Starting a distribution business requires you to have three important things at hand;
the capital, the right product to sell and a comprehensive knowledge of diaper business dynamics.
This write gives you more information on step by step guide on how to start diaper business. Diaper business in Nigeria is fast evolving as many companies are making their ways into the countries daily.
There are different ways an FMCG (Fast Moving Consumer Goods) companies
design their route to market. This is a strategy that is planned by the management on
how to make their brands to get to the hands of the final consumers. These different
patterns are explained in this book.
We have many brands of baby diapers in Nigeria today and some other brands are
equally trying making way into the country through importation. So many
multinational and indigenous companies are competing for share of the Nigerian
market- from Turkish multinational, Chinese brands, and American Brands.
It now depends on you on how you want to play or the position you want to have in
the value chain. Whether as a:
You need to understand how the market works and various opportunities available
in diaper business.
Over seven million babies are born to Nigerian household annual according to data available. That means every newborn needs a diaper for as long of the first two years of his or her birth. This figure positions the Nigerian market as a prime market for diapers and various business opportunities. Baby diapers in Nigeria today is not a luxury any more. It is daily necessity.
Ever-busy moms can’t joke with use of diapers for their babies. Several diapers have come to limelight in different time and no longer in the market. Currently the major dominant brands are Molfix, Huggies, Kiss Kids, Dr Brown Virony, Pampers, Baby Cici, Baby Mate. These brands are majorly produced in Nigeria with high quality other imported types are Angels Baby, Baby Hug, Huggies, Pampers Premium etc.
Related Article: 7 Mistakes to Avoid in Diaper Business
Nigeria Diaper Market Overview
There are various opportunities to become a distributor, wholesaler, or retailer for these companies in your area. But some baby diaper brands don’t have a broader distribution in the country. Pampers, a disposable diaper brand in Nigeria was introduced by Procter and Gamble in 2000 and controlled nearly 90% of the market share for about 15 years. Pampers was so well known that it became the generic name for the category. Kimberly Clark, introduced Huggies to the Nigerian market competing for market share with Pampers.
Despite this, Pampers retained its position as the market leader in Nigeria. In 2015, Molfix entered the market and has since disrupted the market, toppling Pampers from the market leader position in Nigeria. They came into the diaper market to fill a gap – affordable, quality, functional diapers that are readily available in the market. The company, Hayat Kimya Limited has multiple distribution channels – The company has at least 2 major distributors in each state. Except Lagos with over 25 Distributors.
Categories of Customers
Companies differ in their route to market design (RTM). Most companies follow this pattern of distribution. Distribution simply means how goods move from the manufacturer to the retailers till it gets to final consumers.
Manufacturer to Distributors to Sud Distributor to Wholesalers to Retailers
So, the distributors buy from the companies. Sub-distributor makes his purchases
from the distributor. While the wholesalers sell to retailers from the bulk purchase
he made from sub-distributor.
The question is what differentiates each one from the other. The simple answer is
FINANCE. Most diaper companies sell to distributors with 9% profit margin.
Distributors buy in millions and they are given monthly to quarterly targets. A full
truck of 40 feet as of today is about 12 million naira. Please noted prices change due
to exchange rate.
This is the breakdown from most companies’ margin. Distributors – 9% Sub-distributor – 6% Wholesalers – 3% Retailers – Base Price Here is a simple calculation of how the distributor-retailers margin works Distributor buys a case for N4,500 from Company A and sells it with 3% mark-up to sub-distributor. Then the sub-distributor buying price will be N4,770.
Here is the breakdown: Distributor buys N4,500 Sub-Distributor buys N4,635 Wholesaler buys N4,770 Retailer buys N4,905 There maybe opportunities to become a distributor or retailer in your city, but you need to find out which brand is lacking, and which one is in high demand. If you don’t do your home work well, you won’t know what opportunities are out there where you live. And most mothers don’t care much about brand diapers anymore.
They would buy any brand as long as its good enough and comes at an affordable price. Such place where you can easily get more information on demand for a particular diaper is a major open in your locality. Another area you can find useful information is Facebook group on diapers. Just type diaper group in Nigeria into your Facebook search and Nairaland
Now if you want to start selling diapers, either as a distributor or retailer, it’s straight and simple. You will only need some capital and a shop/warehouse sited around the commercial and visible part of the city because shoppers buy what they see. Most often consumers are impulse buyers. They buy what they never planned for that’s why visibility, accessibility, and availability are important if you want to make tangible sales.
But most often I always tell my students who are starting diaper business
You MUST ONLY buy products that are PROVEN to sell.
One way to do this is by using what I call the ‘Diaper Product Litmus Test’ – The way the litmus test works is – you buy little quantity like 3 to 4 bags.
