The fertilizer distribution business is controlled by the government in most countries throughout the world. The world uses more than 85 million tons of fertilizer a year just on cereal crops such as corn, paddy, and wheat.
Agriculture and agriculture-related activities contribute to about 75% of the income in rural areas. Fertilizer is a steady business that shows no signs of fading. The growth is mainly driven by the increase in the global population which is increasing the food demand. Fertilizers are extensively being used to improve per hectare production of crops that can be used for food and industrial applications.
If you like the idea of making a profit by helping people work with the soil, you might enjoy being a part of the fertilizer industry by starting a fertilizer distribution company. Entrepreneurs can initiate this profitable business with a proper selection of products from any location.
Here are the 7 Steps to Follow to Start a Fertilizer Distribution Company
1. Research and Plan
In starting a fertilizer distribution business do some research prior. Try to find out the major cash crops of your location. What are the problems farmers are facing? What are the specific products that have already an existing market demand? In addition, what products and services they are lacking from the existing fertilizer distributors. This research will help you to craft a business plan more confidently.
2. Legal Compliances
As a startup first decide the business structure of your company. Every country and state provides different company formation options. Accordingly, register your firm. In starting a fertilizer distribution business apply for a license from the states or local authority in which you plan to do business.
3. Create a Business Plan
Take some time off and write your own business plan for your fertilizer distribution company. Many beginners tend to avoid this step but if you want to really make a successful venture, creating a business plan is a must.
A well-written plan will help you to convince investors that your company is worth putting money into. What kind of fertilizer do you want to choose for your distribution business such as chemical or organic fertilizer or both? What will be the geographic region you want to cover? How are you going to compete with established distributors? What will be your promotional strategy?
There are plenty of free business plan templates you can take help from on the internet.
4. Naming Your Company
Choose a proper name for your fertilizer distribution business. The name should not be too close-ended as its relevancy of the name may find it difficult if you add product ranges in the future.
5. Get Proper Licenses & Permits
To start and run a fertilizer distribution company, you will need to procure some license from the local authorities. As it varies from state to state and country to country, it is advised to consult a local competent lawyer or professional and get it done.
6. Operations of Fertilizer Distribution Business
Find suppliers willing to do business at a suitable price in your area. Obtain quality products at a reasonable price from a reliable source. You can go for import also in the case of bulk purchase. In the fertilizer distribution business, the source you choose will depend on your start-up budget.
Store fertilizers separate from any other component in dry conditions. Extra care needs to be given to keep the floor damp proof. Provide pallets to keep the drums or bags off the floor.
How you distribute your products and deliver your services can affect your cost and your client satisfaction. Arrange appropriate transport facilities. Choosing the correct mode of transport means striking a balance between time and budgetary constraints.
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7. Promotion of Fertilizer Distribution Business
Define your customer base. You can sell fertilizers to farmers, garden stores, nurseries, and Krishi Samiti groups directly from your store. Concentrate on field trials for the products. Focus on organizing farmer’s meeting frequently. Farmers’ confidence and trust in your products are the main criteria for getting success in the fertilizer distribution business.
To make your fertilizer distribution business a profitable venture it requires a strong dealer network. Contact the dealers and retailers in your area and let them know how you will give them a better product at a better price and better schemes than their current distributors.
You can initiate this fertilizer distribution business with low start-up capital. The minimum period needed to achieve break-even in this business is 5 months and the expected gross profit is 30-35 percent.
About the Author: 99businessideas.com led by Rupak Chakrabarty is committed to helping beginners, entrepreneurs, and small business owners in starting, managing, and growing their business. Our aim is to educate the entrepreneur on the various stages of entrepreneurship.