Voice of the Modern Manufacturing Economy Since 2013

Hiker Trailer

by Chris Meehan on April 16, 2018, 09:53 am MDT

www.hikertrailers.com

Denver

Founded: 2014

Privately owned

Employees: 13 (8 in Colorado, 5 in Indiana)

Industry: Consumer & Lifestyle

Products: Trailers

Co-founder Robert Reeve is having trouble keeping up with demand for his company's tough, economical trailers.

"We are literally 13 months backlogged with trailers," says Reeve. "We're building anywhere from 10 to 20 trailers a month. Our competition might only be building three trailers a month. Sometimes we hit as high as 40 trailers a month between two locations."

Based on a design Reeve developed, the Hiker Trailer is boxier than most teardrop trailers. Reeve put his first trailer up for sale on Craigslist and sold it within 10 minutes of the posting, he says. Within five days, he'd sold 10 more that weren't built yet.

"It was price point and design and where we were positioning our trailers at," explains Reeve, citing market knowledge from a previous endeavor. "Having the experience, we knew where to price them."

Since launching the company, Reeve and his partners have built 600 trailers between two shops, one in Denver and another in Indianapolis. Even with that rate of production, the two facilities can't keep up with demand for the affordable camping trailers. "We're literally $4,000 to $5,000 under everybody else in terms of costs and it's pure quality and quantity," he explains. "The more trailers you build, the less you have to charge."

Indeed, the company's basic trailers start at $2,895. Even its most expensive base model, the Extreme Off-Road Deluxe model starts at $9,995. That's far below many other trailer company's models, which often fetch $20,000. Hiker Trailer was recently featured in Outside magazine as well as in Toyota Cruisers & Trucks.

Reeve attributes some of the higher costs from competitors to options that are a la carte at Hiker Trailer. "We kind of have a sushi menu," he says. Customers choose from a bevy of customizations ranging from extra doors to air conditioning and countertop and trim choices.

Still, there's a limit to the options. "I'm keeping you in a funnel," says Reeve. "If you go out of that, you're going to pay three or four times more."

Demand for the trailers spans age groups and interests, according to Reeve. It ranges from 30-year-old single parents that want to have adventures, but also want some security, to retirees that want the value. "The other half are these off-road enthusiasts that are building massive off-road rigs that want trailers that can bounce on bumpy roads," he says.

Prior to launching Hiker Trailer, Reeve and co-founder Wes Henry made more traditional teardrop trailers in Indiana. "We were two separate manufacturers and we used to buy materials together and we'd co-op them," Reeve says. "That way we could go to a vendor with a bigger order. We'd split it between the two of us."

That co-op purchasing philosophy has carried over to Hiker Trailer, according to Reeve, and it helps the company keep costs down. "We sell materials to six other manufacturers," he says. "Sometimes we'll buy bigger quantities and share with others."

Meeting demand is Hiker Trailer's biggest priority. "We're looking at a huge expansion later this year," says Reeve. "Just taking it a little more national than we already have it. The only way we can get these trailers done is to drop thousands and thousands of dollars in cash to get them built faster."

The company is debt-free, but Reeve anticipates looking for private investments as he contemplates the expansion. He is somewhat cagey about where the expansion will take place, but notes, "Almost 80 percent of the trailers being delivered are Missouri River west. We will ship less trailers east than we will west."

Reeve would ultimately like to get to a point where the company is able get back to where production meets demand and actually pre-build some trailers. "I'd love to get there," he says. "I don't know how to get there."

Challenges: "The challenge of growing to meet demand and producing a large enough amount of trailers so that customers don't have to wait a year," Reeve says. "Having 100 trailers backlogged is not good, we've got to figure out how to fix that."

He also cites inventory problems as some materials can take more than 14 weeks to be delivered from time of order. Many of his suppliers are based in Indiana, where numerous RV companies manufacture.

The Trump administration's steel tariffs have had an impact on buying decisions. "What we've chosen to do is ordered a lot of our materials for the year," Reeve asserts. "We've pre-purchased them to beat the tariff prices."

Opportunities: "Getting more of our product into customers' hands and being able to supply them," Reeve says.

Needs: "More space," Reeve explains. Ultimately he wants to double production to keep up with demand but needs more space and would like to bring more parts of production in house, including welders and powder coaters, for instance.

Reeve also observes that it's harder to find employees in Indiana, but the cost of living is much higher in Colorado.

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