Saudi Food & Drug Authority (SFDA)     

Established in 2003, the SFDA aims at “Protecting the community through regulations and effective controls to ensure the safety of food, drugs, medical devices, cosmetics, pesticides and feed”. What this means is that if a product falls under SFDA’s authority then it needs to meet their regulations such as quality control and packaging. Essentially, the Saudi Food and Drug Authority sets the safety requirements for goods to be imported and sold within the country. 

It runs its own online portal which has many different eservice branches attached to it, depending on whether food or drug is being looked at. In these portals, importers can enter manufacturer information and upload relevant documents which allow SFDA to confirm safety and quality standards and issue a notification number that confirms a certain good/product can be sold in the Kingdom of Saudi Arabia.   

Saudi Standards, Metrology and Quality Organization (SASO)

Initiated in 1972, SASO is a regulatory body focused on designing and approving national standards for goods, products, and services. It issues additional regulations and requires further documentation to ensure goods, products, and services are entering the market under approved standards. 

Further, SASO is the issuing authority when it comes to ensuring goods entering or exiting the Kingdom are correctly certified and upto the different relevant standards and regulations. To do this, SASO has implemented the Saber system which aims to accelerate delivery of the required conformity certificates for consumer products. 

Saber

Marketed as “Your gateway to the Saudi market”, Saber is an online portal to register products and easily obtain certificates of conformity. Where SASO issues advice regarding regulations and documentation, Saber is how these things are implemented and checked. After creating a profile, a seller can enter the product they are importing and gain the correct authorizations to quickly pass through customs.  

FASAH

Backed by Saudi customs, FASAH is the online portal used at customs. A retailer will upload documents received by SFDA, SASO and Saber onto their FASAH profile. These will then be seen by officers at customs which will expedite the releasing process.

Chameleon ERP is a business software that optimizes customs clearance and other processes. To learn more, visit https://chameleonerp.com/customsclearance-2/ 

1. Hire the right people 

Sound business advice in general but it’s magnified in customs clearance. A little mistake can cause several days of delays and lots of frustration. The best way to mitigate this risk and ensure a smooth, streamlined process is to be surrounded by knowledgeable, insightful people. Ideally, they would be industrial experts, Arabic speakers, and have solid contacts in customs to make sure they’re always following the latest guidelines.  

2. Keep an updated schedule of fees and penalties

Improvements and developments related to government bodies, ports, and customs clearance mean important factors such as fees, penalties, and terms & conditions are constantly being updated and revised. Make sure to always have an updated schedule as this will affect the client’s quote in terms of costs and delivery times. 

3. Intimately understand process flows and centralize verified documents

Documentation is the backbone of the customs clearance process. From start to finish, progress depends on having the right documents at the right times. Having a clear understanding of the process flows for entities such as SASO will improve your timing for document submission and minimize the risk of delays. Further, you can get an extra jump ahead of the competition by creating a streamlined workflow that includes the collection, verification, and organization of documents, certificates, and reports. 

4. Verify Packaging and help with the physical inspection

Most countries have regulations when it comes to labels and packaging and Saudi Arabia is no different. Each industry within the Kingdom has a different set of requirements which is why it is very important to have industry-based experts who can guide the client and clear cargo faster. The same expert should also help with the physical inspection and guide customs officers with any questions or queries they may have.    

5. Be specific and accurate with product descriptions 

Product descriptions are required throughout the clearance process but especially when entering details through online government portals such as FASAH. Customs agents use the description when conducting the physical inspection and missing or unclear language can delay the process and create unnecessary headaches. To avoid this, write product descriptions that are precise, succinct, and detailed. 

To avoid both scenarios, you need to have proper control of what’s coming in and what’s going out of your stores. Moreover, you want to know what your customers want and whether you are adequately providing them with it. 

Reasons behind overstocking/understocking:

• Bad processes 
• Bad Training
• Disconnected data
• Supplier issues including pricing

How to get inventory Right

1. Forecast Sales based on Historical Data – Great inventory management comes down to accurate demand forecasting. If you can predict sales, you can prepare accordingly.
2. Listen to the market – Track search trends to assess demand for your overall product category. By monitoring buyers’ search habits, you can determine if general interest in your products is increasing or decreasing and then adjust inventory.
3. Centralize Data – Avoid working on multiple spreadsheets, this will just get confusing. By monitoring stock from a single point, you can quickly determine when you need to restock inventory to fulfill orders.
4. Apply ABC analysis. This allows you to prioritize your most important items.

A: High-value products that represent a small portion of the total inventory

B: Moderate-value products that represent a decent portion of the total inventory

C: Low-value products that represent the majority of the total inventory

5. Analyze inter-departmental communication. It is essential that your supply chain flow smoothly with as few errors as possible. This is only possible when different departments are talking to each other and know what’s going on. 

