Biashara ya Supplying FMG to local shops mtaani.

[The_eye_witness]

Nafikiria kuanzisha hii biashara.what are pros and cons . advice zikam ivo

[4ace]

Establish a good supplier (either a distributor or go directly to the manufacturer), make sure you get a good discount preferably +15% to cover your operational cost and still make a good profit. Otherwise itakuchoma mbaya.

[BSMZOMQSOZ]

1. t’s a volume business. Margins are very thin for most products and so you have to move lots and lots of products. For example, you might buy a bale of maize flour from Unga for 1200 and sell it for 1230 - 1260. So you will need to sell around 1000 bales to make 30K(before taxes and your costs). To sell that, you need about 200 shopkeepers who buy from you monthly.
2. Price. Price. Price. Shops will buy the cheapest goods. Even if its 5 shillings cheaper. So it’s easy to get dragged down into a price war.
3. You need capital. Lots of it. For example, if you buy 1000 bales from Unga(cost == 1.2M), they might sell it to you at 1180 and not 1200. You buy 2000 bales the price goes to 1160. So your competitors might kill you if you do not have the capital to buy goods in such quantities because they will be cheaper .(point 2).
4. Hedge yourself. You might buy Unga for 1200 this week, then govt does something and the price goes to 1100 next week. You might find yourself very quickly with things you can’t sell. The opposite might happen and you will be smiling all the way to the bank. Sugar is very very notorious with this.
5. Operations - you have to be there to run this business. You have to look at the money coming in(easier part) and the goods going out(harder part). Your profits might be 1kg of sugar in the 50kg bag and if you loose a kg here and there you might end up closing down.
   Some strategies I can give you for free:
6. Use smaller delivery vehicles e.g motorbikes && tuk-tuks to do deliveries. Many larger players use bigger lorries && reduces their delivery times(weekly) while shopkeepers can buy goods every other day(no enough capital).
7. Technology - It might seem expensive upfront but can save you hours && lots of operational headaches.
8. After a while, find a niche product or a product that is relatively new to the market(milk, flour) and become their sole distributor. It will insulate you from the competition && protect your margins if you can market and “push” their products. Don’t do this for a bad product.
9. Find a town that is not that competitive and set up shop.
   For more advice, I can send you my rate card. :):D. jk

[mr_shairman]

@BSMZOMQSOZ

1. t’s a volume business. Margins are very thin for most products and so you have to move lots and lots of products. For example, you might buy a bale of maize flour from Unga for 1200 and sell it for 1230 - 1260. So you will need to sell around 1000 bales to make 30K(before taxes and your costs). To sell that, you need about 200 shopkeepers who buy from you monthly.
2. Price. Price. Price. Shops will buy the cheapest goods. Even if its 5 shillings cheaper. So it’s easy to get dragged down into a price war.
3. You need capital. Lots of it. For example, if you buy 1000 bales from Unga(cost == 1.2M), they might sell it to you at 1180 and not 1200. You buy 2000 bales the price goes to 1160. So your competitors might kill you if you do not have the capital to buy goods in such quantities because they will be cheaper .(point 2).
4. Hedge yourself. You might buy Unga for 1200 this week, then govt does something and the price goes to 1100 next week. You might find yourself very quickly with things you can’t sell. The opposite might happen and you will be smiling all the way to the bank. Sugar is very very notorious with this.
5. Operations - you have to be there to run this business. You have to look at the money coming in(easier part) and the goods going out(harder part). Your profits might be 1kg of sugar in the 50kg bag and if you loose a kg here and there you might end up closing down.
   Some strategies I can give you for free:
6. Use smaller delivery vehicles e.g motorbikes && tuk-tuks to do deliveries. Many larger players use bigger lorries && reduces their delivery times(weekly) while shopkeepers can buy goods every other day(no enough capital).
7. Technology - It might seem expensive upfront but can save you hours && lots of operational headaches.
8. After a while, find a niche product or a product that is relatively new to the market(milk, flour) and become their sole distributor. It will insulate you from the competition && protect your margins if you can market and “push” their products. Don’t do this for a bad product.
9. Find a town that is not that competitive and set up shop.
   For more advice, I can send you my rate card. :):D. jk

There’s a guy I know personally who started this kind of biz over 10years ago…he has grown steadily to become a millionaire with over 10fleet of lories and 4 transits trackors… currently this kind of biz is a different ball game due to competition…

[BSMZOMQSOZ]

@mr shairman

There’s a guy I know personally who started this kind of biz over 10years ago…he has grown steadily to become a millionaire with over 10fleet of lories and 4 transits trackors… currently this kind of biz is a different ball game due to competition…

It’s still possible right now to do so thanks to the 1.) crazy population growth 2.) horrible last mile logistics 3.) New companies with new products coming up 4.) Kenyans opening shops all the time.

