The fertilizer industry is getting more and more organized in India. Any individual can initiate a fertilizer distribution business on a small, medium, and large-scale basis. Small distributors generally operate within the district. Large distributors play within the state, sometimes in more than one state.
The world uses more than 85 million tons of fertilizer a year just on cereal crops such as corn, paddy, and wheat.
5 Steps to Start a Fertilizer Distribution Business
Mentioned below are the steps you need to consider while starting a fertilizer distribution business:
1. Fertilizer Distribution Business Market
Fertilizer distribution is a steady business that shows no signs of fading. The growth is mainly driven by the increase in the global population and thereby an increase in 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
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.
2. License & Registration
As a start-up company first, decide whether you want to run a sole proprietorship, one-person company, partnership, an LLP, or a Pvt Ltd company. Apply for a license from the states or local authorities in which you plan to do business. West Bengal state, for example, requires a marketing license to do business in the entire state from the Directorate of agriculture govt. of West Bengal.
Otherwise, you can also obtain a marketing license from the local authority to do business in a particular block or subdivision.
To get a marketing license you should have a trade license from the local body of your store and go down. Apply for a “certificate of source” (as per f.c.o) means a certificate given by the manufacturer, importer, pool handling agencies, or as the case may be, wholesale dealer indicating therein the source from which fertilizer for the purpose of the sale is obtained.
Follow the norms of the Fertilizer Control Board. To get a marketing license you should have a trade license from the local body of your store and go down.
Apply for a “certificate of source” (as per f.c.o) means a certificate given by the manufacturer, importer, pool handling agencies, or as the case may be, wholesale dealer indicating therein the source from which fertilizer for the purpose of the sale is obtained.
You will need to apply to obtain a certificate of registration under this Order for selling Fertilizers, whether in wholesale or retail or both to the registering authority or, as the case may be, for industrial use through registered post to the controller in Form A, in duplicate, together with the fee prescribed under clause 36 and a certificate of source, “in Form O.
Related: Small Business Registration In India
3. Business Plan
Write a business plan for your fertilizer distribution business. A well-written plan will help you to convince investors that your company is worth putting money into.
It will also help you to make a specific plan. 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?
4. Fertilizer Distribution Business Operation
Find suppliers willing to do business at a suitable price in your area. Obtain quality products at a reasonable price from a reliable source. Additionally, you can go for import also in the case of bulk purchases. The source you choose will depend on your start-up budget.
Store fertilizers separate from any other component in dry conditions. In addition, you must pay attention to keeping 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.
Related: How to Create an Exclusive Distribution Agreement
5. Fertilizer Distribution Business Marketing Ideas
Define your customer base. You can sell fertilizers to farmers, garden stores, nurseries, and Krishi Samiti groups directly from your store. To make your distribution business a profitable venture it requires a strong dealer network. Build an effective sales team for your distribution business.
Additionally, product training plays an important role in this business. The more you grow the product awareness, the more you will achieve more sales volume.
Additionally, sales promotion is an important aspect of this business. 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.
Editorial Staff at NextWhatBusiness is a team of Business Consultants having years of experience in small and medium scale businesses.