Soft drink business is one of the lucrative businesses in Nigeria and the reason for that is not farfetched; it is a norm for every party in Nigeria to include soft drink to their list of beverages and individuals are not left out, some can’t even eat without it.
Soft drink is an high demand product that people are ready to buy anywhere in Nigeria including on the road.
If you are planning to go into it but afraid perhaps you have fail other business, I’m assuring you that if you follow all the procedure in this article you will make money with this business.
Operation process of soft drink business
Soft drink business does not require complex process it is a selling and buying business.
You buy from manufacturer or wholesaler and sale to retailer or consumer, very simple but require knowledge of book keeping and some mathematics (simple math of adding your money or drinks together)
Niches in soft drink business
One of the advantages of soft drink business is that you can enter into it from deferent angle according to your capital.
Below are the niches of soft drink business in Nigeria
Here your job is to locate soft drink manufacturer or their outlet strike a deal with them and distribute it to sub distributor or wholesaler.
Usually most of the soft drinks company will require your business registration paper and some deposit.
The niche is a man know man, you need to know someone in the company before you can be a distributor though sometimes grace can speak.
It still require large amount of money to buy truck and other equipment. Most time manufacturers will deliver goods to your on credit
Sub distributors are like wholesaler they buy from the distributors and sale to retailer, it also requires large capital to start but not like distributor.
Most of the time retailer will load their goods themselves so there is no need to buy trucks.
Retailer is the best niches for those that have little capital. If you choose this niche your job is to buy from sub distributor and sell to sub retailer and road hawkers who then sell to consumer.
Retailer can target both sub retailer and final consumer depending on their business model and scale.
Sub retailers are those that sell in one or two to consumer. Usually they complement it with other products.
Sub retailer can also sell to road hawkers who then sell to final consumer.
List of soft drink to sell in Nigeria
Gone are the days when people only buy Coke, Pepsi and Miranda, now there are many brand to sell and many are still coming into the market day by day.
Below are popular and highly demand soft drink in Nigeria
- Mountain dew
- Seven up
- Choco drink
- Smoov chapman
- Energy monster
Equipment needed in starting soft drink business in Nigeria
- Show glass
How to start soft drink business in Nigeria
If you are staring as distributor you need knowledge of how things are done. Go to major distributor near you, make enquiry of how they get their product directly from manufacturer, this should not take you more than 5 to 10 days.
During your knowledge gathering you should be able to know the amount of money you will deposit before they will start delivering soft drinks to you, also do they deliver in credit (most do).
If you are not a distributor, you don’t need to worry yourself; soft drink business is buy and sell.
2) Feasibility study
This concern all the niche of soft drink business, before you establish your business you need to know if there is customer for what you are about to sell.
Because I stated that soft drink business is profitable does not mean it will be in your proposed location.
Go out and interview potential customer and competitor.
Know average of soft drink consumes per day and if they are calling for increment. Know the type of drink they prefer. Check what your competitor are doing wrong, can you do it right?
To know how to conduct and write feasibility study click here
3) Business plan
To those with ambition, it is best to write down your plan on paper, do you want to move from retailer to distributor or from distributor to manufacturer, you need to write it down and how you will achieve your goal, also if you will need loan or investment in the future, business plan will be your saving grace.
4) Register your business
If you are starting as a retailer or sub distributor you can pend this for a while, but if it is distributor you need to register your business with Corporate Affairs Commission before soft drink manufacturer can trust you, in fact they will not attend to you if you don’t meet up with their requirement.
5) Rent store or space
Store or space? It depends on your scale of production; for distributor you should go for store while other niches can go for space or small shop.
Deferent between store and space is that, you can’t carry store around if you want to change location but space, you can move your container around. Store comes with security while container did not.
6) Prepare your store
Before stocking, you need to set up your store. Put all the equipment in place and test them for any default.
Freezer or refrigerator is costly; you can go for ‘tokunbo’ to save cost. Also make sure you have generator that will save you when NEPA (Power holding company) do their things.
Stocking should not be a problem if you set up your store well. If you are distributor, you don’t need to transport your product from manufacturer they will come to you once they approve you.
For others you will need to hire vehicle that will help to transport your soft drink.
As your business grows, you will need more hands to help you. Hire someone you can trust and that know book keeping because soft drink business require calculation and recording, most of your sale will be in credit.
Also they can steal your drink so employ someone you can trust, to do this let your hiring be based on referrer, ask people you trust to refer workers to you, to make it quick you can tip them.
Marketing of soft drink is easy provided that you did your feasibility study well. But all the same you still need to put up awareness for your target customer.
Since soft drink business is location based below are the best methods to tell people about your business
Print flyers that will tell people what you are selling and your location
Locate your potential customers and tell them you have their need
Erect a sign post that will direct people to you
Reduce price of your soft drink and see how people will line up to buy.
How to increase profit in soft drink business
Below are the ways to increase profit in your soft drink business
- Sell a complementary product like gala, yoghurt, beverages, snacks and table water.
- Sell to parties
Though this is not an everyday thing, but always be on the lookout for it. If you sell to party once you will understand better.
Cost of starting soft drink business in Nigeria
It depend on your scale of production, if you want to start as a distributor you need between #1 million to #5 million naira the reason is that you will need to make deposit with manufacturer before they will deliver goods to you, though it could be on credit.
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Your deposit will be like collateral in case you abscond.
For other niches you can start with #5,000 to # 500,000
How profitable is soft drink business in Nigeria
Soft drink business is very profitable; you can make up to #2,000,000 per month on the business even more, depending on your scale of production.
Soft drink price is constant, you don’t need to argue over price before you make a sale.
Challenges of soft drink business in Nigeria
Like every other business soft drink business also has its own challenges, you need to know them and prepare a counter measure for them not until you experience it.
This can come from your employee or area boys. To solve this:
Employe trusted person
Try to give out free drinks to area boys once a while; this will turn them to your guard.
There is nothing you can do your bottle will break if you are dealing with glass bottle. To solve this buy plastic drinks
On every drinks there are expiring date once this elapse you are in trouble, don’t even try to sell it, it will destroy trust that people have in you, count it as a loss and move on.
To solve it stock what you know you can sell, do not over stock.
4) Bad dept
Drinks business thrives on credit, but sometime your customer will abscond with your money putting you into loss.
To solve this
Perform a due diligence on customers before you give them drinks on credit, know their house, their family and their shop.