[Mboch_Kiburi]

@BSMZOMQSOZ

1. t’s a volume business. Margins are very thin for most products and so you have to move lots and lots of products. For example, you might buy a bale of maize flour from Unga for 1200 and sell it for 1230 - 1260. So you will need to sell around 1000 bales to make 30K(before taxes and your costs). To sell that, you need about 200 shopkeepers who buy from you monthly.
2. Price. Price. Price. Shops will buy the cheapest goods. Even if its 5 shillings cheaper. So it’s easy to get dragged down into a price war.
3. You need capital. Lots of it. For example, if you buy 1000 bales from Unga(cost == 1.2M), they might sell it to you at 1180 and not 1200. You buy 2000 bales the price goes to 1160. So your competitors might kill you if you do not have the capital to buy goods in such quantities because they will be cheaper .(point 2).
4. Hedge yourself. You might buy Unga for 1200 this week, then govt does something and the price goes to 1100 next week. You might find yourself very quickly with things you can’t sell. The opposite might happen and you will be smiling all the way to the bank. Sugar is very very notorious with this.
5. Operations - you have to be there to run this business. You have to look at the money coming in(easier part) and the goods going out(harder part). Your profits might be 1kg of sugar in the 50kg bag and if you loose a kg here and there you might end up closing down.
   Some strategies I can give you for free:
6. Use smaller delivery vehicles e.g motorbikes && tuk-tuks to do deliveries. Many larger players use bigger lorries && reduces their delivery times(weekly) while shopkeepers can buy goods every other day(no enough capital).
7. Technology - It might seem expensive upfront but can save you hours && lots of operational headaches.
8. After a while, find a niche product or a product that is relatively new to the market(milk, flour) and become their sole distributor. It will insulate you from the competition && protect your margins if you can market and “push” their products. Don’t do this for a bad product.
9. Find a town that is not that competitive and set up shop.
   For more advice, I can send you my rate card. :):D. jk

5. You need to be hands-on, micro manage and you’ll go broke very fast.

[revisionist]

@Mboch Kiburi

5. You need to be hands-on, micro manage and you’ll go broke very fast.

In my book the risks are simply too high. Because one can be displaced by a competitor with deeper pockets because the sector has no loyalty. Price and credit rules. :D… I guess I don’t fit the risk profile for this venture.

[Mboch_Kiburi]

@revisionist

In my book the risks are simply too high. Because one can be displaced by a competitor with deeper pockets because the sector has no loyalty. Price and credit rules. :D… I guess I don’t fit the risk profile for this venture.

This needs one to have shark’s skin and steel balls. But I believe kila mtu ako na area yake, kuna watu wamekua millionaire na hii kazi, starting from very humble beginnings. Biashara ni yenye itakukubali, and where you flourish, there are others who have failed, are failing or will fail.

[revisionist]

@Mboch Kiburi

This needs one to have shark’s skin and steel balls. But I believe kila mtu ako na area yake, kuna watu wamekua millionaire na hii kazi, starting from very humble beginnings. Biashara ni yenye itakukubali, and where you flourish, there are others who have failed, are failing or will fail.

Well I might not have the sharks skin but the steel cojones are not lacking :D…

But you are right. Kila mtu ako na biashara yake. Ile itamkubali…

[BSMZOMQSOZ]

@revisionist

In my book the risks are simply too high. Because one can be displaced by a competitor with deeper pockets because the sector has no loyalty. Price and credit rules. :D… I guess I don’t fit the risk profile for this venture.

Do not be afraid of the competition. There are a lot of gaps/opportunities in this market that you can use to your advantage.
Halafu the best way to look at risks is the rate of return. Margins here are generally low because come rain, sunshine, corona, or no corona people will need to eat. Hence lower risks. But if you sell TVs, then your margins have to be higher because you do not know if people will buy that tv.

The risks that are in this sector are mainly operational. But again, venye @Mboch Kiburi has said, kila mtu ako na sector yake.