How to Start Rice Distribution Business in Nigeria to Make Millions

Filed in Education by on December 3, 2021

– Rice Distribution Business –

You might be thinking that is never possible. Allow me to bring to your acknowledgement that it is feasible to make millions of Naira from the rice distribution business in Nigeria. Just follow the tips in this article below.

How to Start Rice Distribution Business in Nigeria to Make Millions

Rice is the most consumed staple food in the whole world. This shows that any rice-related business anybody invests in; whether rice farming, rice hulling service, or wholesale distribution of rice will definitely have a ready market for the product or services.

I will focus on the rice distribution business in this article including why you need to start a distribution business and how to get started and become a big-time wholesale distributor of rice.

Things You Need to Start

In order to start and run a smooth distributor business, you need to get the following things in place;

1. You can Be 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 very large quantity and at the cheapest possible rate so that you can still make profits after spending for the logistics involved in getting the rice from the supplier to the retailers.

2. Warehouse

Most times, you don’t get to sell of 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.

3. Capital

To become a wholesale distributor, you need to buy in very large quantities 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, your sell to the retailers and pay them off as soon as you are done with the sales.


4. Transportation

As the distributor, you may have to be in charge of transporting the rice from the rice farm to your warehouse or delivering it to customers when orders are placed.

You may need to get few trucks to handle the distribution process or you can strike an agreement with a logistic company to take care of the transportation process.

With these four factors in place, you are now set to start your distribution business. The next subsection will be on how to start a rice distribution business.

Major Reasons for Investing in Rice Distribution Business

1. Rice is not a perishable food like vegetables, 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 2021, it will be about a 200million people.

The statistic shows 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.

4. Rice is an essential commodity, almost like salt and sugar. No wonder even billionaire businessman Aliko Dangote is investing $1billion in integrated farming. You can hardly go wrong with this business.


Rice Distribution Business Plan and How to Get Started

The prospect of rice distribution business in Nigeria is very green for any investor who is currently searching for a business to invest in.

Are you a business minded individual who is interested in distribution or supply business? Then consider taking Rice distribution or supply as the special business that will enable you smile to your bank.

You will agree with me that there is hardly a household within Nigeria that doesn’t eat rice. This means that there will be good returns on investment in this business.

The importance of rice to an average Nigerian can never be overemphasized. This article will dwell on rice distribution or supply, and why you should consider it as an excellent investment opportunity.

1. Carry out Feasibility Study

In as much as any rice business have an available market, you still need to conduct a feasibility study on the demand for rice in your location.

You need to find out if there are retailers who are available to buy your rice produce and how fast they sell out to consumers.

This will help you have an idea of the market you have in your location; though you are not subjected to a particular location as a distributor because you should be able to distribute fast and wide within and outside your country wherever there is the demand for your product.

2. Get the Necessary License Required to Become a Distributor

You may be required to get some sort of license in order to operate as a wholesale distributor in some states. Find out the license and other legal formalities applicable to your state and get them.

3. Get Your Supply of Rice from the Rice Farmers

After you are done with your feasibility study and you are sure that there is an available market for your product, it’s time to contact your supplier to supply the first consignment of produce for you.

When you get the product, you can choose to repack them to become your own brand. The branding may involve packing the rice in personalized sacks.

4. Promote Your Products to Retailers Around

At this stage, you are done with the licensing, supply, and branding. It’s time to find retailers and promote your product to them.

Also, chances are that they already have other distributors they buy from, so you have to give them a reason to patronize your products; some incentives you can give to retailers to make them buy from you include:

• Free Samples-: Some retailers may be afraid to order from new distributors whom they don’t know the quality of rice they have to offer; one to get around the issue is to offer a small bag of rice; let’s say 2kg as a sample to any retailer who feels is a potential customer.

‣ Discount: You can also offer to give some percentage discount for any distributor that will order a certain number of bags, or that can refer other distributors to buy from you.

• Free Delivery: You can offer to give retailers free delivery services to any destination of their choice if they can order a certain number of bags of rice from you.

‣ Payment on Delivery: You can offer this service to retailers who are in another location to build their trust; you ship out the product and they pay once they get to see it.

• Credit Supply: When you get a few regular retailers with that large customer base, you can make a deal to supply them on credit for them to pay back after-sales.


5. Accounting

When the business is up and running, you need to have a good accounting system to keep track of income and expenditures.

This will help you keep track of the business progress and to make amends in financial structures when necessary.

Consider this piece of information and invest wisely. We therefore wish you success, as you build your dreams!

With a reasonable sum of money, you can delve into the business of rice distribution. Take note that the probability of breaking even in this business is higher than the probability of failing.

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CSN Team.

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