Nigeria is a very populous country, comprising more than 210 million people. These people have essential daily needs that must be satisfied, no matter how unstable the economy is. In this post, you will learn how to start a wholesale provision store in Nigeria.
Is the selling of provisions profitable in Nigeria?
Yes, it is. Everyone must bathe with soap in the morning, brush their teeth, sip some coffee, drink some milk, cook instant noodles and buy soft drinks later in the day, amongst other things.
For all these to work, there must be no interruption in the supply chain. As a wholesaler, you will buy these products in bulk and then resell them to other sellers and end consumers. As a result, the wholesale provision business is very profitable in Nigeria.
Which products are most profitable for a wholesale provision store in Nigeria?
- Washing and bathing soaps
- Soft drinks and beverages
- Body Spray
- Baby Diapers
- Hair cream
- Liquid antiseptic
- Baby foods
- Body lotion
- Corn flakes
- Hair relaxers
- Water Dispenser Bottles
- Instant noodles
- Salt, Maggi and other kitchen ingredients
- Takeaway Plastics and disposables
- Razor blades
- Batteries and lots more
Generally, any product being used in the household daily will be very profitable for a wholesale provision store in Nigeria.
How much does it cost to open a provision store in Nigeria?
That depends on the level you want to operate at. If you’re starting small, you can open a wholesale provision store with a capital of less than ₦500,000.
If you have access to large capital, you should open a normal or large wholesale provision store. It will cost you more than ₦1 million, but you will make more profit on each stock.
How do I start a wholesale provision store in Nigeria?
Follow these steps to start a wholesale provision store in Nigeria:
1. Create a business plan
A business plan is a fundamental part of any startup, no matter how small. Aside from making you professional, it will assist you in decision-making processes. Since you have everything documented, you won’t miss any important decisions.
The business plan for your wholesale provision store should include your:
- Startup costs
- Financial plan
- Customer analysis
- Company overview
- Competitive analysis
- Market research
- Marketing plan
- Operations plan
Commercial and microfinance banks can also request your business plan (alongside a proposal) before lending you a business loan. Business incubators and accelerators are not left out.
Also read: How to write a business plan
2. Get your startup capital
The next thing to do after drafting your business plan is to obtain the amount you need to start your wholesale provision business in Nigeria. This is known as the startup cost and it must be included in your business plan.
Starting a wholesale provision store in Nigeria will cost you a little over ₦1 million. If you want to start with less stock, you can start with a little over ₦500,000.
Aside from the startup costs, you should also prepare money for the operational costs. The reason is that you won’t recover all of your startup investment within the first 3 months, so you’ll need other money to keep your business running.
Operational costs include monthly electricity bills, subsequent rent billing, monthly salaries of your employees, unplanned contingencies, and the like.
There are many ways to raise capital for your wholesale provision store. You can use your personal savings, money from your close relatives, or angel investors. You can also approach venture capitalists and business accelerators, but your chances of getting approved are slim.
You can also apply for business loans. In that case, you should apply to thrift cooperative societies, microfinance, and commercial banks.
3. Rent or purchase a shop in a good location
After getting the required startup investment for your wholesale provision store, you should start looking for an affordable spot where you can site your shop.
Your wholesale provision shop should have the following qualities:
- Located in a busy place
- The locality should have a very low crime rate
- Your shop should be accessible by road
- It should be heavily structured to withstand rain, storms and other harsh weather conditions
The competition is also important, as you don’t want to run out of business before starting. If there are already more than 2 wholesale stores in the locality (selling products similar to yours), it’s advisable to consider another location.
4. Brand and register your wholesale provision business
Once you secure a good spot for your wholesale store, you should brand your business. Branding involves you naming your business, designing your logo, printing business cards, getting a customized uniform for your store workers, etc.
It is also very important that you register your wholesale provision business with the corporate affairs commission. Potential customers will be more convinced to buy in bulk if they see that your business is registered while also having a logo, business card, and other branded identities.
5. Get the needed equipment and furniture
Being a wholesaler means you will have products in large quantities. You will need to store these products in a cool and dry environment, and away from pests.
You will need a refrigerator, many shelves and also a medium-sized room. This small room will serve as your small warehouse, as you can’t possibly display all your stock in the main shop.
6. Stock your wholesale provision store and acquire distributor rights (where applicable)
After you get a carpenter to nail shelves to your walls, you should start stocking your wholesale provision store. Note that some manufacturers will require you to apply for distributor rights, and these may cost you around ₦100,000 or less.
Examples of manufacturers that require distributor rights include Coca-Cola, cement, instant noodles, and other big companies.
7. Hire a shopkeeper or assistant
You will need a shop assistant, whether you like it or not. Remember that you’re a wholesaler, so you will be moving cartons, and big kegs, counting cash while also responding to customers’ enquiries.
If some of your customers demand that you deliver to their retail shops or homes, you may need to buy/lease a delivery van. You will also hire a driver who will get paid daily, weekly or monthly.
How do you think people will feel if they can’t find soap to buy, instant noodles to eat or soft drinks to chill with? They won’t feel good because they need these products daily. You can specialize in food products like flour, noodles, beverages, carbonated drinks, pasta, etc.
You can also sell kitchen ingredients like salt and Maggi, baby care products like diapers and toiletries, building materials like cement, furniture accessories like mattresses, and many other things.
No matter how bad the economy is, Nigerians need these products. As a wholesaler in the supply chain, you can recognize this as a very profitable business opportunity and make good money. Start your wholesale provision store today.