Despite all the turmoil and challenges being experienced on all fronts during 2020, it is my view that the quote, “the more things change the more things stay the same” still applies.
Despite all the turmoil and challenges being experienced on all fronts during 2020, it is my view that the quote, “the more things change the more things stay the same” still applies. In the context of today’s blog, it means “the more things change, the more the BASIC business principles and philosophies stay the same”.
After all the quote was coined 170 years ago in France by Jean-Baptiste Alphonse Karr in 1849, the year after the French revolution.
As previously mentioned, most people and businesses in the world are currently experiencing parallel disruptive/chaotic events spearheaded by a pandemic and major economic turmoil. However, I firmly believe that we, as humans, have been given the ability to always create discipline from chaos and we will time-and-time-again, repeat history by finding solutions and altering and reshaping the way we do things to survive, and succeed! In this regard we are greatly assisted by the innovations and capabilities that are created through the “fourth industrial revolution”.
Businesses operating in the critically important import/export landscape should continue applying good business principles and maintain existing and established business relationships.
Let’s quickly recap why importing/exporting is a vital economic activity of any country:
It boosts development & reduces poverty in countries through increased commercial opportunity and private sector development that in turn leads to the generation of new growth. This ultimately generates growth in foreign exchange earnings and broadens the tax base!
It enhances competitiveness as companies are compelled to reduce cost of inputs, acquire new finance through investments, increase product value-add/innovation, and drives them to move up the value chain!
The opening of new markets is driven by a country’s willingness to open its doors to global trade opportunities. This in turn results in the expansion of opportunities for local companies.
Here are my 5 tips for Importing/Exporting companies for 2021.
TIP 1: Broaden your knowledge base regarding global trade:
It is vital that you stay abreast of latest developments, especially as it relates to the digitisation evolution in global trade.
Tip 2: Choose the right specialist service provider:
Choose a specialist service provider to enable your company to have access to expert skills and information 24/7. This will greatly assist your company to be both effective and competitive.
Tip 3: Fully Understand all the components of costs and charges:
Ensure that you fully understand all the components of costs and charges as it relates to both the physical and financial supply chain elements of your transactions. This will include:
The total cost included in overseas payments and the cost of Foreign Exchange transactions. This is often taken for granted and financial institutions take advantage of clients not always fully understanding all the layers of gross-border payment charges.
Cost of freight payments and the cost of clearing your goods. Ensure that you are getting fair pricing in this regard.
Ensure that the correct marine insurance cover is in place at a fair price. Inadequate marine insurance can be disastrous.
Tip 4: Protect your company:
Protect your company against any risk of non-payment by overseas importers if you are an exporter and ensure that you receive the correct quantity and quality of goods if you are an importer.
Tip 5: Be conscious regarding your risks and exchange rates:
Always be conscious about the importance of the exchange rates and actively manage the potential risks to your business relating to volatile currency rates fluctuations.
For Importers, there is no point sitting back hoping for exchange rates to improve, in order to be competitive. Judicious use of hedging instruments like forward exchange contacts can be most beneficial.
To whatever 2021 may have in store for us, we can always count on the basic principals of business and philosophies to carry us trough the turmoil and towards a more prosperous future. Together we can build South Africa's Economy.
Contact BeztForex for skilled and experienced representatives, that will provide you with incredible foreign exchange and global trade solutions. Start your 2021 on the right track to success.