The Sunday News
Mandla Moyo, Business Reporter
THERE is a need for Small and Medium Enterprises (SMEs) to acquaint themselves with suppliers so as to eliminate over-reliance on intermediary in their bid to ensure the competitiveness of their products on the market.
Speaking at a SMEs packaging seminar organised by ZimTrade recently, a consultant on export packaging Mr Andrew Daka said there was a need for emerging entrepreneurs to purchase their products directly from suppliers or manufacturers so as to cut on intermediary costs.
“As an SME it is important that you meet all the people who supply you with your products because if you don’t do that by the time the product gets to you its price will be double its manufacturing price. Everyone along the supply chain would like to put their mark-up which is usually around 25 to 30 percent, which in turn affects the price of your product. Therefore by meeting with your suppliers you get a chance to find out the actual price of your product rather that handing over the task to middlemen who will also be out to make a profit for the job done,” he said.
Mr Daka said shunning middlemen and engaging suppliers directly affords SMEs an opportunity to negotiate for better prices as well as flexible payment plans.
The term middleman is an informal word for an intermediary in a transaction or process chain.
A middleman will facilitate interaction between parties, typically for a commission or fee.
Mr Daka said there was a need for SMEs to improve on quality and standard of their products to enable them to penetrate international markets.
“As an SME once you know the packaging requirements of where you want to send your products, it makes it easy for you to work on meeting them. In some areas like the European Union market if a product fails to meet the standards it is rejected and destroyed, which might lead to a loss on your part hence you must understand that,” he said.
The Standard Association of Zimbabwe has embarked on an extensive training programme of ensuring SMEs improve the standards of their products for export markets.
Mr Daka said there was a need for big companies to assist SMEs in their endeavour to grow so as to increase their contribution to the country’s economy.
@mandlamoyo3
