Connect with us

Entrepreneur Today

Buyer Beware When Dealing with the Far East

Get the Best Deal when Importing Manufacturing Machinery from the Far East.

Entrepreneur

Published

on

China-Flag

Imagine spending hundreds of thousands of US dollars to import rollforming machinery from the Far East, only to discover upon its arrival, that the machine does not work and cannot be fixed.

Many businesses, daunted by the high cost of metalforming equipment, decide to buy from the Far East. Their reasons are twofold: prices are often far lower than their American or European counterparts, and local engineers often do not have the experience for advanced machines such as high speed lines with in-line punching configurations.

Once burnt, twice shy

Greg Fuchsloch, CEO of Metalforming Technologies South Africa, has been in the metalforming industry for 18 years and has seen local entrepreneurs forced to shut their doors after buying insufficient machinery from the Far East.

“One client only realised after the machinery was installed that it couldn’t run the material he had bought at a value of R2 million,” says Fuchsloch. “The only way to rectify the problem was to either buy a new machine or buy new material.  It simply would not rollform the material that the client intended profiling.”

According to Fuchsloch, if the price seems too good to be true, there is something to be concerned about.

So, is it possible to procure good quality equipment from the Far East? Fuchsloch believes it is. “It’s possible to find well-made machinery at lower prices, but you need to know exactly what you are looking for and where to go. Take the time to do plenty of research and visit each machine builder personally, even if it means visiting upward of forty manufacturers.”

Choosing the right equipment

Fuchsloch shares five tips on what to watch out for when sourcing a good deal on imported equipment:

1) Can replacement parts be found in South Africa?

Before purchasing any machinery, look carefully at each component and ensure replacement parts can be sourced locally. Some parts and components in the machines are critical in their design, and it is not worth taking a chance with cheaper, poorly designed alternatives. Look specifically at PLCs, electric switches, electric motors, drives and hydraulic components. Ensure the product list is detailed and steer towards brand name components. They may cost a little more initially, but the machines will stay in good working order for longer.

“While you’re at it, double check that all of the components used are authentic,” says Fuchsloch. “In many cases, known brand components are not supported in theFar East.”

2) Get a service agreement and warranties

Take special care when looking at the service agreement. Some manufacturers offer a one year warranty on paper but will refuse to replace the part when it breaks, suggesting the component broke through operator error. The supplier must agree to fly out a technician within a few days and at their own expense, or work with an approved local company who is able to service or repair the equipment.

“A local company recently bought four machines at a very cheap price from the Far East,” says Fuchsloch. “Three roofing panel machines and an insulated panel machine, none of which were in working order when they arrived.

“The client thought it was a small problem and brought in an engineering company to look at the machine. They were unable to fix it and so turned to me to see if I could help. After looking at the machines I determined that they were so poorly designed that the components could not even be used separately.

“The only option was to dump the machines and start over. The client wasn’t happy with my findings and showed me the door. Unfortunately his business didn’t survive this very expensive lesson.”  Be sure to inspect the machines in theFar Eastbefore shipment.

3) What is the delivery date, and what are the repercussions for late delivery?

Have precautions in place for possible problems such as late delivery. Ensure that the company you are dealing with is proficient in English and able to communicate your requirements and any possible future problems you may experience.

“Alternatively use a local company who deals in machinery, who knows the lay of the land and has done this many times before,” says Fuchsloch. “You might pay a little more up front, but it will save you a ton of heartache, lost production time and money in the end if you buy from a reputable company.”

4) Is the supplier also the manufacturer? 

Not all Far East manufacturers have an export licence and so they use a local middle man to manufacture the machinery. It’s hard to tell which one you’re working with, especially when the massive factory floor is filled with many machines you assume are made on the premises or at least by the same company. The agent often doesn’t have the technical expertise to answer your questions or adequately understand your requirements.

Visit the factory yourself; there is no way around it. Make sure you see the factory and not just the showroom, warehouse or someone else’s factory. And take a translator with you  some bigger companies have staff who can speak English, but most of the technical staff cannot.

5) Get a technical manual in English 

Finally, Fuchsloch recommends getting a technical manual written in English. “It often happens that I get a frantic call from buyers who can’t use their machines because they haven’t been supplied with a manual and can’t figure out how to get it working,” he concludes.

Good deals are out there

Despite the obvious obstacles, Fuchsloch does believe that it is possible to find a good deal if you’re prepared to put in extra time and money to research what you are getting, or work with an established and approved company with years of experience.

