eBusiness Weekly
Kudzai Mubaiwa
Trading, or buying and selling, is the most basic of enterprises. At any stage or level, one can engage in this activity in which they source goods, put a mark-up and on sell to others who do not have time or knowledge or means to source for themselves but have need of the goods in question.
Capital required tends to be nominal and within reach, and if there is limited selling points, the demand for sophistication in ordering, supplying and distributing is low. As a result, barriers to entry to this kind of business are low, competition across levels is high, and margins are thin.
Vendors abound in the city centres, outside shopping malls, in residential areas, engaging in retailing a range of products whose prices are fluid. Small shops are common place in many buildings and we have very few retail giants — for not many can risk the high pressure and competition that comes with trading.
The trader is but a middleman who off-takes goods from one and passes them on to another. They do not necessarily make available the intrinsic value of product; theirs is to deliver a finished product to one who needs it. It is thus safe to conclude that power rests in the one who makes or produces things, and has greater sway in supply and price.
The difficult economic season we have gone through as a nation in the past two decades has brought many big producer brands to their knees.
There are many names we can speak of that were practically monopolies in their prime, enjoying the patronage of almost all retailers. They were giants that produced brand names in bread, dairy products, dry food commodities, meat, clothing, shoes, hair products, toiletries, matches, stationery, soap, paint and whatever else you can name.
They failed to compete at all when imports entered the fray. Many of their struggles emanated from efficiency — or perhaps more fittingly inefficiency — as they had archaic equipment, reduced skills, inferior technology and irrelevant business models. They folded completely or operated at low capacity utilisation.
Many blamed low capacity utilisation on external factors and did not consider the internal ones. We have the benefit of hindsight and this shows us some key lessons from the old time manufacturing companies that still stand, and the new ones that have strongly emerged.
Play the long game. Producers are patient people. They are the primary players in the value chain that impact the quality of produce and value add. They are sources and critical in the economic cycle. Patience pays, no brand is built overnight. I have observed with fascination that many major businesses have tended to thrive in their fifteenth year in Zimbabwe.
The brands grew with time. Similarly, those that fell on the wayside did not push through time. Our people are quite loyal to quality and their palates sensitive to changes in food products especially. Consistency is key, and a quality product with a decent price always wins through simple word of mouth and testimonials. Do time in the space you choose and build feature by feature, your success will be guaranteed as people have become more open to new players. This economy will reward those that are truly in it to win it and continue to iterate and get better.
Invest in tools. Certain companies will never again be able to compete while they still hold on to their machinery from twenty years ago.
The new entrants have the advantage of investing in current technologies and get modern tools from the get go. It goes without saying that using a motorised vehicle is better than an ox — drawn cart.
This will translate to faster and better production, better product and better price. Tools of production are changing from heavy machinery, to small equipment that does much more.
This economy will reward those that deliver the best quality product, in the shortest possible time, at the most affordable price. Find out where those tools are and acquire them for yourselves. No one can out-compete efficiency.
Invest in people. In the years I was an investment analyst with two different banks I observed that certain listed companies had lifetime leaders.
I imagined this was due to a need for experience to steer the ship steadily and for a select few it worked out. In the instances where it did, experience had been mixed with continuous education and continuous exposure.
This knowledge was practically implemented and worked wonders in ensuring the companies stood the test of time, deftly changing the business model as was necessary.
Still many more continued as they had always done and failed to be flexible to the need to produce different types or strains of product because they personally fought change.
This economy will reward business leaders and founders that think on their feet and apply what they learn from education and exposure to their profit.
Be glocal — a combination of global and local. This simply means benchmark yourself using global standards so that you can compete with other products across the world. Simultaneously, still serve the needs of local consumers and produce to their taste. The “Made in Zimbabwe” label still has decent worth outside our borders.
There is a lot of uniquely Zimbabwean handicraft that is adored worldwide, friends tell me that our product particularly sculptures; leather-work and handicraft are reputed for their perfect finish. Any new player that can produce competitively has a fighting chance.
Ultimately, in every sector – opportunity for the small player awaits. Pick any sector and do the best you can, with an understanding that even when you fail, you will fail forward, learn and come back better.
In the digital age, more of us have access to global trends and technologies. (There is a whole maker movement that is emerging, where production of all sorts of things is done using 3D printer in small makers-paces, homes and shops.) The one who makes things — both tangible (goods) and intangible (like content) will always have the upper hand over the one who merely sells them.
Identify a niche and run with it. Even the most experienced of players are always acting as if they are back at the starting line, and anyone who can endure the marathon, not sprint, that business is will prosper.
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