Before we proceed to the detailed step by step how to start, let's first of all look at the merit and profit potential of this business using Dangote cement supply as study case. Like I said before, it's one sure business that everything in it almost seem guaranteed and I can assure you that people who are already doing it are making good money.
|Sample of Dangote Cement|
A bag of Dangote cement from the factory goes for N1,000 with the minimum buy of one trailer load (600 50kg bags) quantity that cost N600,000 only. If you supply the six hundred bags at the retail price of N1600, you will be making profit of 600 x 600 = N360,000 from the single one trailer trip. When you subtract the cost of transportation, your take home becomes N300,000 per trip
If you decide to sell wholesale at the cost of N1,350 to retailers, your profit would be N350 x 600bags = N210,000 from a single trip. When you subtract the cost of transportation, you will be left with N150,000 per trip.
Now tell me - N150,000 to N300,000 gain per trip from investment of N600,000 without complex logistic and workforce, is it a good or bad deal? Write your answer as comment below and let's know how you feel about this. But in my own opinion, I believe it's a very good business.
If you supply 10 Trailers within any period of time, you are going to be smiling home with N1.5m to N3million depending on the method of supply.
To Start as a Distributor
1. Distributor - You need to fulfill certain simple requirement to become Dangote Cement Distributor. In effort to ensure distribution of cement all over Nigeria, Dangote Cement is currently seeking credible distributors form any part of Nigeria. In this regard, credible means, individuals who owns a registered company that is, whose business is registered with the Corporate Affairs Commission of Nigeria.
To qualify to apply as Dangote distributor, you need to put the following things in place:
Register your company with Corporate Affairs Commission
Read: How to Register Your Business in Nigeria
Once you have your company registered which is very simple to do and requires just little amount of money. Just about N50,000 plus waka waka will do that for you if you want to do it yourself. When you have that sorted out, the next is to open a corporate account in any Nigerian bank with the company name.
Open Business Account in any of the Nigeria Banks of your choice
To open a business account in Nigeria, you would require a clearance from EFCC's Special Control Unit against Money Laundering (SCUMIL) to ensure that you wouldn't carry money go hide in oversea :D
After that, you go to Federal Inland Revenue to get Tax Identification Number (TIN) which shows that you are willing to pay tax.
These are the two major requirement for opening business account in Nigeria, the bank will tell you other things you need to do. Within moments after you've provided all what is of you required, your account will be open. Then you get reference letter from the bank and proceed to Gangote.
Dangote Registration Requirements
Please ensure that you have the soft copy of the following documents before you begin Application:
1. Certificate of Company Registration from the Corporate Affairs Commission
2. Application Letter to become a distributor
3. Scanned copy of the Bank reference letter
4. Passport Photograph of the company's Proprietor/MD
5. Passport Photograph of the company's Representative
48 hours registration period guaranteed
Minimum purchase of one trailer i.e 600 bags monthly on cash & carry basis
No Application/Registration deposit required
|Trailer Loads of Dangote Cement ready for supply|
What strikes me here is the "cash and carry" clause after going through all the rigor to register company and get reference latter from the bank! If I am buying to pay you cash, why make me go through these process, or is it the Nigerians usual way of playing gods when the power is in their hands? Please kindly make us understand.
Anyway, this will be for next article but for now, lets proceed with our business.
Other Logistics You Need to Put in Place!
Whale House - Except you have standby customers you want to supply, you need a secure place to house your product. Get a whale house or any big shop that can accommodate minimum of 600 bags.
Some but theirs in open place and cover it with tarpaulin for safety but that depends on the quantity you are buying, if you are buying very large quantity, you'd need to get a big whale house.
Arrange for Supply Vehicle - If you can buy yours, that would be nice. In fact, it is another business on it's own - whenever your customer buys, you'll supply them and make extra money from the transport and load fee. You can use it as marketing tool to sell faster than others by offering free delivery to customers buying certain quantity.
If you can't buy yours, just arrange for regular customer who would be assisting you get the cement to the final destination.
Apart from these two, there is no other much things to worry about. Get down to business and starts making money asap.
2. Retailers - A retailer don't need to go through all these process of application. Once you have your money, you are good to go.
Go to the nearest depot and buy your cement and begin to sell. Each bag of cement you sell, you make profit of N250 - N300 which a good deal considering that you do nothing more than go carry your cement.
You need to have a shop by the roadside or near new site where building projects are ongoing in number.
Many people sell as retailers even without a shop especially those that leave near the road. All you need to do is to raise up the ground a bit with blocks and cement, plaster the ground and put some container woods.
You can build iron protector around it if the place is unsecured to avoid thieves visiting at night.
One thing very good about cement business is that a single customer could buy hundreds of bays sometimes, giving you instant profit without breaking sweat.
Note: We used Dangote as study case in this article. However, there other great cement companies out there. If you think the process of distributorship application is more simple and straight forward in your company, write detailed article about doing business to you and send to us. I'll be glad to publish it here with a bottle of coke.