By Michael Wood And Sane Mdlalose | From HowWeMadeItInAfrica

Competing in the FMCG space is a survival of the fittest and the fittest are often the established giants of the manufacturing world who have oodles of cash flow to back supply and demand needs. Historically, manufacturing is an industry that has supplied employment opportunities as well as contributing to the economic growth of a country. It is a well-known fact that the majority of employment opportunities in South Africa arise through the growth of small to medium enterprises.

Research shows nearly 90% of future jobs will be created by small and expanding firms. Presently, SMMEs account for 68% of private employment. This is a great incentive for larger retailers and manufactures to support SMMEs because in a cyclical manner it encourages consumer spending. People who are unemployed don’t buy products, but that’s not the only opportunity for big retailers to support small business.

Smaller local brand manufacturers, while they may have a great product, battle to break the barriers that exist in the retail industry today. Without larger firms helping to break ground for SMMEs in the retail and manufacturing space, our market faces stagnation.

The barriers facing small manufacturers:

You have to pay to play – smaller manufacturers need to come to grips with the complex system that makes up South Africa’s retail market. There’s supply and demand expectation at a retail level; smaller companies need to stock timeously and achieve a 95% delivery target. This becomes complicated because distribution is either at a regional level or at a national level, SMMEs cannot simply supply the odd store here and there. Secondly there are rebates or listing fees which need to be paid in order to compete in the specific market category. Once you are actually on the shelf competing for elbow room, SMMEs then have to pay for their own in-store and out of store marketing activities.

Read more at HowWeMadeItInAfrica