Five years ago, inspired by Chris Guillebeau’s Annual Review, I wrote Tortuga’s first Year in Review. But, for the last three years, I haven’t written a Year in Review to recap the past and to preview what’s next for Tortuga. That streak ends now. Let’s start a new one.
Chris’s review template asks two questions: 1. What went well this year? 2. What didn’t go well this year?
2018 Year in Review
What Went Well This Year?
When we made the decision to grow our team and upgrade our product line in 2016, we created the Outbreaker, a whole new category of travel backpack. A year later, the Setout took us back to our roots as a true evolution of our V2 Tortuga Travel Backpack.
After the success of the Setout Backpack in late 2017, we set a goal for 2018 to reach product parity with our retired V2 product line.
In 2018, we applied everything that we had learned since V2 — and everything that worked well with the Setout Backpack — to build Setout versions of retired V2 products. Just this year we launched the Setout Daypack, Packing Cubes, Divide Backpack, and rain covers.
Catering to More Carry Styles
Tortuga started as a brand for one baggers. This year, we began to expand that vision based on how you actually use our products. Through the 2018 Customer Survey, we learned that many travelers used their Tortuga Airs (the V2 version of the Divide) as a personal item alongside a rolling suitcase. Customers wanted a more seamless experience for that use case, so we designed an unobtrusive passthrough sleeve so that you could attach the bag to a wheeled suitcase.
The Setout Divide Backpack was our first product to include a luggage handle passthrough sleeve.
While we believe that travel backpacks are the best luggage option for city travel, we know that not everyone agrees. Look around the airport. Most people are carrying suitcases. Those travelers aren’t likely to become backpackers until they’ve lost a wheel and learned about the shortcomings of suitcases for city travel.
After suitcases, what’s the next most popular luggage choice? Not travel backpacks. Not even hiking bags. The next most popular option is a small backpack and a duffle bag. I call this two bagging.
Look a bit closer and you’ll see that most people are carrying a backpack and duffle that they already own, not ones they bought specifically for travel. The backpack is a work or school backpack. The duffle is one they’ve had in the back of their closet for years. I still have a Nike duffle bag I’ve owned since middle school. It still works great.
For those who don’t travel often, these bags get the job done and don’t cost anything extra, but frequent travelers can benefit from a backpack/duffle combo that’s optimized for travel.
Thank you to everyone who has supported us this year. Foremost is you, Team Tortuga. Prioritizing the customer is one of our core values. We can only be successful if we serve you well. At times, we’ve missed the mark but are always recalibrating to get back on track. I hope that our 2018 products and 2019 plans (keep reading) showcase this value.
We also owe thanks to our partners: everyone who reviewed, wrote about, or otherwise shared Tortuga with their audience. Thank you for vouching for us and for helping to evangelize a better way to travel.
Finally, thank you to Carryology for naming the Setout Backpack as the Best Carry On in the sixth annual Carry Awards and to the Wirecutter for naming the Outbreaker Backpack the Best Carry-On Travel Backpack for the second year in a row.
What Didn’t Go Well This Year?
Not everything went according to plan.
When reviewing our 2014 Year in Review, I was reminded of the stockout issues that we dealt with back then. After the Tortuga V2 took off in late 2013, we frequently sold out of our travel backpacks as we grew our production capacity. In total, the Tortuga V2 was sold out for six months of 2014. If you aren’t good at math, that’s half of the year. That’s no way to run a business.
Our 2018 stockouts weren’t that bad, but they were still unacceptable. To fix this issue, we hired Carlos as our first ever Operations Manager. He’s already forecasted all of 2019, and we’ve put better systems in place for predicting stock levels and for placing re-orders.
The Setout Divide and the Outbreaker Daypack are still sold out. The Divide will be back in stock around January 9th, and the Outbreaker Daypack will be back in stock this spring. The daypack would have been available earlier, but a problem with our supplier led to material that was waterproof but not water-resistant. I know that sounds oxymoronic, so here’s what that means: Water couldn’t pass through the material, but it would soak into the outer layer rather than ‘beading up’ as you’d expect. We rejected that material and a new batch is in production. I apologize for the delay but please know that it was necessary to maintain our high quality standards.
We hope to eliminate stockouts entirely in 2019. The one possible exception will be new product launches. We always start with small initial orders to test new products and manage the costs of doing so. If a product sells well, we scale up production to meet demand. If it doesn’t, we retire that product. As a bootstrapped company, we have to make small bets then double down on the winners.
The flip side of stockouts are overstocked products. To clear out overstocked products, we announced a Last Call Sale with discounts up to 40% off select Outbreaker and Homebase products.
Our goal is to clear out these overstocked products to make room for new ones in 2019. We’re happy to offer these products at a discount to you, but they’re overstocked because they were unsuccessful. These are bets that we lost. Unsuccessful products are disappointing but aren’t all bad. We’re still able to learn from them and keep improving in the future.
