The Shipping Container Plan

Last year I needed a big project. Having just returned from Denmark with a head full of information about Danish interior design, I decided to import a container of vintage Danish furniture to Victoria, where there is a strong market for it.

Cost breakdown

As the plan came together, I needed to increase my certainty about it. I wanted exact numbers, or at least well-informed estimates, about how much I would have to spend on shipping, how much I could afford to invest in product, and how much I could hope to profit.

My education is in computer science, not business, so I started with a spreadsheet and turned it into a crude webapp that I could consult and manipulate numbers as needed. Here it is – http://rocketships.ca/srs/shipping/.

Fixed costs

Ship a 20’ container from DK to CA $5800
Plane ticket to Denmark $1400
Truck+gas+living expenses while driving around Denmark for 3 weeks $1000
Total $8200

Variable costs

Import tax 9% on value of stock (what I bought it for, not what I sell it for)
Insurance .06% of value of whatever’s in the container.
Loan rate 4.5% of the portion of capital that I borrow.

How much you have to put in to get x out

I ran the numbers a few different ways and found a sweet spot at about $30k input to make $10k back. $50k input would have been better, but $30k was what my risk tolerance could handle – at least for the planning phase.

How to get through customs

There is a trade agreement between Canada and the EU, which Denmark is part of. That makes the customs process simpler than it otherwise might be. There are three main forms you need.

A6A

Freight/cargo manifest. You have to list every item inside the container as accurately as possible. I understand that any inaccuracy will lead to customs agents tearing your shipment apart (even more than they otherwise would). There is probably an art to providing exactly enough information to keep them disinterested.

B3

Customs coding form. This form has 50 fields in which you have to detail, in the required format, information about your importer, your own company, and the weight, value and customs classification of your goods. Customs classification is a 10-digit code that you look up in the Canada Customs Tariff document, published here – https://www.cbsa-asfc.gc.ca/trade-commerce/tariff-tarif/2018/menu-eng.html. You have to figure out what customs code description matches each item in the shipment and fill out a form B3 for it. There’s only one field for the CDC code on form B3, so it seems that you need a form B3 for each different type of thing you’re bringing in. I’m looking at wooden furniture and lighting, so that’s two codes. I believe that means two forms.

Ci1

Canada Customs invoice. This one is kind of optional. If all the goods come from a wholesaler who can provide a complete invoice, then you can use that. However in my case, I’ll be going to estate sales, flea markets, auctions, charity shops, a couple of wholesale places, and people’s homes. Most of those sellers will not provide an invoice. It’ll be a cash deal and the paperwork will be my problem. So for each vendor I have to provide a Canada Customs Invoice. It looks like any other invoice; a list of items and prices, with the seller’s contact information.

Customs Broker

The forms aren’t complicated, but there are a lot of boxes on them. Every box is a chance to make a mistake that will get the container held up in customs for weeks or months. My frequent method of getting through big, intimidating jobs is to do the work as quickly as possible without regard for mistakes, then show it to someone who can tell me where I went wrong. This is much faster and more effective than trying to get it right the first time, if you can stand looking like an amateur once in a while. I can. But in the case of customs agents, the stakes are higher than looking like an amateur.

This is where a customs broker comes in. These are companies whose whole purpose is helping people get their shipments over the border. I contacted Dilas Intl Customs Brokers to get a quote for help, and it seems that they can make sure that everything goes smoothly for about $300. Probably worth the money, though my initial plan was to handle all the paperwork myself.

The container

The container is 20 feet long and 10 feet square. If you were moving out of a one or two bedroom apartment, that would be about enough space to fit all your stuff. The best quote I got was from shipping.dk, who can ship my container to Vancouver via the Panama Canal for $4850 USD.

I talked with a very nice guy named Kaspar who patiently answered all my beginner questions informatively and said, “Just confirm a week or two in advance what day you want the container.”

The prices of containers can vary a fair bit. Shipping.dk can do the 20-foot container for $4850, but a 40 foot one is almost double the price, $8250. Meanwhile Blue Water Shipping can provide a 40 foot container for $8000 even, but the 20 footer is only slightly cheaper, at $6800. It’s worthwhile to shop around.

Where to get stuff in Denmark

I’m not the first person to try out this plan. People have been shipping containers to northern California for decades. There are two shops in Vancouver that specialize in importing containers of furniture from Denmark, and between the two of them they bring in seven containers each year. They don’t have any trouble finding goods, since the Danish market has caught on as well and there are wholesale providers of used Scandinavian furniture that specialize in container shipping. Sites such as bliddal-classic.dk and remodern.dk let you choose exactly what you want, pay for it and ship it quite seamlessly.

The trouble is, those sites are expensive. They know what they have to sell, and sometimes they sell for almost the same prices as shops in Victoria would.

You can find cheaper stuff if you work a bit more informally. Copenhagen is, of course, the most expensive place in the country, and that’s where most people begin and end. I went to Sønderborg instead. No one has ever heard of it.

Sønderborg at the beach

People donate their old stuff to charity shops or take it straight to the dump; Danish trash is hipster treasure. Danish dumps are staffed by cheerful, clean, well-paid union employees who know good value when they see it; they run an auction site for the good finds. Prices at genbrugsauktion.com are much cheaper than at the wholesale sellers. Lauritz.com is another auction site, a bit more selective and high end than the genbrugsauktion, still cheaper than the wholesalers, and covers Norway, Finland and Sweden as well as Denmark. I think the key must be to troll those sites all year, and do a pickup once in the winter.

