Q Starting a Fair Trade import business
I’m thinking of starting a business that would import FairTrade products from developing countries and sell them on in the UK by mail order. What do you think some of the challenges might be that I’d face?
If you are thinking about starting a business that specialises in fair trade production and sales, you need to avoid some common pitfalls, which I’ve identified having coached a number of businesses in this area. Problems include...
- Inconsistent quality level in production and orders received
- High costs related to shipping and production with small orders initially
- Ability of manufacturing team to deliver new orders on time with speed
- Insufficient investment to successfully launch and grow the brand
- Too much time spent on packing mail order packages at home versus time spent on marketing and PR to showcase product
To combat these challenges I suggest you carefully consider the following...
Have you identified a suitable fair trade producer or do you plan to start your own manufacturing plant? Have the standards been quality checked and certified as Fair trade? Is there a good manager in place to manage the quality and efficiency of the production line?
Do you have sufficient cash-flow and orders to justify and sustain the importation of products from the manufacturing base? Have you got stockists secured or/and do you plan to retail directly? What is the minimum threshold for making the business sustainable?
What is the frequency and speed of delivering products to meet demand? Is there a good and reliable supply chain in process to meet new orders?
Who are the competitors in the UK for the type of product you are selling? How does your product compete in terms of quality and price? What makes you different?
How do you plan to manage the sales and distribution of the mail orders in the UK? Is it going to be managed from home or are you going to use a distribution company such as DHL?
Do you have a good marketing and PR strategy in place to tell the story about your brand? Fair trade products tend to raise their profile through telling the story behind the brand e.g. the impact the brand makes on the workers in the developing countries. Check out brands like Cafe Direct, Divine Chocolate and People Tree for inspiration!
If you are entering the manufacturing or retail market, then fair trade is definitely the way to go, but make sure you have sufficient finance and skills in place to achieve the above! Check out other Fair trade brands, and learn from the leaders in the profession to avoid mistakes. Follow their lead!