Every Cloud has a silver lining
Every cloud has a silver lining, the old adage goes, and in the eyes of the entrepreneur (are you an entrepreneur? click here to see), the silver lining beams brightly, cutting swathes of opportunities through torrents of gloomy economic news.
R16 to the $, R18 to the €, R23 to the £, rising electricity costs, politicians too busy defending themselves against a raft of accusations to provide decisive economic leadership, and the list goes on and on. And what often happens is that we batten down the hatches, keeping a low profile; hey, who gets fired for doing nothing anyway? And whilst all are scurrying to places of safety, there is always going to be those individuals swimming across the stream, looking for opportunities, and then focusing on a silver lining, a bit like pointer on a quail.
An entrepreneur will see the weakening rand as the perfect opportunity to export. And if your product is consumed locally, there is a good chance that it may have broader appeal. We are very much a consumer based market, this means that what we import a considerable amount. And even if we do make it locally, we still import it, either for price or quality reasons, or both. The currency assists in two ways, it makes our products cheaper for off shore markets, and it makes the imported equivalent more expensive. Our ability to add value to primary materials is limited, and thus the export of raw materials is very high, only to import the finished item.
Now is about the best opportunity we are going to get before the inevitable inflationary costs catch up. Call it a bit of a buffer, giving us breather to refine our manufacturing processes to ensure that we remain competitive after our costs have crept up a little.
Is your product export ready? this is a question frequently contemplated, and if you have never done so, now is the time to look beyond your current market. Regardless of whether you find yourself in the fortunate position where supply is meeting demand or not. Below are some steps to consider;
- Identify your local competitors, if you have any.
- Do a simple factory door selling price comparison.
- Get onto Google, and search for competitors around the world, stopping in at sites like alibaba.com.
- Get some quotes of what the cost would be to import your product.
You will now have the basic information to determine the feasibility of continuing with the exercise. For example; your product leaves your factory door at R100, and it would cost you R250 to import a similar product. There are of course 2 unknowns here; one is the cost of delivery – shipping, clearing, and duties if they apply, the other is the suppliers selling price. Now this is not an exact science, and does not need to be, so contact a freight forwarder and get a quote on shipping, add your selling price to the shipping cost and you will have an approximate idea of your level of competitiveness.
Assuming your homework leaves you with promising potential, get back onto google and search for companies who will assist you in determining the export readiness of your product, and will advise on specific market requirements in terms of packaging etc. There is some more information at this link, click here.