And finally, there is my former partner Bo. I helped him open his shop in Southern Denmark last year, Als Genbrug og Antikvariat. He gives me a 30% discount and has negotiated discounts with a couple of other local shops for me.

Inventory considerations

Deciding what to buy is the hardest part for me. I have a book about Scandinavian design, some websites where I can research, and a year or so of looking at and coveting fine furniture. It doesn’t feel like nearly enough experience to compete with the old salts of this industry who have been developing their expertise for decades. I even lack the simple experience of furnishing the house that I live in. So for furniture, I narrowed my focus down to a relatively short list: nightstands, desks, floor lamps, pendant lamps, dining room chairs, accent chairs and coffee tables. These are all things that I have personal experience with, so I can trust my judgment.

Condition is important. All of the shops I’ve talked to have people to repair and refinish the stock they buy, but adding the hourly rate of a repair person runs up their costs very quickly. Upholstery is expensive, and almost never worth the effort. So anything that must be recovered is probably not going in my container.

I can refinish wood and I enjoy it, so wood doesn’t have to be in perfect condition – but I don’t have much space or time for working on it, so not too much damaged wood is allowed. Teak, walnut and rosewood are most popular for Danish furniture. To import rosewood into Canada, you need special permit, because rosewood is an endangered species. Without the documents, I can’t buy rosewood. Teak is more popular anyway, though.

Lamps come with Danish plugs. Every plug has to be changed to Canadian prongs before it can sell. It’s an easy and simple job, but good luck selling any lamp in Canada without fixing it first.

And finally, there are the dead spaces inside of cabinets, between the legs of chairs, under tables… this is where I can find space for jugs, ceramics, little boxes of knickknacks, and other fun little things that cost almost nothing and can sell well in Canada.

The local market

I started looking for customers. This was my favorite part of the process, by far. Turning up at people’s place of business to chat with them is nervous-making, exciting, and ultimately fun. I met some great people doing this. Roshan, for example, is a salsa instructor and former auctioneer who keeps shop part time at two of Victoria’s midcentury modern showrooms. They are Trig Vintage and the Fabulous Find, located on the same block of Herald St below Government. Roshan seems to know everyone in Victoria, and told me what I needed to know about the owners of the two shops before I went to meet them.

Trena Danbrook owns Fabulous Find with her husband Greg. Greg worked as a cabinetmaker and upholsterer in the early days of the shop, supporting them for the first two years before they started seeing a profit. Greg appraises and repairs furniture; Trena sells it and treasure hunts. They host drinks and appetizers once a month in their shop, after hours, and people who appreciate fine design show up to gossip and appreciate the current stock.

Ian Vosberg owns Trig Vintage, and he was enthusiastic and supportive of my plan, but reserved about how much he wanted to participate. He agreed, as Trena and Greg did, to watch for my emails and answer promptly if they saw anything they could buy.

The Purchasing Math

5 Danish kroner = 1 Canadian dollar. This makes for easy math (it’s actually more like 4.8 to the dollar, but close enough). To decide whether I can earn on any given dining room table, I take the price in Kroner, say 700dkk, and ask myself, can this sell for the same number in CAD? That is, can it sell to a homeowner, buying a dining room table for their house, for $700?

If so, then I can make money. I buy it for $140, sell it to Trena or Ian for $350, they sell it for $700, and everyone wins. After I factor in shipping, maybe I made 20 or 50 on the table, and my costs are all covered. Repeat that about 200 times and I can easily make back my investment.

Denmark

I went to Denmark on July 1st to validate the plan in person. Bo, who is still a friend and wanted to be part of the plan, let me drive his cube van around to the shops and auctions of Southern Denmark to find my stock. He also had a fair bit laid aside for me. Unfortunately, once I started sending photographs and prices back to Trena and Ian, I found that I mostly wasn’t able to get prices that would work for both of us.

For example, a set of compact white sofas for 345 kroner – the set could easily sell for $345 CAD with Ian. So that’s a win. But there weren’t many other wins. Erik Buch style chairs are common and cheap here, and popular in Canada. There are lots available from 75kr to 125kr – that’s damn cheap for a nice teak chair, but they still have to sell for 75 to 125 dollars in Canada to justify that. They’re popular, but not that much. In Canada they could get $25 to $50 each, maybe. And most of them need recovering.

This fine expandable dining room table was, I thought, a sure hit for Trena. It’s teak and has a beautiful surface, and it can shrink down to kitchenette size or expand to accommodate a dozen people. Exactly the kind of thing that’s popular for small homes in Victoria, and for 1600kr. But Trena said that they’re common and not quite what she’s after.

What I’m seeing consistently is prices that I could earn on if I had my own shop, but being a middleman isn’t getting me anywhere. I don’t quite have the ambition to open a shop of my own, so it looks like the plan is bust for this year. How sad, stuck in Denmark in July with nothing to do… maybe I can keep myself busy somehow (smiling).

This was a fun learning experience, but I’m on to the next project for now. This one might live again in another form, once I can figure out how to make money!