How to start egg supply business in Nigeria
Egg is always in demand and will continue to at least till China make a fake egg (joking).
There is no one to thank for the increase in demand other than researchers who continually expose the hiding nutritive value of egg and doctors who see the power of egg and recommend it to their patients.
All the chain of egg business is lucrative, from farming to whole seller, processing and retailer they are all lucrative though that’s if entrepreneur is ready to work.
While farming is the most lucrative of the chain, many people can’t go into because of the risk, imagine leaving your birds healthy in the night and waking up in the morning to feed your birds but alas 10 have died without any warning, as it is lucrative so the risk.
This leave us with egg distribution that have high chance of being a success and not only that you don’t have to confine yourself to bush or villages.
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So how do you start egg business?
Egg business is not that hard to start but it might require six figures capital. Before we go into the detail of starting egg supply business I will like you to take note of the following.
Operation of egg distribution business
Egg distribution is simple, you buy from farmer and supply the retailer or sell it to final consumer.
Sometimes you might need to store it if buyer is not available.
Note: The longer your egg stay in storage the more its losses nutrient.
Who are your customer
Below are the group of people you can sell your egg to
Restaurant
Bakery
Supermarket
Retailer
Industry
Fitness center
Cosmetic company
Equipment needed to start egg distribution business
Crate
Vehicle
Steps to starting egg distribution business
Feasibility study
Carryout feasibility study in your proposed location this will show if egg supply business is profitable in that location and how profitable it is.
Include the following questions in your feasibility study
What is the purchasing power of the dweller?
Is it accessible by road?
How is the competition, can you beat it?
Who are your target customers?
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Business plan
Put into paper your vision and mission for the business, where do you see your business in the next 2-5 years and most important how do you intend to get there.
Though there is high chance that your business plan will get knock on the face before the third year, it is still advisable to write it you never know when loan or investment opportunity will knock on your door and I’m sure you will want to take your businesses to next level.
Register your business
If you want to operate small scale egg distribution, you don’t need to register but if it is large scale, you need to register your business with Cooperate Affairs Commission to avoid future confrontation.
Also you don’t want to miss out on grant and aid.
Location
Your location should be closer to your source of raw material which is egg, you can easily transport your egg to your customer, but if it is far from farm, you might not be able to secure egg during scarcity.
What of our Agreement?
Haaa, I thought you are no longer coming and moreover we are having problem with our layers”
This is exactly want I used to say to egg vendor who couldn’t make it on time to farm. Try to get near your source of raw material it is crucial.
Staffing
If you are operating large scale you will surely need workers. When hiring look for people that have work in farm or egg distribution center like yours before, you don’t want them to use your egg to practice.
For instance there is way of turning egg from one crate to another, a new employee will either be slow as snail or brake your egg in the process of turning.
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Marketing
Egg distribution business operate on B2B model (Business to Business) so the best way to secure customer is to move out of your shop or center, look for customer and give them unrejectable offer e.g you can reduce the price of your eggs or make them promise that you will supply big eggs, detailer like big eggs a lot perhaps because it is more profitable than the smaller one.
Any way if you do your feasibility study well, you shouldn’t have problem with marketing because you would have know your customer and how to get your product across to them.
Profitability/Cost analysis
If I put in certain amount of capital how much profit will I get?
Is that your what in your mind?
Well, below calculation will answer your questions
During the time of writing this article, 1/crate of eggs is between #1500 to #1800 from farm, but let use #1500 for ease of calculation.
Let say you buy 100 crate of egg
100 crate of egg = #1500 * 100
= #150,000
Labour cost = 6,000
Transportation cost = # 4000
Total cost = #160,000
You sell at #1,800
Revenue = #1,800 * 100 crate
= #180,000
Profit = #180,000 – #150,000
= #30,000
At least you should be able to sell 100 crates in a week.
In 1 month you will have #120,000.
If you add your profit to purchase more eggs you will have compounding effect which means more profit.
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Tips and trick in egg business
Depending on your negotiation skill you might not need large capital, you can collect egg from farmer and pay later.
Tips those farm attendant regularly, during scarcity that will be your saving grace.
To know how big eggs in the crate are check the four angle and the square.
Challenges of egg business
Capital intensive
Egg businesses could be capital intensive if starting large scale.
Solution
Start small
Short shelf life of egg
You need good storage to store eggs and its should not stay more than 1 week in storage.
Solution
This is a marketing issue, make sure you do your marketing well. Also demand less of what your customer demand, some of them might change their mind especially during glot.
Seasonality
Egg is seasonal, there is period of glut where demand is lower than supply and scarcity, where demand is higher than supply usually between November to January when farmer would have sell their birds.
Solution
Know your business in and out to avoid loss.
Conclusion
Egg business lucrativeness has proven time will that out number so be rest as sure that you will make your profit as long as you follow the steps above.
