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Hi there, thank you for choosing to visit this page. I promise to make it worth your time!
If you are here right now it’s because you are planning to start a small scale business that won’t cost you much to start…, that can generate for you healthy streams of income and is easy to scale up.
One of such business is egg supply or distribution business. But you may ask what this egg supply business is?
Egg Distribution business defined?
This is a business where a person buys eggs in large quantity from a farm and sell in wholesale or retail to others who either resell these eggs in their raw form, cooked form or consume them directly.
This business is one of the quickest businesses to start if you are unemployed. It is also a good side business to start if you are employed however you will have to find a partner to help with the running around that the business will require.
Note I said its one of the quickest business to start but not the easiest because going into business is not easy and as the founder of IrokoTv Jason Nkjoku puts it, “ …To attain new wealth. Only a warlord type mentality will suffice.”
So the question here is how to start and how much is required to start this business?
Before I go in to the detail, I will like to prepare you mentally with some vital information that I believe will enable you to succeed.
This business is a cash flow business that will require you to have a little selling skill because you have to go out there and sell your service to those that would require the eggs you want to sell. And in many cases these people would have had their own suppliers who could be farmers or vendors like you. Therefore you have to go out there and do some marketing which will help you to find out who need the egg supply service you want to offer and cajole them to do business with you.
So how do you go about starting this business?
To answer this question I would like to tell you first how not to start this business.
You see many people who happen to hear that there is healthy amount of money to be made from egg distribution business rush into it without paying due diligence and after a little challenge, they begin to complain and simply rush out of the business almost as quick as they had rushed in.
Egg supply business is simple because all you have to do is look for a farm to get the eggs from and resell to a person or business that requires eggs in their day to day activities. That is the easy part but the effort you will have to put in looking and hopefully converting the people or businesses into your customers is the difficult part and it’s even more difficult if you have never marketed and sold before.
I am not trying to scare your wits out of the business even before you begin. I just want to prepare your mind for all that is required to go into the business so that you succeed. (Are you with me?)
I am sure you too might have given a little chuckle at this person lamentation…
Now let’s do an in-depth analysis on the above:
If you read the above statement of this person who decided to go into the egg supply business and if you have done a good job in analyzing the statement, you would see that there is a healthy sum of money to be made in the business if done right. As the person said he earned 2,500 Naira in one day from supplying eggs although most of it went back into refueling his car leaving him with just 1,000 Naira.
He also started the business with just 30,000 Naira which means if he had continued with the business and continue to work on finding more customers, he would have been able to make back the money he used in starting the business with some profits on it. Also his customers would have reordered for more eggs before the end of one month; they might have also referred other customers for him if he had stayed on and earned the right to ask for a referral, which would have increased his sales without spending more energy or fuel on marketing and selling activities.
So what did this person do wrong?
- He had a wrong mentality towards the business
- He failed to start marketing his new business before investing
- He gave up too quickly
- He depended on this new business to live
- He went far out of his locality to sell his product
- He probably used the wrong vehicle
Recipes for succeeding in this business:
Start with the right mentality towards this business
Many people believe that egg distribution business is a get rich quick scheme but it’s not. Yes it can generate you a healthy sum of income but it’s definitely not a get rich quick kind of business. And just like any other business, it requires a bit of marketing and selling skills to succeed in it. So my advice for you here is, don’t start this business with the mentality that you are going to get rich quick in it. You could…., eventually; but not flash quick!
Start with marketing the business before investing
If you analyzed the statement above carefully you should not be wrong to assume that this person did not do any marketing before venturing into the business. He probably read somewhere (maybe on Facebook) or heard about someone else who was doing well in the business, got all pumped up and decided to start the business as well.
There is nothing wrong with that; although what was wrong was how he went about starting the business. He started with selling rather than marketing.
Every successful business follows the principle of marketing before selling because that’s how you get to know your customers, what they want, how they want the service or product you want to offer and if they are a right market fit for your business.
If this person had gone to make arrangements with poultry farmers who rear layers and discussed his plans with the farms and also the prices he could be getting the eggs of various sizes and how often he would be needing the eggs from the farm and then once the egg part is sorted out, he then goes out to do some marketing to find out who might be needing his proposed egg supply service he would not have to spent so much on fuel in his first day out. And his marketing activities would have allowed him to make informed decisions whether to start the business or not.
But what the person seemed to have done was buy the eggs first, got into his car and begin to drive around looking for customers to sell to. What a total waste of time, money and energy, yet he generated a revenue of 2,500 Naira. Imagine if he had done it right.
I heard this statement form a movie whose title I can’t remember that “it was better to measure ten times and cut once than to measure once and cut ten times”
Don’t give up too quickly
In the beginning phase of any business things are going to be slow, you might end up spending more than you planned to and eventually, you might get discouraged with the result you are seeing just like our friend above.
But here is my advice for you, don’t give up too quickly. Do a quick analysis on what you are doing currently and ask yourself if there is a better way to do what you are doing.
In regards to the egg supply business, probably you had met with a few prospects and they all seem to have suppliers or they are not responding to you the way you had hoped they would. Don’t get discourage just move on to the next prospect and believe that if you are able to get one person to do business with you, then you can get 10 persons to do business with. Remember our friend didn’t do any marketing and still he could sell enough to make 2,500 Naira in one day just moving about.
