Compiled by Cara Bouwer & Masego Lehihi-Makuva
It’s a niche market and a risky, competitive business, but Kedibone Mabasa and Kim Vermaak are succeeding in SA’s tough corporate gifting industry.
The embossed folder from that sales conference; the thermal mug your received in your corporate Christmas stocking – they may seem like blips on your radar, but all are effective forms of corporate branding. And for Kim Vermaak, founding member of Belle Regalo and Promoshell Corporate Promotions partner Kedibone Mabasa, these goods are the lifeblood of a competitive service that is used by almost every company in South Africa, Large or small.
Take for example, Vermaak’s true- life request for stress balls in the shape of an airplane. Breathing life into the concept usually starts with a call to the corporate gift specialist from a client or more typically, an advertising agency, communications company, event co-ordinator or public relations firm. Your expert gifter then gets into gear by obtaining quotes.
According to Mabassa, competition is tight, so a modest mark up of about 20 percent is realistic. Vermaak however, points out that she generally has volume based mark-ups, “so the client gets a discount for higher volumes as my costs per items are reduced with higher volumes.”
After the client has signed off one of several quotes, the corporate gift supplier jumps into action, sourcing the products from and array of merchandisers and arranging for branding, personalization and ensuring timeous delivery.
“This is a very risky industry and a lot of corporate gifting companies have a deposit and/or cash-on-delivery payment policy,” Says Vermaak. “Some companies will not commence branding until the goods have been paid for. Over 90 percent of my clients pay a 65 percent deposit and the balance to clear in my account before I dispatch the goods.”
Hopefully all goes according to plan – that is, the airplanes come out looking like 747s and not the starship enterprise. Hiccups do occur – delivery might be affected by a strike or lack of stock – but, as Vermaak says: “if we made lots of mistakes, we would no longer be in business.”
“There is a lot more to corporate gifts than just buying and delivering,” agrees Mabasa. “As a woman, your charms won’t get you anywhere in this industry. You need to have knowledge.”
Mabasa, who joined Promoshell as a debtors clerk in 2002 and worked her way up to a partner, is frank about the pull her company now exerts as a black economic empowered (BEE) organization.
“It’s definitely helped,” she admits. But, Mabasa points out, big companies such as Eskom, one of her and partner Kim O’Connor’s larger clients, do regular audits to ensure companies aren’t fronting. Once it is satisfied that you are legitimate, however, Eskom offers incentives such as 14-day payment plans – a boon in an industry where it is not uncommon for payment to take anything from 30 to 90 days.
“There are many companies whose payment structures means that they don’t inject cash flow into small business,” says Vermaak, who started her company in 2001 as a single woman with a child on the way and the father firmly out of the picture. “Small companies are funding big companies.”
But the “plum” accounts are still worth chasing, says Vermaak, a consummate marketer whose clients include Anglo American, the Department of Housing, Group 5 Projects and the Gordon Institute of Business Science.
Imports are another touchy subject in the industry, says Mabasa: “We get quotes from both local and imported goods; then it’s up to the company to decide.” But some companies are taking the lead. “We just signed a contract with Eskom that states that we must support at least 70 percent local products.”
Companies are driven by budgets, so import if you must, says Vermaak, but add some local flavor with beading or crocheting from, for example The Hope Factory, a project that creates opportunities for people from previously disadvantaged communities to be trained in business, technical and life skills. An initiative of the South African Institute of Chartered Accountants, the factory has trained 388 unemployed people since its inception in 2001. For Vermaak, this sort of empowerment is as important as BEE, a road that she admits has been tough. With annual turnover under R 5 million, her company is a micro-enterprise, but Vermaak is not content with a R 5 million ceiling – “I want to go over R 5 million. We’re not there yet, but that is the aim.” And in preparation for bursting through that mark, Vermaak is ensuring that Belle Regalo is fully BEE-compliant for the qualifying Small-Enterprise category.
Promoshell’s turnover is less than R 2 million a year, and Mobasa’s eyes are fixed on growth as well. But we don’t want to neglect our existing clients, because they have been with us for a long time.” And in an industry where suppliers can have upwards of 900 names in their databases, keeping existing clients happy is just good business.
So, too, is knowing how to survive the usually quiet months of January and February, while bracing for the flurry of activity come October through to December.
A sense of humour is also vital. Asked about her advice for aspiring women entrepreneurs, Vermaak laughs: “Are you mad? Seriously, get three things: a shoulder to cry on, a person to boost your morale and a good accountant.”