10 Profitable Distribution Businesses to Start with 5 Million Naira or Less

Are you looking to become a product distributor in Nigeria with a capital of at least 5 million Naira?

There are several industries where distributorship thrive and you can make good money. In fact, a few of them are so profitable that they have to be well scrutinized and managed by the parent company.

Even though a distributorship is different from a franchise, companies would usually create requirements for new distributors such as proximity between two depots, competing products in the same location, and available capital from intending distributors.

In this post, we'll be looking at a few distribution businesses that have proven to thrive in Nigeria and have a history of bringing reasonable profits for distributors.

If you're interested in this kind of business, then the following ideas might give you a clue on getting started.

Table Water Distribution

This is one of the easiest and most affordable distribution businesses you can start in Nigeria today.

Table water distribution business can be started with less than 2 million Naira, and there are no special requirements to get started.

You could start as a pure water distributor, or a bottled water distributor, or even both, depending on available capital.

Beverage Distribution

My family used to own a beverage distribution business, and I know first hand how this business works.

As a beverage distributor, you buy directly from major breweries or sub dealers, and then sell to wholesalers.

Popular beverages in Nigeria include soft drinks, malt drinks, and alcoholic beers.

To start a beverage distribution in Nigeria, you must have a depot space, required capital of up to 20 million Naira, and be registered with the supplier.

These are not stringent requirements and you can always start small. Many of the beverage distributors in Nigeria today are merely wholesalers claiming to be distributors.

But the point is to have a business that distributes beverage products and start making money for yourself.

FMCG Distribution

Fast Moving Consumer Goods (FMCGs) are like the gold standard for distribution business. These products sell fast and there are opportunities to start with a single line or niche of product and grow from there.

It is important to note that FMCG distribution is not the same as running a supermarket. Rather, you sell to supermarkets and other retail shops.

In recent years, FMCG distribution has been democratized in a way that smaller players can come into the business and still thrive.

Now, you don't need to even have a million Naira to start. There are FMCG distribution networks that have credit systems built to support new distributors who are skilled at finding and reaching new markets and customers.

Now, all you need to start an FMCG distribution business is just a small deposit, a brandable vehicle (bike, car, bus), and the zeal to work hard and make sales.

Noodles Distribution

After rice, noodles are one of the most consumed foods in Nigeria.

So, what does that tell you?

It means that the demand for noodles in Nigeria is high. So, it makes sense to start a noodle distribution business.

The good news is that there are over 5 noodle brands in Nigeria. So, you can start distributing any one or even mix things up depending on demand.

Here are some of the different brands of noodles available in Nigeria:

Indomie Noodles
Honeywell Noodles
Chikki Noodles
GoldenPenny Noodles
Minimie Noodles
Dangote Noodles
Tummy Tummy Noodles

You can start a noodles distribution business with as low as 2 million Naira and grow from there.

Synthetic Hair Distribution

Like cosmetics, synthetic hair sell like hot cake, and there is always demand from customers across the country.

One thing to note about hair distribution is that it is quite a tricky business. The demand is there, but there's always the risk of losing money if you don't know what you are doing.

So, before setting up shop, it is important you invest in learning the business first to understand the nuances of hair distribution such as:

Hair quality & types
Hair picking & packaging
Hair importation
In-demand hair brands
Hair distribution models

You can see that the business is quite complex, but once you learn all the vital aspects of hair distribution, you'll see that it's a very profitable business.

The market for hair distribution in Nigeria is quite fragmented, so you'll have to take initiative in finding the right information, people, and systema to help you kickstart your business.

Vegetable Oil Distribution

Food business is always good business, and what better distribution business to start than vegetable oil distribution.

Vegetable oils are in demand in Nigeria all year round, with peak periods around July and September.

Distributors engage in direct sales as well as storage towards sales in peak periods, which falls around the rainy season.

You could start a Vegetable oil distribution business in Nigeria with as low as 500,000 to 1 million Naira.

However, you have to initially go through a learning curve to understand the business, the market and the storage techniques needed to maximize profit.

Pharmaceuticals Distribution

Pharmaceuticals are essential products with high demand from hospitals, pharmacies, health practitioners and individuals.

A pharmaceutical distributor acts as an intermediary between a pharmaceutical marketing company and the pharmaceutical retail market.

Essentially, a distributor will be tasked in distributing different pharmaceutical products for a specific brand.

Due to the nature of the products, distributors are subjected to stringent checks and requirements, which might become a barrier to entry for many who are interested in this business.

In Nigeria, pharmaceutical distributors might be required to be licensed by the pharmaceutical company whose products they are distributing, or required to possess professional qualifications in related fields such as pharmacy, nursing, and public health.

Used Clothes (Okrika Bales) Distribution

Used clothes distribution is one of the most lucrative businesses in Nigeria. however, it still remains a hidden secret to many.

Not only is it a fast moving business, the profit margin is very respectable too.

Distributing used clothes (Okrika bales) is different from retailing it, as the distributor only acts as an intermediary between the importer and the retailers.

And there are thousands of retailers waiting to buy thousands of okrika bales, if only you are capable of making the supply.

The bales could come in different kinds, quality, and grades, and it is up to the distributor to sift through the goods and package the bales according to the quality, grade, and type that will bring the most profit.

The good thing about this business is that you can start it with no money down. It is possible to find buyers who are ready to deposit money before you make the supply.

All you have to do is simply take out your profit, pay for the goods and make your supply.

Papers & Books Distribution

I never knew how essential and lucrative paper distribution is, until I started a printing business.

The demand for papers in Nigeria, and I dare say, globally, is huge. Very huge!

If I wanted to start a distribution business today, I would most likely start a paper distribution business.

Paper supplies are usually made to retailers like bookshops, schools, offices, business cafes, and printing shops.

You could start a paper distribution business in Nigeria with as low as 2 million Naira, with costs including storage, marketing and transportation.

Fabrics Distribution

Fabrics distribution business is another distribution business that has proven to be lucrative in Nigeria.

This is another business that I wouldn't think twice to start if I wanted to start a distribution business.

Most distributors in this business own wholesale and retail fabric shops where they sell directly to tailors, resellers, and individuals.

There are several types of fabrics you could major in, such as:

Ankara
Adire
Cashmere
Batik

Some distributors supply a mix of these materials, as customer demands can fluctuate according to festive seasons in Nigeria.

It is important to note that this business is quite tricky, so you have to do your due diligence and learn more about the business and the market before putting in your money.

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