One more thing before you give up, I suggest you give it a 90days challenge (that is, you are going to keep trying for 90days before you give up) and if 90days is too long, please give it a 30days challenge. Don’t give up in 3days or 3weeks that’s not enough staying power for an entrepreneur.
Don’t depend on this business to live
I would suggest you start this business as a supplement to your existing business or employment so that you are not dependent on it to live. If you are able to do this you would be giving the business the opportunity to grow and eventually support you and any other business you may plan to add to your list of ventures.
If you are in full time employment that doesn’t offer you the luxury of time to build your business, then you will need to get a partner to work with you and take care of the marketing and sales of the new business.
When Alhaji Aliko Dangote was building his Dangote Cement company the monies made from selling flour, salt and other food products were invested into building his cement manufacturing business for a while until the cement factory became self sustainable and now is the major source of revenue for the conglomerate.
So think of your current source of income as your flour and salt business which is generating for you the money to invest in your cement factory (egg supply business) until it becomes self sustainable.
Don’t go too far to sell your eggs
When you begin the marketing for your egg supply business, ensure that you find and supply customers within your locality as this will help reduce your cost in transporting the eggs from the farm to your customers. If you can get just 2 customers that will buy from you regularly, that is enough to get your business started even as you work on increasing your supply and the number of customers that you can supply.
Get a Vehicle
This is a very important tool for this business to succeed over the long term. If you do have a vehicle that you can use then you are in luck otherwise you will have to make do with an arranged means of transporting the eggs from the farm to your customers and then spread the cost on each crate you want to supply. If this is not done right it will cut into the profit you should have made in total.
Also if you are getting a vehicle to start this business ensure you get a vehicle that is fuel efficient otherwise that would be a wrong vehicle for your business.
Now that we have dealt with the recipe for succeeding in this business, let’s talk about the business itself and what you need to put in place to get started.
As seen from the story above, there are people who started this business and quit in less than a week. So the question on your mind right now could be if it is really possible to make money in this business?
The answer is yes and I am saying this base on the primary and secondary research I did and also based on the interview that I had with two individuals that are into the business.
The first person I interviewed is a close friend of mine who’s based in Ajah, in Lagos state and he told me “Kelly all you need is 3 customers which were all he had as at the time of the interview”
He had 3 customers who were purchasing a minimum of 50 crates each from him which amounted to a minimum of 150 crates that they bought from him per week. Every month he says he sells a maximum of 800 crates of eggs to these 3 customers.
Now let’s do the maths:
Let’s assume that he buys a crate of egg from the farm at 800 Naira and then he adds 20 Naira as the transport cost and 100 naira as his profit, therefore he sells one crate for 920Naira.
800 (crates of eggs) * ₦920 = ₦736,000
800 (crates of eggs) * ₦100 = ₦80,000
And lets assume that decides to sell in retail, he could make a profit of ₦300 per crate. Therefore the above calculation becomes:
800 (crates of eggs) * ₦300 = ₦240,000
The other person I interviewed has a shop in one of the open markets in Sango Ota, Ogun state. I met with him and interviewed him about this business and here is how he goes about this business. He has an arrangement with farms to supply him egg directly to his shop in the open market; he already has a few customers that comes to buy crate of eggs from him daily. All he did was markup the price of the crate with ₦20. And he says on some weeks he sells up to 2,000 crates.
Now let’s do the maths
2,000 (crates of eggs) * ₦20 = ₦20,000
₦20,000 * 4(weeks) = ₦80,000
Note: These two individuals are inolved in other forms of employment so they are not depending on this business as their ultimate source of income.
Now that we have done the math’s of the business let’s talk about who your target market should be:
Your target market should be people who use eggs in their day to day activities or individuals who may want to buy crates of eggs for their kids lunch in school.
Below are lists of your target market:
Noodles and tea shops popularly called Meshai
Shops that make and sell egg roll
Schools with boarding facilities
Companies with cafeteria
Small bakery outlets.
Tools you will need/Minimum amount needed to kick start this business
To start this business, in my opinion, you will need at least 100,000 which will cover the following:
- The cost of buying crates which may be paper crates or plastic crates, however i would recommend paper crates as a startup for two reasons:
- Paper crates are cheaper. You should be able to get 100 pieces between ₦4,000 and ₦5,000
- The eggs don’t break easily on paper crates when transporting them from the farms compared to plastic however the crate itself is not durable.
2. The initial cost of buying the eggs and transporting the egg to your customers if for example you are starting with 100 crates this will amount to :
Crates which may be paper crates or plastic crates, however i would recommend paper crates as a startup for two reasons:
100 (crates of eggs) * ₦820 = ₦82,000
And you will still have about ₦13,000 left. However if you will be purchasing a vehicle as a part of the startup cost, the cost may increase to as much as ₦800, 00.
Before you start feeling like it is going to cost more than you expected to start this business, just note that the startup cost depends on what you can afford.
Thank you for reading the article. If you do have any suggestions, request or query, kindly drop your comment below.