One of the challenges manufacturers of products encounter is the distribution of their products from one place to another in a country and that is why the need for distributors is highly welcome for any manufacturing company.
In Nigeria today, lots of people focus solely on searching for white collar jobs which is not really available. When you see a job advert that needs 10 people, more than 5,000 will show up for the interview. Since the jobs are not there many people turn to criminal means to get a better life.
With the unstable economic situation we find ourselves in Nigeria even those that have a job are not guaranteed safety as anything can happen. The best bet for anyone is to look for a lucrative business to start so as to survive. There are lots of businesses out there that you can start and make money from but today I will be focusing on one which is called Distributorship Business.
Starting a distribution business in Nigeria is one of the easiest and fastest ways of making money as people consume one or more goods every day. The trick about succeeding in this business is knowing what people want and making it available to local stores and supermarkets in your environment.
We have lots of manufacturing companies in Nigeria and they need distributors to help them reach wider market. But before you think of starting a distributorship business you must know one thing the success of any distribution business is to know what people need around your environment.
Who Is A Distributor?
A distributor who is also known as a wholesaler can be described as a person who buys goods in large quantities from a manufacturer and sells to retailers. A distributor helps the manufacturer market their products in a particular geographical location. As a distributor, you become the go to person for retailers that needs a certain product. As a distributor, when you buy in large quantity, you separate them into smaller units and sell to retailers who also separate into small units and sell to consumers.
For example, as a distributor you buy a carton of milk from the manufacturer which may contain let’s say 100 in a carton and you separate them into rolls of 12 and when a retailer buys from you they also separates them one by one and sell to consumers. (I hope my explanation makes sense)
Advantages Of Starting A Distributorship Business In Nigeria
There are different advantages of starting this business and they include:
Easy To Start: the hard work in this business has already been done by the manufacturers so all you have to do is make it available to retailers.
Low Start Up Capital: Unlike other businesses that requires a lot of capital to start, the distribution business can be started with the least ₦100,000 to ₦200,00. Even if you do not have enough money to start, you can write a proposal and send to the companies you want to become a distributor of your strategies and plans and they will only ask you to bring a guarantor and someone to stand as a surety.
Grow Your Business Quickly: Having to grow this business into a multi-million Naira business is guaranteed if it’s done right.
Disadvantages Of Starting A Distributorship Business In Nigeria
The only disadvantage of starting this business I can think of is not getting the right products people are looking for in your area.
Read Also: How to start a haulage business in Nigeria
What You Need To Start A Distribution Business In Nigeria
Here are things needed to start this business
Pick A Niche: As we all know jack of all trades is master of none so you have to pick a niche that you will specialize on. This may include distribution of food items, office materials, toiletries etc. The best thing to do is to research your environment on what works and what don’t.
Write A Business Plan: A business plan is a carefully written down document that highlights the goals of your business, how they can be achieved, your mission and vision statement, how you intend to raise fund and market your business, the number of staffs you would need and how much to pay them, the equipment’s and tools needed for the business and how much you intend to make from the business on a monthly basis.
Register A Business: For most of the top manufacturing companies to take you serious, you would have to present to them a registered business. With a minimum of ₦50,000 to ₦70,000 you can get a business name registered with Corporate Affairs Commission (CAC).
Get A Warehouse: this is where the products you get from the manufacturers would be stored. Before most companies will consider your application they would want to know where you will be storing the goods before you sell to retailers. Your warehouse must be secured from rain or sun and most of all thieves’. As a beginner and starting small your house can serve as a warehouse until your business grows.
Capital: Most established manufacturing companies require a start-up capital for you to become a distributor while new companies may only require you bring a guarantor before they can give you their products.
Transportation: This is needed for easy movement of the goods from the manufacturer to your warehouse and then to the retailers. You can either purchase a truck/van or hire one until you are able to purchase your own.
Apply For Distributorship: when you have gotten all this setup, then you can then go out and apply to become a distributor. You will have to fill a form and meet some basic criteria’s before you can be approved to become a distributor in a well-established company. The rate of being approved by an established company might be high so I suggest you look for new companies that have goods people are looking for and apply to become their distributors.
Make Contacts: This will require you to go out and meet with both consumers and retailers so you can supply to them. This is very important as the more contacts you have the more goods you sell and the more money you make. You will have to figure out a good marketing strategy for you to get ahead of your competitors.