March 17, 2022

How to Start a Successful FMCG Distribution Business in Nigeria

FMCG is the acronym for Fast Moving Consumer Goods. These are products you use every day. Some examples of Fast-Moving Consumer Goods include items like food and beverages, groceries, personal care, cleaning products, stationery, and so on. 

FMCG is the acronym for Fast Moving Consumer Goods. These are products you use every day. 

Some examples of Fast-Moving Consumer Goods include items like food and beverages, groceries, personal care, cleaning products, stationery, and so on. 

They are low priced so a lot of people can afford them despite inflation. Hence FMCG distribution is a good option for anyone who wants to start a business in Nigeria. 

Most of these products have a short shelf life especially food and beverages which account for about forty percent of FMCGs. What this means is that FMCG distribution business tends to have high turnover rates hence it will always be relevant 

If you’re considering starting an FMCG distribution business, you’re on the right path as it has a lot of advantages vis:

  • There is high demand for FMCG products.
  • There is a wide range of products to choose from.
  • It involves little risk compared with other business types.
  • The FMCG sector is profitable – the margins are attractive hence good return on investments (ROI).
  • Setup costs are not very expensive because many FMCG-producing companies have robust business models in place already.
  • The industry requires little or no technical expertise. Anyone can participate in this business irrespective of background, educational qualifications, or social class.

You might be wondering, What are the barriers to entry and how can you move past them?

First things first. You need information. 

It is important to have an overall knowledge of starting an FMCG Distribution Business in Nigeria. The good thing is that it is easy to do research on the FMCG industry. Once you have gotten enough information, then it is time to make moves in the direction of your decision.

Now how do you start?

We’ve put together some steps on how you can start an FMCG distribution business here in Nigeria regardless of the part of the country you stay in. Let’s run through them.

Identify which FMCG brands to stock

One amazing thing about FMCG business-plenty options to choose from! There are numerous brands both local and imported. You need to identify which ones move the fastest and are preferred by consumers in your vicinity. It’s been discovered that some products fare differently in different parts of the country.

Register and incorporate your business

The next step is to register your business with the Corporate Affairs Commission (CAC). Just like business plans, there are consultants especially legal practitioners that offer this service. It is straightforward as soon as CAC approves your preferred business name.

Choose a good location for the warehouse

You must have heard this before. Location matters. Take some time to search for a place that is accessible and within your budget. One secret is to pitch your tent around a major hub where similar businesses exist. Bonus point, make sure rodent infestation is minimal in the area/facility.  

Arrange for suppliers and delivery agents

Who will your suppliers be? How will your products get to you? What will be the frequency of delivery? These and more are points you need to consider where supplies and delivery are concerned. It is a very critical part of the business. If products that are in high demand are rarely available, it will affect the confidence your customers have in your business

Market your goods and services

Now you’re almost ready for take-off. Start telling friends and family about your new business. Leverage WhatsApp, Facebook, and other social media platforms to market your business. Join relevant trade unions and chambers of commerce. Keep putting the word out. Look for mentors that can guide you as well.

Keep track of inventory and payments

These are operations essential. Any FMCG business that is not tracking these two aspects runs the risk of failure. Automate as much as you can using technology. As much as you can, limit the use of cash as your business grows. Thankfully, there are several tools you can use to make this work.

Another important thing to have is a good and dedicated staff.

In the beginning, you will experience some hitches. This is normal for any business.

Most companies in the FMCG sector are now recruiting for distributors through different channels. So be on the lookout for new opportunities. Follow their social media pages and newsletters. You can also make direct inquiries too.

Above all, start. 

The best way to learn about any business is to do it. There are some details and secrets you may never know until you’re on the field making things happen.

Duplo’s payment systems allow FMCG distributors to receive and make payments with their retailers & downstream agents. It’s an all-in-one platform especially built for commerce that allows for easy tracking and reconciliation of all transactions. Speak with our team to get started.

From All of us at Duplo, we wish you success in your FMCG business endeavors!

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