Three veterans of the action sports industry plan to officially launch an online marketplace later this month.
The Laguna Beach-business, called hub360, has just completed its first round of financing from private investors. Details of the financing were not disclosed.
“Like any good action sports company, we started in our garage and we’re building very slowly,” said Jim Kempton, former editor and publisher of Surfer magazine and one of three company principals.
The site, www.hub360.com, is set to launch at the end of the month.
The site is designed to give action sports retailers and manufacturers the ability to conduct business online, including placing and tracking orders, receiving updates on product availability and browsing catalogs.
Retailers can use services for free, according to Kempton, hub360’s director of business development and marketing. Manufacturers pay anywhere from $500 to $7,000 per month in subscription and listing fees. Hub360 licensed technology for the site from Montreal-based iCongo Inc., which offers a similar platform for the sporting goods industry.
So far, up to 20 manufacturers have signed on including Island Style and Reef Brazil, as have about 100 retailers. They include OC names such as Becker Surf, Beach Access Inc. and Laguna Surf & Sport.
Quiksilver Inc. said it is talking with hub360 but hasn’t signed on yet, according to a spokesman.
President Dan McInerny anticipates that those numbers will jump to 100 manufacturers and 2,000 retailers in a year’s time. McInerny estimates there are more than 1,000 action sports manufacturers and close to 10,000 retailers nationwide.
“This is a way the industry can really rally together in one common marketplace and come up with our own system that will make us more efficient,” McInerny said. “Once deployed, hub360 can make a huge difference in how (manufacturers and retailers) go about business and it will really complement their existing protocol.”
Hub360 will not replace trade shows, according to McInerny. Rather, he said, it facilitates business operations all year round.
Other benefits, according to McInerny, include improving communication among companies, and cutting the time it takes to reorder, turn and sell merchandise.
McInerny said he came up with the idea for the site during his 15 years at Quiksilver, where he held various positions.
“I learned pretty quickly that there were a lot of inefficiencies in the action sports marketplace between suppliers, buyers and sales agents,” McInerny said. “Something like this can be monumental in the success and ongoing development of the industry.”
Dave Becker, president and co-owner of Becker Surf, said he was impressed by hub360’s “sexy” services, including access to off-price merchandise and manufacturers’ line sheets,in color and with size scales.
Becker said he also puts a lot of trust in the company’s principals: Kempton, McInerny and Jimbo Gaskin, former advertising director at Surfing magazine and a longtime Billabong USA representative.
“I told Quiksilver the first guy to go online is going to get $100,000 a year out of me in additional sales because you’re going to make it easy for me,” he said.
Becker, who also runs an online store, www.beckersurf.com, said he could have reason not to support hub360 since the company will make e-commerce easier,and give him competitors. But he said the advantages are “so good overall I can’t argue with it. It’s progress.”
After much thought, he also dismissed his second biggest concern: sales reps and the “insecurity that a b-to-b role creates for those guys.”
“I don’t think it’s going to affect them,” Becker said. “You need them. They’re the bond that keeps the industry together. I call them the village elders.”
George Mayou, operations manager at the U.S. distribution center of Island Style in Oceanside, agreed that manufacturers will need to keep reps regardless of hub360.
“You’ll never get away from people selling to people,” Mayou said.
Instead, he said the site will open other opportunities, including giving him better paper trails of orders and bigger windows to reach busy retailers.
There are some members of the action sports industry, however, who have been reluctant to use the Internet for e-commerce purposes, particularly when it comes to using a third party to sell to consumers.
“The business is built on relationships and there is a strong relationship between manufacturers and retailers,” McInerny said. “It makes them nervous about the ramifications.”
But McInerny said those businesses are more open to using it on the business-to-business side,as long as things are simple.
“When you keep it easy and convenient it increases the adoption rate,” McInerny said.
Plus, Kempton said, hub360 hasn’t made inflated promises to customers about the Internet. He said it’s “nothing more than technology to serve business” rather than something that “will reinvent the world”,an expectation that got past online hopefuls in trouble.
Hub360 has partnered with Action Sports Retailer Trade Shows and the Surf Industry Manufacturers Association to promote its site and plans eventually to do the same with other trade-show groups in the U.S. and Europe, according to McInerny.
There are also prospects of expanding the service to other sports marketplaces, such as outdoor, cycling, tennis and golf, if all goes well.
“We see this as being very scaleable,” McInerny said. “But we really want to stick to our knitting and make sure this is done absolutely as well as it can be done in the action sports industry.” n
