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Distributor Business in Nigeria; requirements, profit & how to start

The main purpose of buying goods and selling it is to ensure goods get to the consumers living in far off places. As goods and services move from producer to consumer they may have to pass through various individuals. One of these various individuals is called a distributor. A distributor does distributorship business or wholesale distribution business.

So, do you want to know what it takes to start a distributorship business in Nigeria? Are you interested finding a profitable distributorship business you can start in Nigeria in 2017 and beyond.  If your answer is yes; congratulations!  You’ve just landed at the right page.

Picture of a Distributor of goods and services

Today, I share with you what it takes to start a profitable distributor business in Nigeria; some of the common requirements. Look! I will not end there. I will proceed to usher you into 2017 best selling products of which you can actually apply for their distributorship. There are quite good number of distributorship business opportunities you can start in Nigeria today.

But before I proceed; let me beforehand enumerate to you what is required of you as a distributor of a business. As a distributor;

  1. You are to buy goods/products directly from producers and in large quantities and sells in relatively smaller quantities.
  2. You are expected to sell different varieties of a particular line of product. For example, a distributor who deals with paper is expected to keep all varieties of paper, cardboard sheet, card, etc.
  3. You may need to employ a number of sale agents for distribution of a product.
  4. You need large amount of capital to be invested in the business.
  5. You may also be required to provide credit facility to retailers and financial assistance to the producers or manufacturers.

Hold on! Don’t be frightened by the above demands. There is light at the end of the tunnel. Read on!!!

 The business of distribution is one of the most profitable businesses one can venture into and you will never regret for becoming a distributors.

Most newly emerging companies situated in the cities like Lagos, FCT, Kano Aba, Onitsha etc and sub-urban areas are in constant search of reliable distributors. Companies in this category relax their requirements for you to be their distributor because of their quest to penetrate the market. They only stiffen their requirements after they gain their feet in the market. So you have to take advantage of these types of companies when they are new and sign up as a distributor before it gets too late.

I don’t have money; can I start distributorship business without a start-up capital?

Guess what?  YES, you can. You can become a distributor to many companies without having a kobo.  All you need to do is to draft a winning business proposal, submit it to the company, what most of these companies does is to request for a guarantor or surety who will stand for you and if you meet up with that, you become their distributor. It is that simple! This is how one of my friends started a distributorship business in 2014 at Onitsha and today she is controlling over 20 million naira. This lady as of the time I’m writing this article has built and furnished her 3 storey building in Enugu metropolis.

What are the key to a successful distributor business?

To make it big in distribution business,

  1. Always try to maintain good customer relationship.
  2. Build large customer base.  The most important thing you need is not the products you want to distribute but the buyers of the product you are distributing.
  3. Concentrate more on the turnover rather than on cost. Distribution business is a game of volume.
  4. Always reach out to your customers whether in the name of advertisement or marketing.

For more detail on key to a successful distributorship business, I suggest you read; 7 secret to starting and running profitable distributorship business

What are basic requirement for starting a distributorship business in Nigeria?

Below is what you need to be a distributor of  products in Nigeria;

  1. Warehouse or shop: Most company when you apply for distributorship, the first thing they want to know is how you intend to store their product so that it will not get spoil by either rain or sun. In most case, they will maintain they see your shop or warehouse before they release their products to you. So, you need a storage room or warehouse if you want to go into distributor business. For someone who wants to start small, you can store the products in your house if you have space or leave them in your truck if you have one. The truck must be well secured.
  2. Registered Business name : some company require that your business name is registered. They will prefer dealing with you as company rather as an individual. This is not applicable to most companies.
  3. Start up deposit: Some established companies will require you to deposit some amount of money with their company before giving you their products. Some others will require you to start with half trailer of their product. But for new companies who are still in need of distributors, you may only need a surety to qualify. As I said earlier, it is better you start with new companies that are not yet popular if you don’t have enough money. The only thing you need is selecting best selling products before signing any agreement with them.
  4. Means of Transportation and sales agents: To succeed as a big distributor you need a truck or space car as well as sales agents. This truck or space car will be needed for taking the products from the production company to your warehouse and to retail stores across cities. You can hire truck if you can’t afford one. It is advisable you take the products to the retailers than to wait for them to come to you because when they have another distributor that offer to bring the same products you sell to them to their shops, they will quickly abandon you. So, be wise and make use of your sixth sense.
  5. Certifications, License and Permits: Sensitive products like drugs, chemicals required that you must get permit or be certified by regulatory bodies in the industry before you will be allowed to be a distributor. This is to ensure that you have acquired the skills and technicalities that will enable you handle such products.
  6. Knowledge of the market: you must have gone for market survey; know who need your product and how to market it to them before you start distributor business. Knowing who need the product will give you a sense of direction and the focus you need to succeed.

