March 19, 2012 1 Comment
HONG KONG – SylvanSport founder Thomas Dempsey learned last summer that a product similar to one he’d patented was being made in China when a customer sent him a link to a Chinese company’s website.
On the website, Dempsey found a recreational camper trailer that looked eerily like the one he designed and patented and sells through his 8-year-old Brevard, N.C., company.
“We were shocked,” says Dempsey. “We thought at first that what we saw was our product, but as we looked at some of the video and photography, we realized that this is tooled up from scratch.”
It was the beginning of what would be a nightmare for any small-business owner. Since then, distributors inSouth Korea and Japan have opted to market the Chinese company’s product instead of Dempsey’s. A Japanese distributor mistakenly thought it was buying products from SylvanSport’s Chinese factory, says Dempsey. Confused consumers have also e-mailed SylvanSport, asking about its affiliation with the Chinese product, owned by Wuyi Tiandi Motion Apparatus, a maker of dirt bikes and camping gear in Jinhua City in eastern China.
These problems have left the promising U.S. upstart, whose camper trailers retail for about $8,000, in a precarious position. While SylvanSport expects a “break-even” year, with sales around $3 million — more than double 2011′s — business could suffer in coming years if distributors keep fleeing to the Chinese competitor, Dempsey says.
In 2011, SylvanSport got about 15% of its sales from outside the U.S. and about half of that from South Korea, Japan and Australia. Dempsey expects 30% of 2012 sales will be international.