get into the sport.
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