It is common knowledge that there is hardly a household within Nigeria that doesn’t eat rice. The importance of rice to an average Nigerian can never be overemphasized. This means that there will be good returns on investment in this business. In this article will dwell on how to start a rice distribution business in Nigeria and why you should consider it as a good investment opportunity.
Reasons to Invest in Rice Distribution Business.
1. Rice is not a perishable food like a vegetable. If water does not get to it and it is placed on wooden pallets, it will take at least 4 years for the rice to get spoiled. Within this period, there is no way you cannot sell your stock of rice.
2. Nigeria is Africa’s biggest economy. The population of Nigeria is 170million people and by the year 2020, it will be about 200million people. Statistics show that about 22million bags of rice is consumed every month. So there is a big and growing market for rice in Nigeria.
3. There is always a ready market in almost any locality. If you go into the business as a wholesaler, you will always find many retailers around you, who will patronize you regularly
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How To Start Rice Distribution Business In Nigeria
1. A Supplier
This should preferably be a rice farm because as the wholesale distributor. You need to buy from a source where you can get the rice in a very large quantity and at the cheapest possible rate. You can still make profits after spending on the logistics involved in getting the rice from the supplier to the retailers.
Most times, you don’t get to sell off the whole bulk of supply you get at once to the retailers because there may be times when the market demand may be low, that is when you need a warehouse to store your rice until you are ready to ship out to retailers.
To become a wholesale distributor, you need to buy in very large quantity from the rice farmers and sell in smaller bits to the retailers; so starting a rice distribution business requires much capital. The only exception is if you have a mutual understanding and agreement with the farmers where they supply you the goods on credit sales, you sell to the retailers and pay them off as soon as you are done with the sales.
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As the distributor, you may have to be in charge of transporting the rice from the rice farm to your warehouse or delivery to customers when orders are placed. You may need to get a few trucks to handle the distribution process or you can strike an agreement with a logistic company to take care of the transportation process.