Do you know how to start FMCG business from scratch? Are you interested in the requirements for starting a FMCG distribution business? Find out more.
The FMCG industry is considered as one of the largest across the world. There are so many thriving multi-billion dollar companies out there like Unilever, Procter & Gamble, Nestle, Wal-Mart and so on with many others leaving outstanding footprints with their recordable growths and the industry is so large with great opportunities for new players.
In this article, we will be talking on how to start a FMCG distribution company.
The big players in the industry are mostly into manufacturing and mega-wholesaling. This might just be impossible for a small business owner to run, but they can take advantage of products the big companies sell and start their own FMCG distribution company.
You already have the knowledge that manufacturers are into production of items and distributors are saddled with the responsibility of re-selling these items at a slightly higher price than they got from the manufacturer.
Take for example, a box of chocolate manufactured by Hershey’s will be distributed to the consumers by Wal-Mart.
Between this, we have some very crucial operators that are regarded as distributors who are responsible for the movement of these products from the manufacturers to the market and that are where you come in.
STARTING A FMCG DISTRIBUTION BUSINESS
You may not really want to jump into a business of distributorship that you know nothing of. It is very important for you to acquire basic training that will help you to achieve success.
You may simply be of the opinion that a FMCG distribution business may be just the process of buying and selling, but this could be quite tricky when you are not empowered with the right skills.
Let’s take for instance, distributors are versed with the knowledge of how to manage items that are about to reach their expiring date so they will not lose money. With that in mind, FMCG distributors know about what to do to sustain their business, which an untrained person may not know about.
This is the main reason why it is important for you to undergo training and acquire the skills that will be needed to run the business.
- BUSINESS REGISTRATION
The manufactures out there would prefer to do business with corporate firms that will individuals that are not registered. So it is much more advisable to register your business before even thinking of starting your FMCG distribution company.
With this in place, your business name will be secured and then you can be regarded as a legal entity.
- BUSINESS PLAN
All businesses require a business plan as this will be regarded as the pointer to your business, your objectives and goals, and what you plan to do to reach them, your market.
When you have a good business plan on ground, it will not be difficult for you to get adequate funding for your business as there will be certain financial projections, budgets and estimates within your plan.
The business plan most times is that document that helps you to determine if the business is meeting up with targets (as stated in your goals and objectives)
- GET AN OFFICE OR STORE
As an FMCG distributor a store or a warehouse is very crucial for your business. It will interest you to note that most manufacturers will come to inspect your facility to know if it is of standard to store their products.
At the same time, if you are starting small, you can kick off your business from home, if you have enough storage space or even in your truck if you have one.
You might not even need to get a big office space; a section of your warehouse can be converted into a small office.
- START UP DEPOSIT
Most of the manufacturing companies out there will require you to make some initial deposits with their company before they can start dealing with you, while some other will even require you to start your business with half a trailer of their items.
So it is well advisable that if you are starting small, you can work with new manufacturing companies who will not mind dealing with you even if you don’t have much capital to start with. But you have to ensure that the products you are working with are the ones in high demand.
Now that other things have been in place, the next thing to do is to begin sourcing for items.
You will need to seek companies that can work with your current budget for your FMCG distribution company.
Even if you are short on cash, you can still make the move to approach some companies if you have a well drafted proposal or better still a location in a high profile area that will motivate them to want to work with you.
Before going into the business you will need to make a marketing feasibility study of your area of reach. Identify the retailers that you will be willing to establish business contacts with.
As a new entrant into the FMCG distribution business opportunities, you may need to draft up strategy to penetrate the market, such as bringing down your prices, running promotions and discounts for new customers.
You will also need to constantly engage yourself in advertisements across your local area, and even on social media such as Facebook, Instagram, Twitter and so on.
As an FMCG distribution company, it is not unlikely that you make more than $1,500 on a monthly basis. The business is a lucrative one. And don’t also forget that as a major distributor, most companies will pay you commissions for your sales and even give you incentives for being a loyal customer.