Starting a distributorship business is very easy provided you have adequate cash and skills. Determination alone is not enough if you are thinking this line of business. Whereby you have every other thing but limited cash then you should think of other avenue of doing the same thing in a different way. This is were sub distribution business comes in. It is most times difficult for many people to meet up with the requirements to become major distributors to some manufacturing companies.
To be a sub-distributor you have to meet or write the company that has the product you want to sell. They will in turn refer you to the distributor covering your zone. Assuming you are in Ogba, Lagos, and you want to be a sub distributor for Erico tomatoes paste. The company will refer you to Erico Tomatoes distributor in Ikeja Who will sell the product to you on their on price and terms and you have to stink to the designated area. It must be a place where there is no sub distributor of that product. It is against the ethic of distribution business to have more than one sub distributor in a particular area.
PRODUCTS FOR SUB DISTRIBUTION
- Nestle distribution business
- FMCG distributorship opportunities
- Flour distribution
- Bread supplies
- Foodstuff distribution/supplies
HOW PROFITABLE IS SUB DISTRIBUTION BUSINESS
It is very profitable. This is because your sales is in volume and you sale faster than the wholesalers or retailers. Some companies don’t have control of pricing once their products have been given out to distributors. In that case the amount you place on the product is entirely as you like. Some people add #50, #100, #150, #200 depending on the kind of product they are selling. Most biscuit sub distributors use between #50-#100 to sale.
Assuming you sold 200 cartons a day multiply by #50 which you added on too
It will become 200×50=10,000. In a day you will make not less than #10,000 Naira. The sales can be more than that depending on your location you can sell up to 500 cartons in a day. What if your gain is #100 per carton. Yeah! That’s how lucrative sub distribution business is.
Think of how much you will be making in a day if you are doing sub distribution for 5 or more products
WHY YOU SHOULD START SUB DISTRIBUTION BUSINESS
- Fast moving consumables goods (FMCG) are very lucrative and interesting as well to sale. Leading products attract great sales but the competition is high, they already have a lot of distributors in some locations that is why some of them will collect your money and put you in the waiting list just to make the business very competitive. While waiting for God knows when you will be considered, it is better to delve into sub distributorship as an alternative
- The money for starting a sub distribution business is not huge when you compare with what is require from a main distributor. There are some leading companies for you to be a distributor for their products, you will need more than 2 million. But with #500,000 you can start as a sub distributor and finally migrate to a distributor within a short time.
- The space needed for storage may be just one or two rooms whereas you will need a whole building for storage as a distributor because the products will come in large quantities.
- New companies can easily consider you or approach you to be one of their distributors
THINGS NEEDED TO START A SUB DISTRIBUTION BUSINESS
- Store/ware house
- Mobility it could be car, bike, keke, or wheelbarrow
- Sales representatives
Things to consider before starting sub-distribution business.
- market survey,
- market strategy,
- build up etc.
1. MARKET SURVEY
Before starting sub distribution business you have to survey your environment to identify fast-moving products. At the course of this you are to pick out they ones that doesn’t have the presence of regular distributors.
Products that already have those supplying in that location shouldn’t be in your list. This is because you will not be given the privilege to do so. Surveying will help you discover the niche you will like to venture into. Assuming you want to go into biscuit then you should find out which ones move market fast in your location.
Although there are some products you can start without money, that is, if you are able to present a proposal with good marketing strategy. But there are products you have to start with money. The capital to start a sub distribution business is not fixed;. You can start with any amount depending on the kind of goods and what the distributor you are dealing with wants. For products like biscuit you can start with #200,000. All you have to do is to buy different brands and sizes. That amount can buy up to 200 or more cartons of biscuit. There are some cartons of biscuit that goes for #1,000, #500, #700 etc. With #100,000 you can start a Golden Penny business but with just few products maybe noodles and semovita. #50,000 can start snack business such as chin chin, cupcake, pop corn tissue products etc.
Funnily consumables like chin chin can yield better profit than big products. Although it will depend on the overturn too. If you have #300,000 you can be a sub distributor of soft drinks like coke cola, pepsi, lacasera, fuji drink. Other products like bottle water such as Eva, aqua fresh etc. Can be started with little amount. This therefore means that your capital will in a way determine the kind of sub distribution business you will engage in.
Another important thing to consider before starting a sub distribution business is to get a shop or ware house. In fact this is compulsory because you must have where to store the goods. It has to be where people can locate easily for purchase. The shop can be a place in the market, close to the market or a busy location. Most sellers will dash into your shop to buy when the exhaust the quantities they bought and can’t get the products from distributors immediately. Especially when customers are waiting or asking for such products.
There is a lady that is selling biscuit close to the market in my area; she is using #50 to sale. This is to say if she bought a carton of fibre active #1,000, she will sell it to wholesalers #1,050 and you have to buy 5 cartons to get that price. But if you are buying one carton she will sell the same amount wholesalers sell to retailers.
4. PARTNER WITH MANUFACTURERS OR MAJOR DISTRIBUTORS
You have to partner with these two if you want to be getting steady supplies. It will give advantage in the long run as new competitors are coming into the business.
4. MARKET STRATEGY
If you don’t have good marketing strategy on ground I am afraid you will not go far in this business. You need to have proper sales strategy and business management as well. This will help you to build up your customer base. You will have to draw out plans on how to supply the goods, the areas to cover, means of conveying the products and ways of collecting money.
Taking the last point after building your customer base some of those customers will want to buy and pay later. It is left for you to say yes then set time limit for payment.
If you don’t have good business strategy you may eat up your capital. Always book the products down ahead of time once you noticed that the products are reducing fast. If you allow your customers to locate another place because your shop is most times empty then you have already lost them.
5. BUILD UP
By this I mean growing the business, once you start and you are succeeding other companies will approach you to be a sub distributor to their company. In fact companies that are producing same product will prefer you to a new person (novice). For instance a tissue company will like to give their products to already established tissue sub distributors. Because they have the experience and customers who can easily buy the new product from their hands.
While concentrating on your distribution business, you should open your eyes to new brands. There are very many new companies in Nigeria with wonderful products asking for positioning in the market place. It will be a privilege to attract this product to your shop.
HOW TO START A WHOLESALE BUSINESS
Someone may ask is it the same thing as sub distributorship? Well the answer is yes and no. Yes in the sense that you can sell directly to retailers just like wholesalers will do. Maybe by dividing the products into smaller quantity that can serve for both wholesalers and retailers.
Although you are supposed to be selling to wholesalers who in turn will sale to the retailers.
You can always chose a good supply business in Nigeria, carve a niche, like; flour distribution business. There are very many FMCG distributorship opportunities in Nigeria.
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