Distribution Business in Nigeria: Guide on How To Start (2024)

Distribution business offers many opportunities in Nigeria. This lucrative venture ensures that you make profit. Here is a guide to start distribution business in Nigeria with success.

There is no doubt that Nigeria is a country abound with limitless opportunities. Our massive population makes it easy for different varieties of businesses to thrive favourably in the country.

With the population projected to increase by 10% within the next 30years, more opportunity for business growth is in the offing. One of such venture is distribution business opportunity, which guarantees you profit if you know how to go about it.

In distribution business, you get goods in bulk directly from a company(foreign or local) at a specified rate and then sell it to the wholesellers and retailers at rates that will earn you profits. As a distributor, you have direct link and supplies from the company.

The profit margin in this business is high and it may not require huge capital at times it may not require any start-up capital. Let’s now consider how one can start-up this distribution business in Nigeria.

Before moving ahead to start the distribution business, you have to answer the following questions.

Which product(s) are you distributing? What is the demand rate of this product? To whom will you distribute to? Where will you carry out your distribution? Which company will you get your supply from? How will you store your goods?

Which product(s) are you distributing?

This is simply a question of what to supply. Before going ahead to start-up this business, you have to identify a product of need. You have to identify which niche to belong.

You will to decide whether to supply a product that is needed daily such as food items and drinks or a product that is needed intermittently such as building materials. So, firstly you have to identify an item of need.

What is the demand rate and the profit margin in distributing this product?

This has to do with feasibility study of the market. After deciding on the product to distribute, you should them move ahead to make findings about the demand rate of that product to know how often people need it. You should also make findings about your potential profit.

To whom will you distribute to?

This has to do with the identification of your target market size. You should know your customers, start building links and relationships with them, get to know their problems and channel your distribution activities towards that direction to get more customers.

Which company will you get your supply from?

After identifying your niche, your demand estimate and your target market, the next thing is for you to decide on the company to distribute for. Get to know about the necessary financial and legal requirements for a start-up.

It might not be very easy to break in and become a distributor for the top already existing companies, unless you have huge millions of naira to stake. Their approval procedures may also be very tedious. If you still wish to distribute for these big market players, then you can become a sub-distributor for a major distributor and grow from there.

As a newbie distributor, it is advisable that you go for the new companies who are yet to find their feets in the market. Their approval requirements are very simple and some may not even demand for any financial commitment. The only thing you would be asked to do is to provide referees and sureties. A great business proposal will earn you this.

How will you store your goods?

Before setting out to start the distribution business, you have to make provision for a warehouse, a shop or a secured place where you can store your goods for prior distribution to retailers. Your warehouse should be sited in a very accessible area with good road network to boost more sales.

If you are able to answer the above listed questions, then you are set to kick-start your distribution business with little or no capital. If you have it right, then you are on your way to raking in regular streams of income. If you want more resource to understand this venture, you can find many resources online.