How much can you be making as a distributor? 

The profit varies depending on how big you started and the product line you are distributing.  As a distributor of a product line, you can be making up N500000 to N1 million per month as profit if you are a major distributor covering a geographical zone.  At the end of the year’s sale, the company may still pay you commission. If you are starting on a low scale, I will not guarantee that you make profit or much profit on earlier months.

Here you are, ready to get started with distribution business, which distributorship business can you apply for?

2017 best selling products you can actually apply for their distributorship

Here are 2017 best selling products you can actually apply for their distributorship;

  1. Sachet and Bottle water – This is one of the most selling product and profit making business in 2017. Starting Sachet and bottle water distribution business is very easy and requires little or no capital. The major thing you need to start sachet and bottle water distribution is space car or truck.
  2. Soft drink and Alcoholic Beverages like beer – This is another top selling product in Nigeria 2017 that you can apply for its distributorship.

Others include;

  1. Toiletries
  2. Skin care products
  3. Drugs and Pharmaceutical products
  4. Poultry feeds and eggs
  5. Aluminium roofing sheets like ALUMACO

Please note: The selection of these products as the best selling products in Nigeria in 2017 are based on Market surveys and public opinions as of the time this article is written. So, any of the products can be removed among the best selling products in Nigeria and new ones added at any moment. We advice you check this page regularly for updates for best selling product in Nigeria.

7 Secret to starting & running profitable distributorship business

There’s nothing that quite gives joy like when you start your own business and you becomes successful in the business. Sometimes, however, the road from start to finish will be full of hurdles. Usually the first two years of your wholesale distributorship business will be the “learning” years, the period you experience the ups and downs of being into a new business. However, it is good to know that many wholesale distributors came before you and many of them are now successful. With advice and inspiration from them, you can reach your desired goals. So, now let’s get to hear the advice and get inspired.

Distributorship business is one of the businesses that are lucrative anywhere you start it. Yet not all distributors are able to make it in the business.  Many wholesale distributors are winkled out of business on the first two years of their business. This is not because they lack the capital but rather because they lack the success secret of the business. So, if you are just about to launch a new distributorship business or you are already into distributor business; below are 7 Success secret that will help you succeed in your distributorship business

Success secret to starting and running a profitable distributorship business

  1. Don’t sell on credit or overextend credit to customers

One of the major mistakes successful wholesale distributors avoid at all costs is the selling on credit and overextension of credit to customers. Selling should be strictly on cash-and-carry basis. If you must sell on credit, you must have to set credit limit upfront as well as the time the credit will elapse. Check your credit references meticulously when explaining your payment terms to a new customer.  You can increase credit limits based on the customer’s payment history and purchase.

  1. Notify your supplier earlier for supply

Another major challenge successful distributor avoid is getting product from their suppliers on time. They notify their suppliers to fulfill orders faster and also provide realistic time frames to their customers. If you must success in a distributorship business, inventory and stock taking has to be part of your daily business. Know when there is short falls to product. To guarantee that those customers are well taken care of in the interim—and they will return back– their orders needs to be met timely.

  1. Always maintain good customer relationship

.As a new growing distributor, you have to pay attention to your consumer tastes and buying shifts—both of which can shatter your already growing business. Keep an eye on economic changes, what people are willing to spend at anytime, and other trends that could significantly impact your distributorship business. This is one of the qualities of a good entrepreneur. Teach your customer how they can manage their time and how they can address their needs and solve their problems in an efficient manner. You need not to know all the answers at the beginning, one step at a time.

  1. Build large customer base

Successful distributors have large customer base. Building large customer base is not one day job. It takes time and it requires you earning trusts and reputations from your customer. You have to understand that the most important thing you need to succeed as a distributor is not the product you are distributing but the buyers of the product you are distributing. So, building large a customer base is one of the success secret to running profitable distributorship business.

  1. Concentrate more on the turnover rather than on cost

Distribution business is a game of volume, more sales more profit. For example, a product you bought at the cost of $100 (N36000) and sold at $5 (N1800) profit requires that you sell more of the product to maximize profit. So, the more of the product you sale, the more profit you make. So, rather than turning your back on such distributorship business, you get in and concentrate on turnover.

  1. Always reach out to your customers

Whether in the name of advertisement or marketing, it is important you reach out to your customer.  Don’t wait for your customers to find you, find them. Imagine if another distributor who distribute the same product as you do, first find them. Reaching out to your customers help in building relationship with them.

  1. Do promo if need be

This will help you acquire more customers especially when there is serious economy change.

In conclusion, I will guarantee your success if apply the above 7 success secret in your journey to profitable distributorship business.