Niche businesses trade merchandise, cultures

In another life, the decorative vase fermented beer in the Amazon, a mixture of mashed sweet potatoes, river water and a little spit.

Michael Bernstein and his wife Jeanne travel the world looking for these handmade pieces to then sell in their Tucson shop, Colonial Frontiers. This is the future direction of small businesses: selling niche products with international connections.

Although an April report by the World Trade Organization predicted a weak year for global trade as European economies continue to flounder, niche businesses can often outride these storms, with the needs of their precise markets unaffected, according to Eric Nielsen, the director of the Arizona branch of the U.S. Commercial Service.

In Tucson, proximity to Mexico has created a market for specialized small businesses to both import and export goods internationally.

“Stores that deal in imports and exports do well here because of our proximity to the border and the fact that we have such a mixed culture here,” said Michael Varney, the president and CEO of the Tucson Metropolitan Chamber of Commerce. “When you have dominant cultures, there’s bound to be exchanges of items and services and ideas. What’s driving this market here is the culture of an international community.”

When Bernstein began toying with the idea of selling pieces he found in his post-college travels, he did so with an eye trained on Southwestern décor and Hispanic colonial influence. What started out as wholesale to other stores and galleries, eventually turned into a brick-and-mortar shop in the Lost Barrio that sells only handpicked items.

“My first travels on a shoestring [in the 1970s] were to South America,” Bernstein said. “I found a rich tradition of cottage industry folk art, and I thought it would be attractive to people in the Southwest, because the style seemed to blend with Mexican and Indian heritage…I bought items from local markets in countries where I was traveling—Colombia, Ecuador and Peru.”

Bernstein acquired the beer-fermenting vase, one of his earlier acquisitions, in the Amazon rainforest. In these early years of his business, he focused on collecting handicrafts from local peoples, boating up rivers with guides to trade American products for baskets, woodcarvings, hammocks and jars.

“We got to the village, and this thing is sitting in the middle of the village filled with booze, and people are sitting around it sipping the drink, telling stories and just chilling,” Bernstein said. “At some point, I’ll ask them, ‘Hey, would you consider selling me that pot?’ They go, ‘Okay. We’d rather do this in aluminum anyways. It’s just too hard to make.’”

After making an exchange, Bernstein ships his treasures home where they are refinished for Western use. This is international trade for niche businesses at its simplest—transporting goods from an indifferent market to one with greater demand.

For small businesses that sell specialized products in the United States, the primary market for a product often exists outside of the country. In Arizona, this often means cultivating an export-based relationship with consumers in Mexico. The state of Sonora, in particular, is the largest export market for Arizona businesses, Nielsen said.

“You will find a number of companies here in Tucson that don’t necessarily have a huge number of potential clients locally,” Nielsen said. “About 95 percent of the world’s population is outside of the U.S. Exporting companies tend to grow faster than non-exporting companies. They are faster, more profitable, and pay better.”

In 2011, approximately one-third of Arizona’s exports went to Mexico, according to data compiled by the Morrison Institute for Public Policy at Arizona State University. Primary exports from the state included civilian aircraft and information technology products. Just as artisans have long filled the traditional role of trading craftsmen, this increasing emphasis on technology creates a new, niche artisan with technology savvy.

What determines success, then, for these internationally connected businesses is not plugging into a massive market, but establishing superiority within the niche.

“If you want the best in the world, you go to them,” Nielsen said of niche, family-owned businesses. “It’s not a huge business or a huge market, but they’re the best, and people will pay a premium for their product.”

In Tucson, small businesses make up about 85 percent of membership in the Tucson Metro Chamber, a reflection of the overall business community. By establishing relationships with buyers outside of the country, these small businesses connect their local communities to this international marketplace. Importing, in particular, brings the world to Arizona.

Indus Design Imports, a wholesale importer based in Tempe, sells handcrafted products to designers and small businesses. The company started small, founded by brothers John and Aki Rahman after a move from India, and grew to supply buyers around the country.

“You have a chance to actually have relationships with other countries and expose pieces to people who cannot travel around the world,” Rahman said.

Although the Internet has enabled small businesses to get connected internationally and grow, travel remains crucial to both importers and exporters.

“Over 30 years, we’ve developed many friendships with craftsmen and antique dealers and exporters around the world,” Bernstein said. “Now we’re dealing with their sons.”

Bernstein tries to visit some of the villages in the Amazon every year. Indus Design Imports now collects pieces from around the world, only because the business grew out of the brothers’ preexisting contacts in India. The Tucson Hispanic Chamber of Commerce promotes a slogan of “One region. One economy. One border. Two countries. Unlimited opportunities.” All of these relationships grow out of personal proximity.

“Face-to-face is still the most effective and long-lasting way to build a relationship for the purpose of doing business overseas,” Nielsen said. “It is easier to maintain because of the Internet…but that personal connection can really only happen when people are in the same room together. That has not been eclipsed by technology.”

This individual interaction is the appeal of small businesses.

“There’s this sense that you’re doing business with a neighbor,” Varney said. “When you do business with a company that you know is local, you feel closer to supporting your hometown community.”

As customers both in the United States and abroad look for more specialized or handcrafted products, small businesses have an opportunity to maintain local roots while growing globally. Niche businesses will continue to grow in the global economy, according to a 2008 Institute of the Future small business report.

“It’s a small world,” Rahman said. “We are a global society. We get to show artisan products around the world and help small communities.”

Businesses like Bernstein’s bring snapshots of the world to customers in Tucson, contributing not just to Arizona’s economy, but also its culture.

“It is a passion for travel and for culture that propelled us into this business,” Bernstein said. “When people come in, they get a little history lesson. We’re selling as much the story of people as we are selling the items.”

Leave a Reply

Your email address will not be published.