6. Analyze Vendor Relationships and determine if there is an issue with your suppliers.

It is more important than ever to run a lean business. Costs need to be kept in check and the new normal is to be thrifty, productive, and efficient. Unfortunately, this philosophy has to extend to payroll and headcount, every position needs to be justified and add value. 

It is critical to regularly assess your employees and ensure that they are performing and growing, i.e. they are a contributing factor to a healthy work culture. One that runs as a meritocracy in which “good” employees are recognized, promoted, or empowered and “bad” employees are quickly discovered and removed from the environment. This is a foundational factor for a company that wants to stay lean and effective. 

The most common way to evaluate employee output are Key Performance Indicators or KPIs. A KPI puts a number to reflect how well that individual is achieving their stated goals and objectives. For example, if a goal is to provide above average customer service, you could use a KPI that targets the number of unsatisfied customer support requests at the end of each week. This measures progress towards an objective.

While KPIs are extremely important, managers may overestimate their value as some jobs are difficult to quantify. Looking back at the previous example, perhaps the customers the employee did serve were very satisfied and will return because of the staff’s attention, patience, and care. 

There are several other ways to evaluate an employee’s performance, such as:

• Quality of Output
• Creativity of Output
• Improvement over time
• Team and customer feedback
• Percentage of tasks completed

Owners and HR managers must decide on a holistic approach that combines KPIs with the individual behind the numbers. Further, they must also agree to apply the same methodology across the board to all employees. This requires an honest look at the worker and is usually backed by the numbers. 

It is important to maintain a regular schedule when assessing employees. While quarterly evaluations are ideal, they are time consuming and deflect attention from the core business. One should aim for assessing employees twice a year and seeing changes and improvements in the employee’s KPIs, attitude, and engagement. 

Conducting assessments and analyzing the results is the first step. Taking concrete and constructive action is the next one. If an employee is consistently underperforming it is imperative to understand the root cause. Perhaps the KPIs were not communicated to them or  they do not feel challenged enough, maybe the company has not offered them the right training. Similarly, single out exceptional staff members and understand the factors helping them succeed. Do they have a cheery disposition? Are they extra hard working? Are they working on commission? You may be able to apply some of this learning towards your other employees and turn their collective frown upside down!    

The most common issue is slow moving and excess inventory. This usually happens at the beginning of the year and end of a season when new products are demanded. It is better to clear your stock as opposed to clinging on to these items hoping that someone will suddenly buy them.

Here are some things to consider when discussing slow-moving and excess inventory:

• Cash is King 

Your business needs a healthy cash flow. As such, selling an item at a low margin or even a loss can be better than taking up shelf space.   

• Sell by 90 – 120 days

If items have not been sold within this timespan, find ways to get rid of them. 

• Hoarding hurts

The opportunity cost of keeping a slow-moving item is the possibility of stocking an in-demand item.   

• You are not alone

All retailers deal with slow-moving and excess inventory. If they can handle it, so can you!

With that, here are some great ways to convert slow moving inventory. 

Sales + Discounts

Popular and proven, cut the price and create demand for the good. You can try anywhere from 35 to 70% which seems like a lot but remember these items need to go. Examples of different sale types:

• Clearance sale
• Flash sale
• Seasonal sale
• Specific item sale

Bundle offers + Promotions 

Another popular option, bundling is when you take a group of products and sell them together for a slightly lower price than if they were sold separately, for eg meal combos at fast food restaurants. You protect your margin while moving merchandise. Examples of different bundling types:

• Bundle multiple units of the same product
• Pair slow-moving products with fast-moving products 
• Pair with complementary products

While there should be a prior contractual understanding, there is the possibility that the suppliers can facilitate returns or exchanges. Once the excess inventory is someone else’s problem, it is wise to analyze why the item was a slow mover, was it wrong for your market? Was it over priced? Under priced? Would you, in different circumstances, buy it again? What would you replace it with? 

Research shows us that customers’ buying decisions are heavily impacted by their retail experience. A majority of people make buying decisions in store rather than before. Fully stocking shelves encourages customers to buy more. Shelf management tools such as drop-in pushers or shelf-dividers make your shelves always appear fully stocked and encourage a healthy shopping environment. Generally speaking, products displayed on shelves at eye level have higher sales than those on the bottom or top shelves. Also, products with brand labels facing forwards, towards customers, generate more sales. 

Customers love shops that are easy to navigate and friendly to shop in and basically want their favorite brands at competitive prices. The key to any retail shop’s success is correctly placing a product on the shelf. There are several strategies for product placement such as grouping items by brand to make it easier for consumers to compare. Another strategy is to organize your store to match the walking pattern of 60-70% of your customers and place items accordingly. This is why frozen items and ice creams are found near the end of supermarkets.   

