Soft drink is the go-to drink for all sorts of events here, marriages, corporate events, birthdays, etc. The distribution of Coca Cola drinks and its other affiliate products (e.g. Fanta, Eva water, etc) is a very marketable business because the demand for soft drinks is not slowing down. Here is a guide to starting the business if you are considering becoming a Coca Cola distributor.
- 1 About the Product
- 2 Steps to Becoming a Distributor
- 3 Startup capital requirements
- 4 How profitable is Coca Cola distribution business?
- 5 Coca Cola distributorship companies in Nigeria
- 6 Marketing
- 7 Conclusion
About the Product
The Nigeria Bottling Company came into being as a franchise bottler to Coca-cola company in Nigeria in 1959. The company now have 13 bottling plants, 28 commercial territory as well as 57 distribution depots in Nigeria.
Without prejudice to any soft drinks, Coca-Cola products are by far the most loved, consumed and highly patronized soft drink brands in the whole of Africa.With lots of varieties being produced, the Coca-Cola company’s beverages have gained enormous amount of loyal customers based over the years.
Hence, this has made the company the number one choice for many people. The business is a lucrative and profitable business venture that comes with lots of profit. Nigerians have been consuming Coke, Fanta, Bigi Cola, Pepsi Cola and other major Coca Cola products for over a century now.This have made the Coca Cola Nigeria to dominate the soft drinks market over the years.
Steps to Becoming a Distributor
Get your business registered
An important aspect of becoming a Coca Cola distributor in Nigeria is having your business registered. This is the only way Coca Cola will be transacting business with you; as a legal entity.
To get this done; you need to register your business with the Corporate Affairs Commission of Nigeria ( CAC), to have your business formally incorporated. The process doesn’t take more than one month. Just pick at least two business names that are favorable for you, get to any CAC office closer to you and that’s it. You will be asked to pay a processing fee of not more than N50,000.
Open a corporate account
Is your business registered? The next big step is opening a corporate account for your business. This account will serve to fund all your company’s transactions, and in most cases, you may be required by Coca Cola to provide proof of this.
A very easy process to complete actually; you can simply visit any bank that appeals to you, request to create a current account, and the rest shouldn’t be too difficult. Your passport photograph, CAC certificate, means of identification ( voter’s card, driver’s license, national ID, etc) and other relevant documents will be required to complete the process.
Write a business plan
A necessary ingredient of any business is an effective business plan in place. And with good reasons. This will especially come handy for sourcing funds from financial institutions, angel investors, and other like finding options for startups. Without a business plan it’s almost impossible to successfully run your business. See it as a map to guide your business operations through a projected future.
Locating your depot
Ensure that your depot is located closer to your target customers. This will make it easier for you to supply them and for them to easily reach you when need be. Keep in mind that you will be in constant transportation of products, so you want to ensure that your depot is located in an accessible area with good road networks.
The depot outlay
The depot must have been built specifically for this purpose because it needs to be big enough to store up the contents of one long Coca Cola truck. With the minimum space requirement for the store being 104-metre cubes in volume, which is about 16 metres long and 3 metres wide. It should have a parking area which is wide enough to accommodate one long Coca Cola truck or two smaller ones, with enough space in to allow for the free movements of workers during the to and fro hauling of crates.
Startup capital requirements
The minimum requirement for Coca Cola distributorship business is about N2 million, if this sounds too big for you, then it makes sense to partner with someone.
- Following are some major startup requirements for Coca Cola distributorship business;
- When buying the drinks for the first time, you are to pay for the bottles and crates
- Put into consideration all the operational aspects of running the business such as getting supplies, the delivery, sales, and distribution
- Handling crates. You want to take utmost care when handling your crates, else you will have to replace them anytime they’re broken or missing
- Handling receipts. Contract a printer to create a receipt for you. This is an unavoidable cost.
- Always trade in different sizes of drinks like 35cl, and 50cl, etc; and different drink containers like canned drinks, bottled drinks, plastic drinks, etc.
- Free branded items for Coca Cola distributors. You are allowed to request for branded materials, such as branded flex, branded push carts, banners etc.
- 7 like 35cl, and 50cl, etc; and different drink containers like canned drinks, bottled drinks, plastic drinks, etc.
- Registering with the company
- To apply with Coca Cola as their distributor, follow these steps:
- Visit a Coca Cola company
- Request to fill a distribution form
- Deposit the minimum capital sum
- Follow any specifications
- This is a simple step to step guide to registering with the company, and within a few weeks; all things being equal, you should be approved and granted distributorship rights.
How profitable is Coca Cola distribution business?
The profitability of Coca Cola distribution is majorly based on the volume of sales you make. This is so because in most cases, you just get to sell at a profit margin of N50. Meaning that if the company sells to you at N1000 per crate, you can only resell at N1050 per crate, which may sometimes appear little, but it’s not.
So, if you can sell up to 2000 crates on a daily basis, it can help to add up your profits, that is N50×2000=N100,000 on a daily basis.
Nevertheless, Coca Cola will always pay its distributors rebate per sales volume. The minimum is 3% per unit for 300 crates or cartons. This commission increases per unit, i.e, 4% per unit for 400 crates, 5%, 6% and so on.
Coca Cola distributorship companies in Nigeria
Below is a list of some Coca Cola distributors in Nigeria:
- Startup partners Africa.
- Nigerian Bottling Company
- Abuka and partners
- Akerele Mega Mdc
- Coca Cola depot
While Coca Cola doesn’t require excessive marketing due to brand recognition; you, however, have to follow in the company’s tradition on advertisement and rigorous marketing.
With this kind of high profile, high – demand product, you are sure to always receive huge patronage. Still, partaking in promotions and any ongoing trends is sure to boost your sales volume.
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