They say you can’t start because it is great, but you can be great starting. This is a mentality that in fact has created great commercial intra -entrepreneurs around the world.
Take, for example, the business of supplying products of rapid movement, such as cakes, mandazis, soft drinks and bread, among others, of the manufacturers that require a small capital to begin.
In fact, a The product route to the market is one of the crucial factors that each manufacturer considers in their search to clarify sales when bringing their products to consumers.
This is where you come as a distributor by becoming a distributor subcontracted by the designated agents or doing so only buying as wholesaler.
In both approaches, it does not need to own a company under which it operates, but a capital of SH50,000 that can easily obtain if you have been making some savings with cooperative savings and credit organizations (Sacco) or otherwise.
The benefit of being a member of a Sacco is the ease of accessing loans, since they grant up to five times the amount saved that allows a very good capital base for the business and low interest.
With this money, it must, first, to identify some of the small stores or resellers and what products they sell, since its main objective markets would be before configuring or renting a store where they will easily locate it.
In the Central Business District of Nairobi (CBD), for example, you can get a 50m rental store2 as low as SH1,500 per month or SH200 per square feet of rental space.
Then you will need some means of transport to move your products and because you want to start by little, avoid a collection or a car, hire a Tuk-tuk (three-wheel vehicle) or a motorcycle that can be loaded sh1,000 per day, depending on the weight of the load since they are intended for short distances.
The load weight equivalent to that of three passengers is loaded SH50 depending on the distance.
When this is done, you can approach the manufacturer that produces the products in which you want to trade or its agents and buy the wholesale goods for distribution.
The baked mandazis such as the known KDFs are always full of 60 per package. This is the same as small cakes that are always sold in SH10-20 in small stores.
You can acquire them from bakers to SH45 per package and then distribute the shoals to SH5 to Packet.
Assuming that I can carry no less than 200 packages of this type in boxes on their motorcycle on one occasion, you will get a gross gain and sh2,000 in a day if you have two trips in the morning and night.
Alternatively, a piece of wholesale bread will cost Sh43. Then you can distribute it to small stores in SH48 getting Sh5 per bread.
Now, a box has about 10 pieces of bread that translate to SH50 per creation and assuming that it can distribute up to 100 boxes per day (on the lower side), will take home sh5,000 gross income per day.
As it grows and wishes to be more formal, it is good to keep in mind that of the various distribution channels, manufacturers often name a third -party distributor to carry out this function by celebrating what is known as distribution agreements.
A distribution agreement establishes the contractual relationship between a manufacturer and a distributor that details the terms under which the distributor can sell the manufacturer’s products in a given market.
Product distribution laws
Do not trade blindly or otherwise it will be put on the wrong side of the law. Like any other business, the distribution of products is also protected by law.
According to the Competition Law, the number 12 of 2010 (the law) is prohibited restrictive or anti -competitive commercial practices that may affect trade within Kenya.
In this action under Kenya’s law, distribution agreements are considered vertical agreements within the production or distribution chain.
Consequently, they are able to involve negative commercial practices that affect competition. These practices in distribution include the unreasonable increase in the cost of production or distribution of basic products that result in higher market prices, pricing in sale price, misleading or misleading advertising or any other commercial condition and minimum prices configuration in the form of retail price maintenance.
To comply with the Competition Law, the parties must be interested in ensuring that the provisions and terms of exclusivity that restrict the minimum resale prices are fulfilled.
This is because if it is convicted, it will be responsible for a fine of up to SH10 million or prison for a period of up to 5 years or both.
Although this normally applies to the big players in the distribution chain, it must also ensure not participating in unfair trade, since it can negatively affect reputation and the whole business.
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