How to start a wholesale foodstuff business in Nigeria

Wholesale Foodstuff Business In Nigeria

This article was updated on 22 September 2020

Do you want to start a wholesale foodstuff business in Nigeria? What is the process involved in starting a food supply business?

How do you want to start a food supply business?

If you need all the answers, then read the detailed article to the end to see all the required necessary steps required.

I have received several emails by entrepreneurs who intend to venture into the raw food business in Nigeria and where to get it at a cheap price.

The foodstuff business in Nigeria is one of the profitable sectors of the economy in Nigeria. This is largely due to the fact that everyone needs to eat at least twice a day.

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In fact, according to the consumption expenditure of 2019 released by the national bureau of statistics, Nigerians spent N40.20 trillion on food. This is representing 56.65% of the total expenditure of the year.

This shows that there’s a market for anything you have to offer.

However, the need for a certain type of foodstuff may differ from one location or the other.

Even though there is a market for wholesale foodstuff business, this business will depend on demographics. This simply means the type of food that’ll be in high demand in one location might not be so in another location.

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Your job will require you to do your due diligence before jumping into the business so that you don’t invest your money buying something that does not move fast.

And before you’re just starting, tying your money on foodstuff that doesn’t sell faster will slow your business grow and will take you longer to build a significant customer base.

In addition, you must be able to know the age group that is dominant in your target location and the things they buy the most.

What is wholesale foodstuff business in Nigeria?

It’s important to understand the aspect of foodstuff business we’re discussing, considering how vast the food sector is.

So what is wholesale foodstuff business in Nigeria?

This is a type of business where you buy food in bags and then sell it at retail to customers.

Your customers can be individuals, restaurants, hotels, schools, etc.

Due to the popularity of the wholesale foodstuff business in Nigeria, there is still room for more entrepreneurs to invest and profit from the business.

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Why starting a foodstuff business in Nigeria is a great idea

  1. Can be done anywhere

The foodstuff business is one of the businesses that can be done irrespective of the location. No matter the location, whether in the rural or urban location people need food to survive.

However, because the wholesale foodstuff business is highly competitive, you’ll need to make your business unique in other to stand out from the crowd.

What is the customer problem your business is solving that can attract more customers? You have to be innovative and put yourself into the customers’ shoes.

  1. Foodstuff is needed on a daily basis

Food is needed daily to maintain our daily body functioning and optimum health always.

Not only among humans, but animals also need food to eat. With many animal farms being established, this has made the demand for food to increase on a daily basis.

In addition, there are several food processing companies springing up on a daily basis who are creating value chain from raw foodstuff through processing.

These companies will be in need of foodstuff always before they can operate. This is opening new business opportunities in the food industry. As you grow, you’ll need to partner with such businesses.

  1. You can make a profit from the business

If you start the business, there is every chance of making a profit from the business.

However, this is in no way trying to tell you that the business is a get rich quick scheme. But when you develop a solid business foundation, you can be sure to grow the business from nothing to a profitable one.

That’s not to say setbacks may not arise but even in that, use it as a learning step and motivation to build your business and take it higher. Look at your strategy and see where you need to improve it and believe me you’ll be back on top in no time.

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Now that you’re ready, let’s dive into the step by step process required to set up a business.

The step by step process of starting a wholesale foodstuff business in Nigeria

It’s time to get down to business. However, like any other business, you’re not expected to go into it without proper planning.

The saying without planning you’re planning to fail is through. That’s why you’ll need to prepare yourself and resolve that you’re going to do it.

You have to be consistent, focus, and put it at the back of your mind that success will come gradually.

The following steps below show the complete step by step process of starting a foodstuff business in Nigeria.

  1. Decide on a business location

If you’re interested in the foodstuff business in Nigeria, then the location is really important.

This is because your location will ultimately decide where you can buy the foodstuff when starting the business.

For instance, if your location is in Lagos, you can go to places like the Alaba Rago Market, Ojo, where you can get beans, rice, millet, corn and other grains at a cheaper rate.

Another option is to visit the local market closer to you in a rural community to get the raw foodstuff at a cheaper rate.

An important factor in choosing a business location is the accessibility to customers. This is particularly great for those trying to find a static location. Your location should be easily accessible to all forms of computers.

Once you’re able to make the decision, then you’re ready to move to the next step.

  1. Decide on the mode of your business operation

This is really important because without figuring out the business operation of your business, it’s going to be difficult to operate the business effectively.

You can decide whether your mode of operation can be to be a door to door delivery, delivery to hotels, restaurant or find a static location for the business where you sell for individuals, etc.

For example, a group of young guys decided to sell tomatoes during the Christmas holiday. The challenge is many of the people they’re targeting have places where they go to buy.

So they decided to change the mode of operation by telling their prospective customers that they can bring the tomatoes to their doorstep and will be cheaper.

When they started, from door to another, the demand began to go up and even reach a stage where it became difficult to meet their customer demand. So they have to hire two more people to help them.

This single strategy even took them into the house of the number two citizen of the state.

