Start-up importers face uphill battle

Big source markets such as the United States do not recognise South African importers as major market players which means new start-up importers such as EZCARE often have to educate suppliers about the potential in Africa before any trade negotiations can even take place. “However, mention the words ‘trade gateway into Africa’ and doors will open,” said Joanne Horwitz, founder and director of EZCARE, which supplies health and well-being products to the care-giving industry to help them improve the quality of life of those in their care. The products are mainly imported from the United States and China and each of those brings its fair share of challenges, particularly for start-up companies, she said. “I am still developing a market for my products in South Africa and so I don’t have the big quantity orders yet, nor the capital to bring large amounts of stock into the country. Sourcing just a little more than sample stock at the best possible price is therefore a rather daunting task,” Horwitz told FTW. The US makes great specialised health products but the goods come at a premium cost as only small stock quantities are produced, she told FTW. “China on the other hand offers far more stock, and therefore better pricing, but has big minimum order quotas.” For example, sourcing stock from China carries a minimum order quota of either 300 units or an order value of US$5 000, or a combination of the two, she said, adding that the minimum value order was generally the best bet. “It helps with determining the price and value of the goods to the distribution market and importers can work according to a clearly defined budget,” Horwitz said. Another challenge for a new importer is finding the right kind of advice and assistance from clearing and forwarding agents on the most costeffective and timeous supply chain solutions, particularly when sourcing from at least three or four suppliers in sometimes different regions within a country. “I worked closely with a big freight forwarding company and yes, I was in touch regularly to find out about cost implications, regulations and more because I needed to find the best value proposition. They eventually simply stopped taking my calls because I’m currently a small player and therefore not worth the trouble for them I suppose,” she said. She then contracted a much smaller freight forwarding company that had no understanding of how to handle consolidated loads. “Eventually I decided to educate myself and handle a lot of the clearing and forwarding responsibilities myself. To date, I’ve had no issues. But I think it’s very short-sighted of companies to turn new business away simply because it doesn’t currently offer the volumes.” Top tips for startup importers • When importing from the United States (US), always ask how a shipment will be delivered and ensure the clearing agent/ freight forwarder has the capacity and capability to correctly handle the shipment. • There are companies in the US who will take on the sourcing, collation and shipping of products, even for small startups. • Always research minimum order quotas to ensure you get the best value for the price of the imported goods. • Even companies working with clearing and forwarding agents should do their homework around the paperwork, required permits and other regulatory issues, to prevent shipment delays, additional duties or having their products confiscated. • Know that shipment rates vary during different times of the year (September to December is peak season and carries a higher rate). • When researching a new product for potential import, Amazon has great (and honest) customer reviews. • Be aware of different cultures and cultural sensitivities in each import source market and respond accordingly; it will go a long way in trade negotiations. • All start-up businesses should look at getting business mentorships, whether through formal organisations that have mentorship programmes in place or by very proactive networking. INSERT & CAPTION Mentioning the words ‘trade gateway into Africa’ opens doors for SA importers in the United States. – Joanne Horwitz