Metalforming Technologies SA has offices both in South Africa and in China. For more information please visit http://www.metalformingtechsa.com/

Entrepreneur Magazine is South Africa's top read business publication with the highest readership per month according to AMPS. The title has won seven major publishing excellence awards since it's launch in 2006. Entrepreneur Magazine is the "how-to" handbook for growing companies. Find us on Google+ here.

Advertisement
Comments

Entrepreneur Today

This Is A Call To The Curious – Applications For The Allan Gray Orbis Foundation Fellowship Programme Are Open

The Allan Gray Orbis Foundation is calling on all young, entrepreneurially-minded South Africans to enlist in the most comprehensive and stimulating Fellowship opportunity in Southern African. Applications opened on 22 January 2018.

Entrepreneur

Published

on

allan-gray-orbis-foundation

The Foundation takes a holistic approach to entrepreneurial development and believes that entrepreneurially-minded individuals with ethical values and strong leadership skills hold the key to change in South Africa and the globe. The Foundation supports entrepreneurs to improve the socio-economic landscape of Southern Africa. Further, it provides youth who demonstrate the highest potential access to education and assists them with cultivating an entrepreneurial mindset.

The Fellowship’s entrepreneurial and personal development programme runs throughout the academic year alongside the Candidate Fellow’s university studies. The Fellowship provides access to university education and includes comprehensive tertiary financial support to selected students.

Criteria for Grade 12 Learners

  • Level 5 in Pure Mathematics for Grade 11 final results
  • Level 6 average for your final Grade 11 results (excluding Life Orientation)
  • Completion of the National Benchmark Test by 30 September 2018
  • Under the age of 21 in your application year
  • South African citizens.

Related: 10 Young Entrepreneurs Under 30 Share Their Start-Up Secrets

Intention to study towards a degree in Commerce, Science (excluding Medicine), Engineering, Law or Humanities (majoring in Politics, Philosophy or Economics) at the University of Witwatersrand (WITS); University of Johannesburg (UJ); University of the Free State (UF); University of Cape Town (UCT); Nelson Mandela University (NMU), Rhodes University; the University of the Western Cape (UWC); University of Stellenbosch or the University of Pretoria (UP).

What it covers

  • The full cost of university tuition
  • The full cost of university accommodation, meals, books and tutor allowance
  • A monthly living stipend
  • Academic support and access to entrepreneurial and personal development programmes
  • Mentorship from individually assigned Foundation staff as well as business mentors
  • Access to potential postgraduate funding for graduated Candidate Fellows
  • There are no postgraduate contractual obligations with the Foundation.

Related: 9 Top Tips For Young Entrepreneurs

How to apply

Visit www.allangrayorbis.org to download an application form or SMS “Gr12 and your fax number or email address” to 36777. The application closing date is the 11 May 2018.

Watch this video to learn more about the Allan Gray Orbis Foundation. More information is available at www.allangrayorbis.org and www.facebook.com/allangrayorbis.

Continue Reading

Entrepreneur Today

Facebook Launches A Classifieds Marketplace In South Africa

Facebook has launched Marketplace in South Africa, offering users a single destination on Facebook where they can easily discover and buy and sell goods with other people in their local community.

Entrepreneur

Published

on

facebook-marketplace-south-africa-2018

Available in 47 countries, with more than 550 million people from around the world visiting Facebook to buy and sell goods each month, Marketplace makes it easier for people to trade with others on Facebook.

Using Marketplace

  • To use Marketplace, tap on the Marketplace icon
  • To find what you’re looking for, search at the top and filter your results by location, category or price
  • To sell something, take a photo, describe your item, set your price and you are done
  • Buyers and sellers can communicate with each other using Facebook Messenger.

Related: 10 Motivational Quotes from Facebook Genius Mark Zuckerberg

Trading Safely

Facebook helps you trade safely on Marketplace by offering safety tips, privacy controls and easy-to-use reporting tools.

Top tips for trading safely on Marketplace:

Commerce Policy

Items, products or services sold on Facebook must comply with Facebook Community Standards and Commerce Policies. Please view the list of items prohibited on Facebook.

Verify the item

When buying an item, examine it carefully for quality, condition and authenticity before paying. For high-value items (watches, luxury bags), consider requesting a certificate of authenticity or proof of purchase.

Related: How You Can Avoid The ‘Facebook Effect’

Be shipping savvy

facebook-shipping-productsIf the seller offers to ship the item rather than exchanging it in person, you may not have the opportunity to verify the item before completing your purchase. You can use a service such as Standard Bank’s Shepherd to arrange safe payment and shipment. Shepherd keeps the money for a transaction in a trust account and releases it to the seller once the buyer verifies he or she has received the correct item in good condition.

