Exporting is the process of sending goods to other counties to be sold (where it will be “imported”). Start your own business exporting locally made products.
In South Africa small business circles importing and exporting is often thrown around as where opportunities are. But it’s not that simple. Firstly there are very few companies that are in both the business of importing AND exporting as they usually specialise in one area. Secondly do not confuse a freight forwarder and clearing agent with an importer or exporter, what they do is arrange the transportation, storage and navigate the customs process on behalf of the importer or exporter. Thirdly South Africa as a whole imports way more goods than it exports, any goods not made in South Africa has been imported. Yes, there is still money to be made in importing but very it’s competitive. Today we look at exporting.
The business model I will be looking at is importing locally made goods, specifically goods that you do not manufacture yourself. It is a retail business model, where you purchase a product, add a markup and resell.
What to export?
What to export is very important, I always advise people to specialise in a particular area (when I say area I don’t necessarily mean one product or industry). This will help you get a reputation as an exporter of that particular products as well as familiarise yourself quicker with the customs process in different countries regarding your products.
How to find a market
Before you go looking for clients you have to find a market, you need to find places that needs goods that are made in South Africa (it can be any type of item not items that are solely made in SA) where you can enter and use the weak rand to offer a cheaper price. South Africa has an excellent reputation in some sectors such as meat and wine and because international trade is usually done in US dollars you can offer a cheaper price than a lot of competitors.
Look for countries (or islands) that don’t have an advanced local industry. A lot of places only manufacture a select few items and import the rest. The Maldives and their fishing industry is a good example. Think deeper; there is already a lot of competition on the surface. Can you perhaps supply food to oil rigs? Can you sell potjie pots to expat shops abroad etc.
How to find clients
Once you have decided what product to export and what market to focus on. Then you need to need to find a way to get clients. If you just thinking about putting a website say you exporting locally made products forget about it, it’s not that easy. You need to find contacts on the ground in your target countries. If your product is potjie pots and your market is South African expats then you need to start reaching out to people in countries where there are large South African communities. There are various ways to meet contacts in other countries, but the most effective will cost the most money, which is visiting trade shows or having a sales office in the country or region. Without a lot of capital, you are going to have to find a way to network with a local, whether agent or distributor that can help you reach local clients.
Another way to market your business effectively is to find out how this type of business is conducted and try to have people approach you. Let me give you an example: an overseas company wants to buy a product from a local supplier, but said supplier does not export, that supplier can then put you in touch with this person saying you specialise in exporting this product.
A lot of Cape Town’s businesses are notoriously unambitious where they basically don’t care about anything else but they people that come to their doors and I know of people doing this business in Cape Town. By sourcing goods from local suppliers and then exporting it and even if the company is already exporting, you will still get the business as this is a business built on trust.
Make sure to keep an eye on ActionPlan as we may publish a detailed step-by-step guide on exporting locally made products, with a mini business plan, business model and forwarding and clearing strategy as well as looking at the various trade treaties South Africa has with other countries and how to look for opportunities.
|Guide||Made in Mzansi – Products Made in South Africa
How to Find Ideal Export Markets for South African Products
|Sector||Import & Export|