WHAT TO KNOW ABOUT THE NIGERIAN DISTRIBUTION BUSINESS
WHAT TO KNOW ABOUT THE NIGERIAN DISTRIBUTION BUSINESS. Do you want to know how you can distribute your product in Nigeria? There’s a simple way to get product distributors anywhere in Nigeria. It’s the secret successful brands have used to dominate the market and spread across the country. And you too can use the same method to grow your business.
If you are an importer, brand owner or a manufacturer, you can start distributing your products to increase sales across Nigeria. There may be demand for your product in places you have never known or heard across the country.
Sometimes, you may not even have the resources to get your products there. Or the brand advantage to spend heavily on advertising. But you can distribute your product to every part of Nigeria without stress.
Although, the challenge is usually how to get started. Some companies have tried online advertising to get distributors, but that doesn’t always yield the best results. You get interested individuals who may not have the experience or financial requirement to start distributing your product.
What you need is distributors who have both experience and the financial ability to represent your product in their local market. This kind of partnership would help grow your product in the relevant markets.
When You Begin Distributing Your Product
Your first question is this. Who are my target customers? This is key because your target customers would help you understand what kind of outlets you should be interested in.
High end or Premium products may not require distributors, and so you don’t have to use this method. But low end products means that your customers are at the lower end of the demand curve. They are the common people who probably have primary access only to local markets as well.
And Nigeria has many of these markets all over the country. If you have the statistics of these markets you will agree with me that until you start distributing your product in these markets you cannot grow your business in Nigeria.
This goes for foreign brands as well. Any product that’s not available in the markets doesn’t have access to the right consumers, unless it’s a high end product.
A Market Study
A recent study on the Ariaria market in Aba, Abia state shows that because a market is not in Lagos (the commercial nerve center), investors or potential distributors should overlook it. This market has 37,000 shops and over 1 million traders.
With the statistics cited above, it still doesn’t make “Ariaria market” the largest market in the eastern part of Nigeria. The Onitsha main market is at least 25% larger than it with international recognition. Lagos on the other hand has several large markets like Balogun market, Alaba international market, Trade fair market, Ladipo spare parts market, and others. These markets are by no means small. The perfect distributors haven. We aren”t just citing market statistics for clout but instead trying to demonstrate their vast reach owing to the numbers who throng there daily to patronize the merchants.
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Understanding the Psychology of Product Distribution in Nigeria
It’s not enough to identify all these markets for distributing your product in Nigeria, you should also know how best to penetrate them. As earlier mentioned, each of these markets poses an advantage and disadvantage. For distributors opting for just online distributorship, it would be a worthy mention to say that your product would get loads of attention which could end up becoming the reason it goes out like a candle in the wind (if the generated attention does not match up with it’s availability). Invest in partnerships in-country that can not only get you attention but also provide shelf-space for your products in homes.
Imagine having 5,000 people across hundreds of locations in-country selling your product. This would greatly impact your sales revenue in a country with over 200 Million citizens. The beauty of distributing your products across the country is that you are reaching everyone who needs your product, making it easily accessible to them to make the choice to buy from you.
Product Distributorship 101
A product distributor just like a franchisee, buys the Franchise to sell your products in a particular market or city. This arrangement could either be on an exclusive or non-exclusive basis. Although, this arrangement doesn’t always take the form of franchising but it’s noting different from it. Because a product distributor is empowered to represent the interest of your product in that area. He or she buys from you in a large quantity and sells to small retailer who are located everywhere your customers are found.
A distributor buys your products in large quantity, warehouses it at his or her own cost, sell to retailers who can’t afford to buy in large volumes, who in turn retails to consumers as they request for it.
There’s so much benefits for your business distributing your product this way. The only requirement to tap into this form of marketing is to have a product you control in the country, even if you are not the original manufacturer.
Ways to Distribute Your Product
If you seek the benefits of distributing your product in Nigeria, you need to know how best to do it. I’m not expecting you to know everything you have to do right, but there are basic plans you need to put in place.
The “Grand Lick”
There are 37 states in Nigeria, including the FCT, with 774,000 local government area, while communities and villages not countable. You can have your product reaching every state, local government area, communities and villages. Imagine how massive the market would be.
