Strong overseas competition and year on year wage growth has not been kind to the Australian Manufacturing Industry. In fact, manufacturing has dropped to under 6% of the Australian GDP, from a peak of 25% in 1960 (See below).
With overseas manufacturers increasingly lowering their costs and getting more sophisticated, you’d think it would be all doom and gloom for Australian Manufacturers.
So why are we so optimistic?
Well for one thing, Manufacturing continues to grow. Yes, that’s right, Manufacturing has actually grown 150% from 1979 to today. It has just grown at a slower rate than other industries, which is why manufacturing’s percentage share of GDP is dropping.
In fact, there has been a record period of growth for Australian manufacturing since 2012.
This is growth that has occurred despite slowing mining growth, and the closure of Australian Car manufactures like Ford and Holden. So what is happening? Well, Australian Manufacturers are adapting and evolving to changing market conditions.
There are three ways Australian Manufacturers are adapting to grow their businesses.
1.) Be Better Than The Competition
In a competitive market, it pays to be better than the competition. Don’t rule out the impact of customer service on the growth of your business.
China and other Asian economies are able to produce goods at a far lower cost than Australia. This means that to stay competitive, we need to stay ahead of the pack. We can’t compete on price alone, and need to think of new and innovative ways to better serve our customers.
Focus on one thing you can bring the customer that others can’t. It probably won’t be price, but it could be the speed at which a product can be delivered to them, the quality of the product, or even the knowledge that you can bring to the market about the product.
Not all customers will shop around based on price. If the service you provide is impeccable, then your business will continue to grow!
2.) Embrace New Technology
In a production line, one of the biggest costs is labour. New technology can dramatically reduce the amount of employees required to run a production line.
If upgrading technology, it doesn’t have to be to the latest and greatest equipment. In fact, sometimes an upgrade to newer but used machinery can net you the most bang for your buck.
The embrace of new technology also doesn’t have to be through a physical purchase. For most decision makers, the first place they go to research and look for a new purchase is the internet. Most manufacturers and industrial companies don’t have an online presence, and so are missing out on opportunities to bring new customers in.
For companies that decide to build an online presence, an online store is a great place to start. Specialty developers like Webright focus on B2B ecommerce platforms, and can create online stores that will open your company up to new markets.
3.) Find new markets
A lot of manufacturers sell products to one particular industry. This is great when that industry is doing well, but what about when that industry falls upon hard times?
Manufacturers who only serve one market have often never spent any time researching or reaching out to new markets. These manufacturers rely on relationship marketing, or word of mouth to reach new customers.
A company who sells spare parts for the automotive industry might find that, with a few modifications, their parts are equally useful to the industrial machinery market, plumbers and builders. The problem is that they would have no way of reaching people in these markets. For companies like these, a good option is to list their products online through an already established e-commerce platform.
Machinery Genie is a great option for companies who want to put their products in front of a bigger network. The company puts your products in front of thousands of B2B companies, and can also cross promote through marketplaces like ebay, gumtree, Amazon and Alibaba (when they reach Australia).