Making Extra Income In Distributorship Business

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Distributorship may no longer be fresh investment to many people. But the fresh angle to this trade is that modern digilisation and COVID-19 have revolutiomalised ways of doing things.

It is no longer business as usual in distributorship as the COVID-19 lockdown has introduced online business plans as having large warehouse before venturing into distributorship has been altered. As such, you may simply need dispatch riders to deliver some products as a sub-distributor.

No doubt, there are many viable distribution operations in Nigeria, while a large number of businesses around the country need reliable distributors.

If a product is in demand in your area but lacks established distributors, you may be able to break into the market by starting your distribution network.

Distributors operate as the manufacturer’s point of contact with end users of the goods they sell.

Manufacturers hardly have direct link with end users, hence, major distributor and sub-distributorship will act as bridging the gap between the consumers and the manufacturers either by online trading or on the spot trading.

Distributors play a crucial role in helping manufacturers meet the demand for their products by providing a reliable and cost-effective distribution network.

Becoming A Distributor

Get enough information on what you want to do, fund it, have proper business plan while getting warehouse is another requirement. You need to contact manufacturers and Medium of conveying the products meant for dispatch.

Every distribution company relies heavily on these pillars: purchasing, storage, transport, and sales and advertisement, especially if you are combining online sales.

The most profitable wholesale distributors use a variety of strategies to cut costs and make the most money. However, these methods are not made public. For example, an experienced distributor knows how to handle expiring goods to protect their capital.

Without a firm grasp of the basics of supply chain management, maximising profits in the distribution industry will be hard.

In addition, remember the principles of supply and demand, scarcity, and preference scales. It is necessary to understand when it is appropriate to switch between different types of commodity trades or to participate in mixed commodity trades in the market.

Source for Capital

Distributing influential brands in Nigeria requires a substantial financial investment. Starting with most prominent companies, you’ll need to buy one or half a trailer’s worth of goods. It is a significant hindrance for many ambitious distributors.

So, if you want to sell a well-known brand in Nigeria and become a distributor, you will need some financial backing. When its hard to earn money, you can look for a job as a distributor for a brand-new product produced by a business that’s just starting.

 

Register Your Business

Nowadays, setting up business in Nigeria necessitates registering your company with Corporate Affairs Commission (CAC). Some manufacturers may decline your offer to become a distributor if your company is not officially registered.

Get a Warehouse

Your warehouse will serve as the nerve centre of your distribution operation in Nigeria. It is essential to pick a warehouse close to your target market and have easy access to major roads and public transportation.

This information will be helpful when applying to become a distributor for various firms.

There is no need to rent expensive office space when a portion of the warehouse can serve the same purpose.

Types of Distributors

There are two main types of distributorship. There is major distributor and there is subdistributor. The availability of fund would determine the choice a person takes.

Initial Capital

So, a subdritributor may not need heavy fund to begin the trade unlike the main distributor who would need at least N6 million to start distributorship.

A subdistributor will not have the financial muzzle to bring goods directly from manufacturing firm. With N500,000, you can start as a sub-distributor and finally migrate to a distributor within a short time.

So both main distributor and subdistributor are parts of the chain network linking the manufacturing to the wholesaler and retail-seller.

Mrs Taiwo Kayode, one of the subdistribtors at Magboro area in Ifo Local Government, Ogun State, while speaking with LEADERSHIP  said, she is a distributor. As a  distributor and a wholesaler, she sells directly to both consumer who is willing only to buy a pack or dozen product and to retailers who are responsible for selling pieces of sachet milk etc to the end-user.

Similarly, Mrs Kayode, said a person willing to start main/major distributorship must seek partnership with manufacturers and must know the terrain of the market

Moreover, she said, 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 manufacturers around that area, you will write them or go directly to main/major distributor.  Then the manufacturing firm can refer you to the nearest major distributor wuthin your area of business because it inethical to have more than one subdistributor in a particular area,” she stressed.

Fast moving consumables goods (FMCG) are very lucrative and interesting as well to sell.

The money for starting a subdistribution 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 N2 million. But with N500,000 you can start as a sub-distributor and finally migrate to a distributor within a short time.

Mrs Kayode said starting a distributorship business is very easy provided a person has adequate cash and skills.  A would-be distributor must have special product and area in focus before stepping into the business.

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. Mobility could be; car, bike, keke, wheelbarrow or dispatch riders for online distributor.

“For products like biscuit, one can start with N200,000 capital. All you have to do is to buy different brands and sizes. That amount can buy up to 200 or more cartons of biscuit. Another easy trade a person can pick is flour,” she advised.

Likewise, Malam Aliu Mohammed living around Majekodunmi, Ikeja, Lagos said he is into subdistributorship.

“As a subdistributor, the main distributor will call to know what products I need before supplying those products to me. I don’t have the money and the storehouse to accommodate products as a main distributor. Just as you are here ready to buy a sachet of powedered milk with beverage so I serve the general public.”

Mohammed advised that, “pick what you want to begin with provided it is not alresdy being done by someone within the area, for instance you can pick noodle distributorship.”

 



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