With all these potential comes even bigger stress. Embarking on this by yourself is achievable but not without mistakes and regrets. Worse still, you will part with monies that could be put towards even better use. These are the basic steps to be taken when attempting to distribute your products in Nigeria.
#1: Hire A Marketing Company
The first step here is to hire a product marketing company. I’m going to be very direct on the kind of product marketing company you should hire because there are many companies in the product marketing arena and their strategies differ as well. The company I would recommend is one with experience in market insertion and offline activation. In case you don’t know how market insertion works, let me explain in simple terms.
These kind of product marketers recruit capable distributors and retailers to distribute your product. They can also help plan your marketing program to help push the products faster into the hands of new consumers, retail outlets or other sellers via online and offline techniques. That is the kind of product marketer you need. They help make your product easily accessible to consumers, and recruit for you big distributors who has both the experience and the capacity to represent your product in their market.
#2: Explore Short Trial Periods
This part is very important. If you want serious minded distributors, you have to make the offer exclusive albeit for a short period (between 3 to 6 months). This gives you an opportunity to observe how efficient the distributor is. If from the third month, you cannot see any positive impact, start seeking new partnerships as this is enough time.
#3: Make Your Offer Exclusive
On your product, Nobody would like to invest so much in your product if it’s too competitive. It’s the exclusivity that would encourage them to stake their finance on your product. An exclusive offer makes the distributors feel they are an important partner in your business. It gives them some monopoly in their respective markets. That’s also why they can buy in large quantity because they feel responsible for the product supply in their assigned market.
If your offer doesn’t include this kind of exclusivity, then it’s not enticing enough. You may still get some distributors, but may not be the experienced and capable ones. It takes a huge value proposition to entice serious and capable distributors to join your network of product partners.
One good way to offer exclusive distribution to your partners is to segment your market either according to states or cities. Design your distribution plan in a way the distributors will know how the market is shared among distributors. And stake your integrity to maintain this exclusivity without fail.
#4: Target Experienced Distributors
In distributing your product, don’t just sign up anyone who says they want to start distributing your product. There are distributors I call road side distributors. These are people who has no experience in business but have money to buy products and stock.
The type of distributors you have can either impact positively on your sales growth or frustrate it. The best bet is to go after distributors with track record of achievements in their respective markets. And if they are new or aspiring distributors, ensure they possess the zeal and passion for the business.
These experienced distributors have already gained some relationship with fast growing retailers who they can introduce your product to. They have some experience in the market and knows how to move any product faster to the consumer.
Avoid recruiting inexperienced distributors. That’s why you need to hire a marketing company to do this one for you. Don’t waste your money on advertisements for distributors, rather spend that advert budget on promoting your products to the consumer and directing them to the stores near them.
#5: Set Standard Relationship
You don’t want your distributors to feel like they are on their own. That can discourage them or make them feel less interested in pushing your product. Think of your distributors as your partners. They are your marketing partners that should be brought closer to every plan you are making about your product.
Create an easy communication channel to reach all the distributors in real time concerning distributing your product. Update them on promos, incentives, commission increase or decrease, and other measures aimed at marketing your product.
Also, don’t ignore their complaints and concerns about your product. Use them as feedback channels for your product.
Have an understanding that the more inclusive an environment you create for your distributors, the higher your chance if breaking into the market with them.
Any product that’s not built around a network of distributing partners won’t grow fast in Nigeria. The Nigerian market is still built around local markets, like in the calendar of the Igbo market days of (eke, orie, afor and nkwo). The Igbos go to different markets based on assigned market days to buy and sell.
That same structure is what’s being used today but a bit different from the past. Everyday, millions of Nigerians go to these different markets to buy or sell. And no matter how the markets transform, they will still be the congregating point for buyer’s and sellers.
Finally, use experienced product marketers to grow your distributing partners for your product. It’s not cheap but it’s worth it at long run. However, you can take one market at a time for cost consideration, until you have covered every market in the country.
For more enquiries on distributing your product in Nigeria, Kindly reach out to us via the comment section or send an email to firstname.lastname@example.org. Wishing you all the best with selling in Nigeria, Africas most populous black nation.