Cross border trading business is a low capital business to start in Zimbabwe, and can be very rewarding if done properly. The key is to identify which products to trade, and have a good marketing strategy. It’s a numbers game, the more goods you can sell, the more profit you earn. Top destinations of Zimbabwean cross borders traders include South Africa, Botswana, Mozambique, Zambia and Tanzania.
What is needed to start the business and costs?
Lots of travelling time is needed, a passport and obviously money. The cross border trade includes a lot of options that you can pick from including selling shoes, clothes, household goods, toys, furniture, fridges, groceries, cosmetics, gadgets and gym supplements. This business involves a lot of risk ranging from accidents, theft and exorbitant duty charges. Thus it requires a lot of research and first hand information from veterans. The first essential thing that you need is a base of operation and this can be a table in a shop, a flea market space or the whole shop depending on your capacity and capital. These will cost you from $300. Flea market spaces can be shared so you can divide the rent by two. Other traders chose not to have a site of operation. This is because they only go outside Zimbabwe to buy goods which have already been ordered by clients. Thus there is no need for a table.
Some cross border traders sell their products door to door in different households e.g. when selling clothes and kitchen utensils. Some sell at their work place where they are also an employee by giving co-workers on credit then collecting the money at month end. If you are going to be buying from South Africa then transport will cost you about $25 (One way: Harare-Mussina) and $50 (One Way: Harare-Johannesburg) without including the price of luggage. Goods will pay up-to 60% duty at the border. The buses charge goods depending on size and value for example a bed will be charged about 500Rands from Musina to Harare.
Some cross border traders prefer to use trucks on the return journey because they are usually cheaper when it comes to your luggage, but trucks are slower and can be delayed due to a lot of paper work. Trucks also do not guarantee the safety of your products while some buses on the other hand insure your products and will compensate you in the event of a loss. You will need at least $600 minimum as startup capital so that you can order enough goods to avoid loss due to transport and duty expenses.
Market and Marketing strategy
First of all you need to find a good location where your sells are high. This can be in high density surburbs e.g. Budiriro, Mufakose, Glenview etc. You can also sell where there are a few established shops e.g. rural areas and gold panning areas are very profitable. One strategy you can employ is to use music. The music you play must be in sync with your ideal kind of customer. For example if it’s in remote areas, rural areas and Gold panning areas, people enjoy the fast paced local music. If you are targeting the youths then conscious, hip hop and R n B will be the best. In some instances people will buy from you simply because you are playing gospel music which makes you an honest person to them.
The other strategy is good conversation which other sellers take as far as flirting with customers. It is good to interact openly with the customer by even sharing a joke or two to make good chemistry so that you can show your customer your best offers. Suggest a discount to them if they want to buy many goods and have room for negotiating the price. If you have good communication you will definitely have customers coming back to you because you make them feel special. The other way to market is to display a lot of fancy stuff in the front to attract customers e.g. sweets, bright balloons, parker pens which look attractive or even chocolates. Chocolates will attract a child to your table while the parent will see the shirts making it a double header.
Always conduct market research by asking your customers what they like because fashion is always changing with time eg these days people prefer slim fitting clothes over baggy stuff. The table set up should also be right so that your best products are easily visible and eye catching. Pricing is also very essential if you are to get a sale but never under price too much than the rest as this leads to price wars and no profit by the end of the day.
This business requires you to take all costs into consideration including transport, time, rent, duty and even the money you used for food and airtime so that you can be able to determine your actual profit. It is not just about buying and selling at a higher price. Very detailed pen and paper calculations and reviews must be made all the time. The flea market business can be very profitable and sometimes profits fluctuate according to seasons for example more people will buy during holidays and month end so you need to be able to meet the demand in these times by having more stock. Let us say you purchase something for a total of $10 including duty and resell it for $15 this means you have made $5 profit. You definitely cannot live on $5 but imagine selling 50 such items in a week, that would mean you have made a profit of $250 in a week less transport and other operating costs. To increase profitabilty you should reduce your trips thus lessening your transport costs. This means that you should buy in bulky when you order your stuff, so that the goods can last at least 1 month.
Tips for running the cross border trading business
Always stay legal and safe, pay the correct duty as many have had goods seized by Zimra after failing to pay when someone had promised smuggle their goods. Do not buy and sell perishables. Avoid over spending on your trips. Always use public transport as it is safer and more reliable. Grow your capital to increase stock and reduce transport expenses. It’s better to sell your goods on cash conditions rather than on credit. Customers who fail to pay their debts may bankrupt your business.
We wish you the best in your cross border trading business. Check out more business ideas and our collection of business plans. Like us on Facebook, follow us on Twitter, and subscribe to receive notifications of new posts in your email.
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