Product assortment is another factor of shelf management. Customers not only look for popular or top items, they also want specialty or niche items that match their needs. This means your store needs to have a variety of items without much duplication. Too few items may anger customers while too many items may cause confusion. A solid mix includes top-selling goods as well as specialty items for niche customers. 

Some retailers find more profitability in sacrificing shelf space to make room for other services. Some music stores, for instance, sell instruments and also provide educational services like learning how to play a guitar. These classes are usually done in store in a section that could be used to display more merchandise. Staples in Canada, an office retail company, dedicates 25-45% of its store to short-term office rentals. They come equipped with fully-loaded board rooms and presentation rooms which has resulted in an increase in Staples’ revenue per store.     

A Point of Sale system or POS is the modern equivalent of an Electronic Cash Register (ECR) and a credit card terminal. It can be used by any type of business regardless of size or type. Directly or indirectly, they cover every area of a business. They can make all aspects of day-to-day running more efficient and profitable, from stock ordering to post-sale, targeted marketing. Also, these systems are now truly cost-effective and easy to use.   

A POS system is made up of 2 components – hardware and software. While the physical machine is important and works like an ECR, a Point of Sale’s true advantage lies in its ability to capture, store, and analyze sales and purchase data ie the software. 

POS solutions positively impact your bottom line as they increase efficiency and productivity, save time, and lower your cost of doing business. They also manage inventory and provide detailed reports to improve on customer and vendor relationships. Upgrading from an ECR to a POS results in a solid return on investment (ROI), both in terms of cost and business intelligence.

Benefits of a POS

• Lower Overhead

With automation in place, you may not need as many employees in your store.

• Increase store profitability

Effective inventory management with accurate buyer behaviour information can facilitate personalised and targeted marketing campaigns.

• Expanded Payment Capabilities

Customers like having payment options. POS also include the ability to diverse payments types such as EMV chip cards, contactless payments (NFC), and mobile wallet payments such as Apple Pay, Android Pay, and Samsung Pay. In one fell swoop, you can boost sales and customer satisfaction. 

• Increased Efficiency and Greater Accuracy

Built-in time management features improve productivity while less time is spent correcting errors.

• Inventory Management

Unlike cash registers, POS systems have advanced features letting you manage inventory efficiently. These systems provide essential inventory data which is not available with cash registers.

• Ease of Use

Given the popularity and accessibility of touchscreens, learning a POS system is simple especially ones with intuitive interfaces. The software is easy to learn which means less training time and more time to be productive.

• Detailed Receipts and Reporting

Most POS systems compile different customizable reports including daily sales figures, stock updates, and profit and expenses. Through these reports, you can see sales trends such as which products are in demand, allowing you to organize your stock before or after a particular season. Most importantly, these reports will allow you to identify areas where you won’t need to spend a lot of money.

Coming up with the right strategy for you boils down to your individual business situation or problem. It requires research, carefully calculated plans, and executing them effectively. The results must always be recorded so they can be compared against the set goals and contribute to future growth. 

Over time, these results can help anticipate future trends of the company and environment. These frameworks also allow us to calculate the impact of any action on the overall goals of the company. 

Porter’s 5 Forces

Porter’s Five Forces takes into account not just the company itself, but also the external environment including customers, rival businesses, and potential threats.

Rivalry among competitors represents the current players within the industry. Competition can be ruthless in some industries, while in others, competitors may have mutual goals. The higher the rivalry among competitors, the higher the risk or difficulty in operating in this industry. 

Bargaining power of Buyers refers to the importance of the buyer or customer in the industry. Although the buyer is always important, their bargaining power may vary depending on the nature of business and industry. The higher the buying power of the buyer, the more difficult it will be to operate since they will always demand higher quality and service for the lowest cost. 

Bargaining power of Suppliers is the amount of power held by the providers of the raw materials or other items necessary for you to operate. The higher their buying power, the more influence they will have on all businesses operating in the market.

Threat from new entrants refers to the increased competition and friction that could arise when new players enter the market. This takes into account factors such as the barriers to entry for new players, as well as the economies of scale enjoyed by existing players. 

Finally, threat of substitute products refers to the availability of similar products or services in the market which might fulfill the same needs as your product. These substitutes are a threat because consumers will have the option to switch from your product to another that is readily available in the market. 

Once you have identified the five forces, you assign a value to each such as Low, Medium, or High. Let’s say you want to assign a value to the rivalry from competitors in your industry. If there are a lot of businesses offering the same product or service as you, and there is tough competition, then rivalry from competitors is high. If there are few or no other competitors or if you enjoy a monopoly, then there is low rivalry. 

Porter’s Five Forces model works when you look at all the five forces and carefully analyze the situation to come up with the best strategy.