If a lot of people show interest in buying it, that is when you can actually try to sell it in large quantity. In this case, you used the litmus test to try out if the market will be accepted in your area.
Fast Selling Diapers in Nigeria
When you are going into the diaper business, you need to know the best ones to invest your money. It is very important you know what diaper brand is in high demand around your market. Don’t work with assumptions or the brand you personally like the most.
The Nigerian diaper market is full of surprises. There have been upsets and challenges associated with top brands gaining market shares in different state markets. There was a time Pampers baby diapers reigned supreme.
You have to do some market research to find the top selling diapers in your market.
Before now, all diapers in Nigeria were known as Pampers, until a new crop of mothers discovered the difference. So, diapers in Nigeria has two names, and one of them is Pampers.
It’s like what OMO is to detergents. And the same happens with Coke. Every soft drink is Coke in Nigeria. But it’s changing. If mothers could change from Pampers back to diapers, every other branded name would soon gain back their names in the market.
These are the competing brands in the markets starting from the market leader. They are the hottest in the market.
Before you go ahead to buy various diapers make sure to get the right moving pack sizes.
These are the common pack sizes:
Economic or Twin Pack
Various Pack Sizes you can find in Nigerian Market.
|Small Pack||Eco Pack||Jumbo|
Diaper Companies in Nigeria
|Hayat Kimya Nigeria Limited||Molfix Baby Diapers|
|Hayat Kimya Nigeria Limited||Bebem|
|Voyage International||Kiss Kids Baby Diapers|
|Wemmy Industries Limited||Dr. Brown Baby Diapers|
|Cedar and Cradle Limited||Baby Cici Diapers|
|Kimberly Clark||Huggies Baby Diapers|
|Virony Nigeria Limited||Virony Baby Smart Diapers|
|Ngobros & Company Nigeria Ltd||Baby Mate|
|Fouani Nigeria Limited||Yara|
|Hygonite Hygiene Ltd||Lebrace|
These companies are the major and the well-know firms producing baby diapers at present time in Nigeria. The Market is generally saturated with so many brands – Turkish brand, Chinese brand and Indian companies also have entrant into Nigerian market.
The competitive edge that these local companies above have is that they are always available because they not affected by trade policy on importation and restriction and delay in at the various ports. Besides they don’t pay tariff on finished goods.
Please note that these are just the present prices of the products at the time of compilation of this e-book. Contact the company for updated prices.
Understand this, there is no particular way to start selling diapers. Here are some ideas you can follow
Get a Shop
You will definitely need a shop. So, start by choosing one in the busiest part of the city. Where you locate the shop is more important than the size of the shop. But if you have the opportunity, try renting a bigger shop.
Look for Right Suppliers
You can get or look for companies interested in Selling their diapers in your city. Some marketers may supply and you pay as you sell. If you find a distributor around you, make your business interest known to them and try working out business relationship with them. The above contacts are some authorized vendors. Do reach out to them.
One of the ways to open your shop for business is to brand it properly. As a small business, you may not have the funds to do proper promotion for your diaper shop, but you should brand it with diaper images to attract passers-by.
Scale Up Your Business
If the first shop meets your set objectives, open up another shop, in another target location in your city. Strategical expand your business to reach more customers. Note that the best way to push for more diaper sales is to bundle other baby care products – like a one-stop-baby shop.
Business expansion comes with more capital requirement, if you don’t have more disposable cash to fund the business you can approach banks for finance. Currently, Ecobank and Access Banks have financial products for women and people who deal with baby products, feminine products. Please do consult a financial expert for advice on this.
Besides all these try and to know your customers. By knowing your customers, you build bond with them. This bond would make them come back to buy from you over and over again. People most times buy from those they know. If your customers know you, they will always come back to buy from you.
Starting a diaper business could be the best decision for you. Even if one particular brand is not selling today, other diaper brands will sell. So, there will always be sales in the diaper business.
Some retailers now sell single units of diapers to customers who can’t afford to buy a full pack. It makes it easier for those with limited funds to buy what they use for their babies. And if you want to start selling baby diapers, it’s as simple as ABC. Diaper brands are looking for retailers like you. It’s never too late to get started.
Companies always look for potential distributors in various states and various capacities for their business expansion.
You may reach out to the following companies for distributorship
Hayat Kimya Limited – +2348099910970 or Customercare@hayat.ng
Wemy Industries Limited – +2348023225949 or firstname.lastname@example.org
Financial requirement for each company defers, but most often you will need the following to be able to secure distributorship:
A Standard Warehouse
Sales Team and back-end Staff
For consultation on how to start a distribution business please call +2348030756813