Meet in a safe location

Don’t invite buyers or sellers to your home. Meet in a public place like a coffee shop or the mall. Before going, tell a family member or a friend where you will be, bring your cell phone, and consider asking another adult to come with you.

Use cash, COD, or person-to-person payment methods

Buyers and sellers may offer or accept cash or person-to-person (P2P) payments. If you choose to pay electronically using EFT, avoid payment links and log in directly through the payment method’s website. If the value of the item you intend to buy or sell requires a significant amount of cash, you might consider using a person-to-person payment method, such as PayPal or FNB eWallet.

Protect your privacy

Don’t share your financial account information (example: Payment login and password, bank account info) with buyers or sellers. Additionally, make sure your Facebook Privacy Settings are up-to-date. These settings help limit what other people can see (example: status updates, location, photos) on your profile page and what you share on Facebook.

Report someone

If you’re having a problem with someone in Marketplace, you can report them.

Continue Reading

Entrepreneur Today

5 Things SME’s Need To Be Thinking About In 2018

In 2018, small-to-medium-sized enterprises (SME’s) will be looking for a glimpse of inspiration to chart a new growth path and scale their businesses. This is off the back of a tough 2017 and previous years which have inhibited the growth of local SMEs.

Entrepreneur

Published

on

small-business-management

In 2018, small-to-medium-sized enterprises (SME’s) will be looking for a glimpse of inspiration to chart a new growth path and scale their businesses. This is off the back of a tough 2017 and previous years which have inhibited the growth of local SMEs.

Jesse Weinberg, Head of the SME Customer Segment at FNB Business says “Small business success becomes a monumental task when there’s arguably very little to no real economic growth overall. However every challenge presents an opportunity, and in South Africa, not only are we fortunate to consistently have SME development as a key objective on the national government agenda, but most corporates are also  hungry to shift spend to smaller businesses as part of the procurement policies.”

Weinberg says as 2018 begins in earnest, there are some important insights that business owners should consider in order to grow their businesses.

The digital economy is in full swing

SME’s that are comfortably operating without adopting digital technology in their business will likely be outperformed by their competitors unless they adapt to the current reality. Across the globe, consumers and businesses are rapidly migrating services to digital channels for its sheer efficiency, convenience and scalability. This includes basic elements like digitising accounting processes with software, through to using social media to campaign to customers.

If you’re ever unsure where to start, start by observing your customers and listening carefully to how they expect to be dealing with a business like yours – you can’t go wrong by putting yourself in your customers’ shoes and then reflecting on your business through their eyes.

Related: 4 Unique Marketing Ideas For SMEs On A Budget

Expect little to no help from the economy

The Word Bank recently predicted that SA will grow at roughly 1.1% in 2018 and while this is not cast in stone, it’s a relatively firm indicator that SME’s will have to do the hard yards to engineer any form of business growth. The focus should thus mainly be on differentiating your business, products or services from your competitors through marketing or even innovation if possible.

Maximise your banking relationship

Banks are investing a lot of time to understand the needs of businesses and have some of the tools to help SME’s run efficiently. The relationship should not be only be limited to just banking. With the multitude of rewards and value-add services offering by most banks, with just a bit of time spent understanding the offerings, great value can be derived for you and your business. Examples of these offered by FNB include eBucks rewards, free Instant Accounting software and CIPC registration services.

‘Think Local, Act Global’

Your business may be based in South Africa but its potential to scale shouldn’t be hampered by your location. In other words, be open to the opportunity of growing your business beyond South African shores, especially if your service or product has universal appeal and relevance. With global marketplaces such as Alibaba and AirBnB, the world market has never been more accessible and easier to do business with.

Related: SchoemanLaw Shakes Up The Legal Industry To The Benefits Of SMEs

Avoid the race to the bottom

Market forces continue to show that consumers aren’t only focused on the cheapest product or service despite the tough economic conditions. These days offering great service will build trust and loyalty with customers and keep them coming back. If you combine this with good quality, accessible products and services you will generally have an edge over your competitors offering the same or similar products and services.

“Even though 2018 is unlikely to come with an SME development boom, a solid homegrown business can still grow sustainably. More than ever, business owners need to arm themselves with as much information and insights as they can to grow their businesses or even reduce the risk of total business failure. With South Africa’s level of unemployment showing little to no signs of reduction, we need to sustain the spotlight on growing our SME sector and offering as much support to it as possible. SME’s represent one of the most effective ways to create employment in local communities, especially if these businesses find ways to trade with customers beyond their normal operating territories.” says Weinberg.

Continue Reading

Trending

FREE E-BOOK: How to Build an Entrepreneurial Mindset

Sign up now for Entrepreneur's Daily Newsletters to Download​​