SWOT Analysis

SWOT is an acronym for Strengths, Weaknesses, Opportunities, and Threats. The framework analyzes your business from these four angles to determine the best course of action. Strengths and Weaknesses deal with the company’s internal situation, while the Opportunities and Threats are external.

Strengths are the characteristics of your business which give you an advantage over your competition. As the name suggests, this includes things you can do better or faster or any special resources or assets you have that others don’t. 

Weaknesses include your shortcomings, as well as any strengths of your rivals. By studying and analyzing your weaknesses, you will learn of any limitations your business may have, and your areas of improvement. 

Opportunities often present themselves in the business industry, and it is up to the strategy manager to help identify any avenues where the business can get an advantage. This includes any emerging trends or unfulfilled needs of the market. It can also include the effects of marketing activities or publicity for your company.

Threats are always present in business and must be taken into account, to mitigate any risks beforehand. Threats can be of many types, and are often not in our direct control. They could include a governmental action or law that hinders business activities, or the arrival of a new product which is better than your own. 

Balanced Scorecard

The Balanced Scorecard measures various aspects of the business and gives them a score or rating. It is generally used for identifying strengths and weaknesses, and for improvement of processes. The four main parts of a Balanced Scorecard are the Financials, the Customer, the Internal Processes, and Learning and Growth. In the center, we have vision and strategy.

For financials, you should analyze your sales, revenues, costs, cash flow etc. In other words, you want to find out how healthy your company is in terms of financials. 

For customers, you should know what they think of your product and how satisfied they are. This will require research and collecting feedback from your customers. 

The internal business process refers to the methods used in your company to provide the product and service to your customers. These processes must be efficient, and there should not be any wastage of time or resources.

Finally, learning and growth deals with training and improvement of the staff and processes. It involves applying knowledge and new research to your company’s growth, and creating value out of new information quickly and seamlessly.

For each of the above parameters, you have to define your objectives, decide on the measures you are going to take, set your targets, and list down the initiatives.  

Launching an e-commerce operation requires lower capital as you save on overhead costs such as store lease, on-site staff, warehousing or space for inventory, etc. It is also more accessible to the wider public giving you more sales options. Ideally, some of these “saved” costs would be invested on a solid digital marketing strategy that leverages a website, social media, and Google.     

It’s not all doom and gloom for brick and mortar stores though. Research has consistently shown that customers prefer touching the product and the instant gratification factor stores offer. Further, there are some products and services that are just difficult to upsell or sell online. Finally, never underestimate the power of customer loyalty. Many users return to a business because they received good service and felt positively after their experience.  

For a successful store in modern times, you will have to pick the right location taking into account factors like store surroundings and accessibility. Also, you will have to invest in the best quality store staff. They have to be more like brand ambassadors than sales people. This is because many people have done online research into the product and are better informed than before. 

The contemporary trend in tech e-retail is now in fact offline stores! Amazon kicked things off in 2015 with a bookstore and since then the internet Behemoth has made $1.3 billion from in-person sales. Another popular trend is pop-up shops. These are little kiosks or test shops that are often a viral hit, spark brand awareness, and generate sales while keeping costs minimal.   

So now should you invest online or offline? Both, an omnichannel sales model is how to survive in the modern day business world. An omnichannel method just means using multiple ways or mediums to make sales. So, ideally you would have both a web presence and a physical one. This will allow you to satisfy your local users while also staying on the lookout for other prospects.    

One of the biggest reasons to permanently transition to a remote workforce is an immediate reduction in expenses as less office space and a lower number of resources are used. Which is supported by a weaker marketplace in which every sale is competitive and disposable income is minimal. 

Two factors to consider when managing a remote workforce:

1. Maintaining a streamlined workflow
2. Integrating project management tools

The tools usually come with their own costs and risks. Further, having the tools is one thing, using them effectively is another. You need to have (and hire) a staff that supports the use of the tools at their disposal. 

While the idea of a traditional office with physical staff may seem quaint in these tech-driven times, the truth is that even the tech giants maintain headquarters and on-ground staff. This is because a shared workspace is still the best thing for communication and ideation. 

An office allows workers to grow together resulting in strong interpersonal relationships that foster teamwork and lead to a productive energy that can not be replicated by machines. Those lighting-in-a-bottle sessions which excite and engage workers are very difficult to duplicate online.   

There are some roles that require an employee to be, both directly and indirectly, in touch with the market. Sometimes they are required to be physically present or in terms of being “in the know” by mingling with others and discussing the trade. Tech solutions to mitigate both of these things exist but most argue they are still not there yet. 

In short, a remote workforce may cut expenses on the front-end (rent, etc) but it comes with other costs and potential pitfalls including a deterioration in communication and quality. One needs to analyze the specific role and understand its dynamics to conclude whether it can be performed well remotely.