The difference here is they change the mode of operation. Instead of the customer to come to them, they decided to take it to the doorstep of the customer and at a cheaper rate.

The customers valued it because they reduce the stress of going to the market and the risks that’s why they subscribe to the business model.

You have to be innovative in your mode of operation and can be what will make the difference.

For most beginners, they start the business by selling from a static location then scale it up.

When you’re able to figure it out, then move to the next step.

  1. Write a foodstuff business plan

Well, this is really important as a foodstuff business plan will help you keep everything and all calculated figures on record.

Your business plan should include the following:

  • Decide on the type of product you intend to sell. There are several reasons and factors to consider here. But the importance of them is the knowledge and demand of the product.
  • Then decide on the amount of money you need to spend on the business startup project.

However, these may vary according to the product you choose. Some may require more startup capital than the other.

  • Then write your projected profit and future expansion of the business.

Well, we’ve outlined all the steps required to write a great business plan for any business of your choice.

  1. Register your business

To ensure that you have a business name, you’ll need to register your business with the corporate affairs commission and also register to other relevant institutions.

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The reason why this is important also is when you intend to become a major supplier of foodstuff to hotels, restaurants, food processing companies, they’ll need you to be fully registered to ensure that you’re legit.

Then move to the next step of the process.

  1. Set up your wholesale business location

Now it’s time for you to set up your business location. This setup will ensure that you place products based according to their type.

Some so make the setup on tables, others make customized trays to display the foodstuff.

If you don’t have any idea about how the setup will look like, then you can visit similar locations and see how the setup looks like and then create a prototype of it which will be used to set yours up.

  1. Get a delivery van

If you’re to supply to schools, hotels, restaurants, or food processing companies, then you’ll need a delivery van.

For starters, you may not have the money to acquire one for yourself, but you can always use a commercial van that can make the delivery for you.

  1. Buy the foodstuff

Go ahead and buy the foodstuff since you have everything set up properly.

When buying, it’s important you go in time to do a survey of the prices before making a decision.

One formula that has worked for me is to go to the market early (during the market days), do a survey, then relax. After some hours, or at the verge of closing the market, I go in and buy at a lower rate from desperate sellers who want to sell by all means.

The downside to that method is this. You may not find the best of grains at that time and in cases where there are shortages of foodstuff in the market, you may not find any to buy.

Well, that’s why you have to survey the market before taking the ultimate decision.

  1. Hire employees

Now your business is getting set to start. But you’ll need to employ the staff that’ll need to help you in running the business.

But you have to write all the rules and what each worker will do when they’re employed in the business.

If you’re not going to do it immediately, then you need to keep that in mind as you’ll need to employ as the business grows.

  1. Start selling the goods and make profits

Open for business and begin to sell your products. Business grows as the hours, days increases. As the number of customers grows, so will be the profit of the business.

  1. Advertise the business


Advertisements can come before the last option. Well, the advertisement is an important part of your business. to get more people to patronize your business, you’ll need to let the voice out.

You can begin the advertising by telling your friends and family, make some flyers, and distribute to potential customers.

Visit hotels, restaurants, schools, and submit a foodstuff supply proposal. Ensure you do it to several of the places involve to boost your chances of getting more than one place to supply foodstuff. Give some time and so a follow up to see whether your proposal has been approved or not.

Challenges of wholesale foodstuff business in Nigeria

Like any other business, there are some challenges of wholesale foodstuff business in Nigeria. This is not in any way trying to discourage you, but to ensure that you’re better prepared for the business.

These are some of the business challenges you may likely face in a foodstuff supply business.

Fluctuating prices

The prices of foodstuff may not be the same all the type due to several reasons:

  • When the foodstuff supply to the market is lower and there is more demand for the product, that will affect the prices. This scenario always happens at the peak of the farming seasons.
  • Another reason is inflation. Inflation pushes the value of the naira down which can also affect prices of the commodity in the market.

Relying on third-party suppliers

Sometimes the middlemen are the problem. You sometimes not get what you ordered.

These can be devastating and lead you to get the product that is not of good quality.

The way around this is to ensure you find the foodstuff market or farmers market to get your stuff.

Conclusion

Now that you’ve read the steps required to start a foodstuff business in Nigeria, it’s really important to analyze the market, make some tough decision,s and then start making a profit from the business.

 

Bako Yila

Bako Yila is an entrepreneur and loves working with aspiring entrepreneurs the right way. His blog offers business idea and resources to build a successful business.

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9 Responses

  1. Chrysolite Haven says:

    Chrysolite Haven produces Ofada Rice, we are engaging distributors, if interested please contact us via chrysolitehaven@gmail.com Phone numbers: 09025589996 / Whatsapp:09052288627. Regards

  2. odili ifeanyi says:

    i love this article… i will be happy if the writer can text me on whatsapp. got so many things i want to ask and talk about.

  3. chikelu elizabet says:

    Can highly motivated I think now I can also plan to start mine may God bless u

  4. Amaka chris says:

    I love the write up. I believe it will help a lot. Thank u so much.

  5. Sordum says:

    Nice. I am thinking of starting a food stuffs business and I am motivated by this

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