Ending International Shipping
I wasn’t sure where to categorize this one. Tortuga will stop shipping internationally on January 1, 2019. We know that this is the right move for now. However, we also appreciate that this policy change is a negative for our international customers. I’ll quote the original blog post linked above to explain.
While we can ship bags anywhere, we’ve never served our international customers as well as our American ones. If you’ve bought a Tortuga from outside of the US, you’ve paid expensive shipping fees (despite Tortuga absorbing some of the cost) and customs fees levied by your home country. Customs offices often hold packages until you show up in person and pay. This is not the fast, easy online shopping experience that we want to provide. … We aren’t doing right by you at the moment. Our solution is to stop shipping internationally in the short-term until we can provide an experience equal to the one that we can provide to Americans right now.
Our theme for 2019 is Play the Hits. Our first step is to deliver more of what you already want from Tortuga.
The first step is eliminating stockouts. We need to have the products that you want in stock whenever you want to buy them. Many travelers wait until the last minute to buy their luggage. We must accommodate them with in stock products that ship out fast.
The second step in playing the hits is to add variants of your favorite products.
In March, we’ll release a 35L version of the Setout Backpack for travelers wanting a less-than-maximum-sized carry on or who need to be compliant on European and budget airlines with stricter baggage allowances. The Setout Backpack will come in both 45L and 35L versions, just like the Outbreaker Backpack.
Also in March, we’ll be adding colors of the Setout Backpack. Both the 45L and 35L versions will be available in heather grey (the current option) as well as black and navy blue. The blue version will be the first product that we’ve released in a color other than black or grey.
The last confirmed product for 2019 was just approved and will be available this summer: The Women’s 35L Setout Backpack. This will be our first product designed specifically for women’s bodies with narrower, curved straps and a smaller hip belt. We’ll share more details and pictures as we move into production this spring.
These are the products already on our 2019 launch schedule. These products are bets. If they sell well, we’ll double down on more colors and black/blue versions of current products. If you like the Setout 35L, we’ll make more mid-sized travel backpacks. The women’s fit backpack will teach us about the market for women’s bags.
Since 2016, we’ve grown our team and launched lots of new products. We’re approaching our goal of having more than one year of “runway” for new products. At some larger companies, new products may be “ready” up to two years before they’re released.
We’re aiming to have a large queue of products that are ready for production. This gives us more time to develop and test new products while still allowing us to be nimble. If the new colors sell well, we should already have black and blue versions of existing products ready to go into production.
As we release the new variants mentioned above, we’re working on lots of other ideas internally and with our factory. Based on your feedback from the Customer Survey, we’re developing more Setout accessories as well as products for adventure travelers, business travelers, and hostelers. We’re looking forward to your feedback and to always serving you better.
Give You the Info You Need When You Need It
Luggage is an important decision and a significant investment. Additionally, many of our customers are new to carrying a travel backpack. As a result, we always aim to give you all of the information you need to make an informed decision whether that’s what type of luggage you need or which Tortuga product to buy.
Packsmith, our blog, is full of advice on gear and packing. Tortuga product pages have lots of details, specs, and videos. In 2019, we’ll be rolling out more informational pages and instructional content for your travels. The upper right hand corner of the site now features links for how to choose, how to fit, and how to pack a travel backpack.
What other information would be helpful in text, image, or video format? How else can we make it easier or more convenient to travel with a backpack? If you’re already a backpacker, what would help your friends and family switch from a suitcase?
Growing the Supply Chain
Tortuga backpacks are made in China because China is still the best place in the world to make technical packs like ours. However, our business is under threat due to the US/China trade war. We built Tortuga for nine years around a cost structure of 17.6% duties. That means that for every $1 of goods that we import, we paid $0.176 to the US Customs and Border Protection. That 17.6% tariff is now 27.6% and may go as high as 42.6% by March.
A 25% increase in costs is a major threat to any business.
As a precautionary measure, we’re vetting and sampling with factories in Vietnam. Companies like Osprey and Patagonia have been making bags in Vietnam for years, so the expertise in “cut and sew” products is already there. The supply chains aren’t quite as robust as in China, however.
We aren’t looking at Vietnam to chase the lowest costs. We’ve already turned down offers to make our bags in less developed countries with lower costs and less stringent labor laws. In fact, we’ve had several quotes from Vietnam that are higher than in China.
We are considering production in Vietnam because we can make great bags there. I’ll share more about this process as it unfolds.
I’m only writing about this now to share some of the challenges that we are facing and how we are dealing with them. We prefer to be transparent about our challenges and our supply chain both because it’s the right thing to do and because honesty and transparency are crucial to winning the trust of customers.
Earning your trust, not chasing the lowest costs, is how we will continue to build Tortuga.
Thanks for reading. See you in 2019.
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