SA Manufacturers: Restricting yourself to Rand sales only is probably costing you Dollars. Selling in the US is easier than you think
Navigating rough terrain
It is difficult being a manufacturer in South Africa.Your passion for your products is often overshadowed by feeling unsupported as a business owner even on home soil. Despite manufacturing being one of the largest industries and employersin South Africa, it is still a constant struggle getting goods to market.Imposed lockdowns and the realities of Covid-19 restrictions have severely impacted sales and government has made little compensations to struggling businesses.Even pre-Covidthe manufacturing sector facedserious challenges–worsening global competitiveness, an ever-fluctuatingRand making input costs unpredictable, uncertain supply chains and heavy reliance on imported raw materials, high costs of borrowingfrom indifferent bankersand the persistent turbulence in the labour market. Yetstill people have really great and often innovative products to sell. The home market is smalland despite your daily slog, your distributors and wholesalers profit far more from your
productsthan you do.Relyingon cash-strapped South Africans for salesis uncertain–most are enticed bythe ever-present cheap importsthat help them to stretch their budgets. You have tried selling to other African countries, but the largestreturns have been grey hairs –our neighbouringcountries alsocannot afford large quantities of your great product.
Stagnating on theplateau
Despite increasedworking hours andas school fees, you are simply ticking over your businessand giving away your profit margins.So,while the world’s economy seems to be recovering, at home everything seems to be stagnating. You must be wondering “where to next?”.This gloomy tale does not need to end here. South Africanmanufacturers canbe more profitable and compete GLOBALLYand retain their share of the profit margins. Afterall, South Africans are innovative,and many local manufacturers are producing world class products and at relatively great pricesdespite the challenges.Perhaps the innovation actually lies elsewhere and not in the manufacturing. Perhaps the answer lies further up the supply chain and perhaps the answer lies across the Atlantic.But how do you get there?
Reaching theLand of Opportunity
There is a reason why so many South Africans(and pretty much all other nationalities) have flocked to the USA. This is the proverbial land of opportunity. This is the land where millionairesand billionaires have been made. This is the land where shopping is king, a market where good products actually sell and where cheap imports have not completely overtaken the market. Surely, this is where a good, South African product should be sold?Thetruth is that it is not always easy to work in the US, however, it is easy to trade in the US if you know how to do so. Anothertruth is that Dollar-based saleshelp to buffer some of the uncertainty of yourlocalmanufacturing costs.As a loyal South African, maybeyou are concerned about moving business out of South Africa. In fact, manufacturinggoods proudly in South Africa while selling your goods to the international marketwillhelp to sustainthe South Africanmanufacturing industry so ensuring employment whileyou can still earn in Dollars. This is surely having your cake and eating it too?
Thinking locally and thriving globally
Besides being profitable, selling overseas can be an enjoyable experience. If you put in place the right processes and structures for your business, you will be able to maximise opportunities while minimising risks and costs. However,before looking to expand,you need to ensure that your foundations are stableand able to support an expansion strategy. Pivoting your business offshore requires your time and focus, but witha solid base and strategy and therighttiming, you canaim toincrease your profitsat leasttenfold. This no longer has to be a lonely journeyor guided by friends–seek out the rightadvice from those that know how to navigate abroad, those that canhelp you to achieve your desired offshore results. It is time to move beyond the day-to-day ticking over of your business and to reach new heights internationallyand to benefit from the potential in Dollars.If you are brave enough, you can leap at the opportunity to expand your business outside South Africa, even into the biggest market in the world.With the right help, it is conceivablethat you couldtake your productsoffshore in less than three months and grow salesoff the efficient base that you have developedin South Africa.Yes, it is possible.Stop counting Rands and come to your senses!
Marc Tison is Senior Vice President at SEED10X. His life’s vision iscentred on makinga difference in the lives of South Africans. With decades of experience in business operations across industries and strategically offshoringbusinessesin other countries, Marc is passionate about supporting entrepreneursto be successful.