One business you must start cheaply this year is road-side gas shop. This business is becoming more useful every day. Yet not so many are going into it. The demand for cooking gas is increasing daily.
More families are opting for cooking gas for easy cooking as well as cost saving. One 12.5KG gas bottle can last up to 60 days depending on your cooking consumption.
Already, there is an increasing demand for gas products like regulators, cylinder, burners, hose, etc. and an average gas shop can generate up to N500,000 in monthly income. Most families can live very large on such income.
If you are interested in setting up your own cooking gas shop, I have written this article just to guide you on the best way to go about it successfully even if you don’t know anything about gas business before now.
Ok, I will advise you to save this article, you will be coming back for guidance on gas shop setup. Once you finish reading call so that we can help you achieve this plan as soon as possible.
Road-Side Gas Shop
Starting a gas shop is very easy and less capital intensive. There is no specific budget, to begin with. You can actually decide your own budget with the help of this article.
I will be detailing for you everything you will need to set up a cooking gas shop, and where necessary I will give you cost estimate.
However, these costs are only estimated. You must verify them as at the time you are starting your own shop. Also, operating the shop does not require any training or qualification but might require government certification.
You can actually start one today if you choose to. It’s one business you can set up even if you a civil servant.
Your job will be to order your stock while you hire a sales girl to run the business. From your office, you can monitor inventory and replenish when you need more stock.
If you are buying from Rhino, all you need do is to collect current price list, decide the products and quantity to order and contact Rhino to give you total cost plus shipping. Then you pay into their bank account, and within 3 days your products are delivered to you.
Road-Side Gas shop Testimonial:
Here is a testimonial of a beginner gas shop operator:
I’m a cooking gas dealer. I started with a little money after my NYSC, to be frank, I’m not regretting going into d business.
Pls, how can I get your products?
I based in Owerri.”
Prince Josh Okereke
Taking The Necessary Steps
The necessary things you need are your shop, which you would rent. You decide the shop size based on your capital. And once you have your shop, you can start sourcing your products and start selling immediately to customers. A gas shop requires little or no marketing to increase sales, an excerpt where there is competition.
But that is currently not the case with the gas shop. There are no competitions. If you look around you, maybe you will notice that if there are any gas shop close to you, it’s probably the only one. It’s only in very few cases that you can find more than one gas shop in a location.
And due to the weight of gas cylinders, gas shops should be very close to the consumers. That is why you need to set up one. Let me start by explaining how to set up your gas shop under subheadings.
Picking Your Road-Side Gas Shop Location
The most important part of this business is your shop location. Your shop location is like your 60 per cent chance of being successful.
If you are in an excellent spot, you will have no problem selling your gas products even in a competitive market. I strongly recommend that you spend most of your capital on getting an excellent location in your city.
There are several factors to consider when choosing your gas shop location. Number one is being close to a large number of gas consumers. You can quickly identify this location in your city.
Although, I recommend you do a simple feasibility study of the area you choose to set up your shop. It will help you find out how many households are in that location, you can use streets and numbering to ascertain the records.
Take into account their closeness to your proposed shop location. There are different types of area, like residential, commercial, student and industrial sites.
You must identify which one applies to your situation before setup.
Choosing Your Products
Deciding gas products to sell as a beginner may be challenging. To avoid tying down your little capital, it’s essential your stock at the beginning only fast selling products. However, this might change from time to time.
For instance, cylinders are hot selling products now but not all cylinder sizes. Also, the different market may have cylinder sizes that sell more than others.
It’s usually advisable to stock cylinders sizes in small quantities until you identify what’s selling more in your market. But it’s ok to have all the sizes in stock to avoid missing sales.
Just stock each size in equal quantity to your sales figures. I strongly recommend 5 units of significant size and 10 units of each small sizes.
Here is the List of popular Gas Products:
- Cylinders 12.5kg, 10kg, 6kg, 5kg, 3kg
- Normal Gas regulator (metered and non metered)
- Camping regulator
- Cast burner
- Iron burner
- Long burner
I will limit the products to just these ones here. I have my good reasons for that. They are in high demand now. They are the products you should start with now. We didn’t publish their prices here for a good reason.
The prices changes in the market, so you don’t make plans with an outdated price list.
You can also request for the pictures to identify each item by their looks. Also, note that the cost of transporting the product to your city. It’s also cost-effective using shipping method as against coming to Lagos yourself to buy. Transportation cost now is very high.
A return trip can cost over N20,000, and you don’t want to add that extra cost to your price. We recommend you buy from Rhino Industrial & Trading Company Limited. They are a trusted company.
You can order gas products from them, and you will be sure they will not run away with your money. They ship gas products to anywhere in Nigeria. Please know that they don’t accept payment on delivery.
Gas products are paid upfront before shipping, and you will pay shipping cost too, but it’s much cheaper than coming yourself.
Cooking Gas Cylinder Refill
You can also add gas refilling in your shop. This is also a lucrative opportunity on a significant scale. I have also treated this business in another article.
However, I’m talking about the small-scale gas refilling business. Where you just buy in a much larger bottle of 100kg and resell in your shop.
Gas price is not so stable, it fluctuates with supply and demand. But the gas refill business is very lucrative. You can add it to your gas shop service.
You can start with one. I recommend you make an enquiry from the closest gas plant to you. Also, this might not work for you if the gas plant around you is closer to your customer base. You will need a big gas bottle.
Hot Selling Cooking Gas Products
Let me give you an idea of hot selling gas products and why. The kind of gas products that would sell in your location will depend on some critical factors.
If you are in a big city, the gas products you sell may vary from high end to low-end gas products. You might need a feasibility report to tell which market your location falls into.
I always advise that you do a little feasibility study. It can cost a little to hiring a consultant. But I know gas consultants are not cheap because they may not be found in your location. That increase the cost, with travel cost, hotel and feeding, plus their fee, may discourage you from hiring one. But always get the right information to help you invest.
However, pure knowledge about hot selling gas products is to look at what other gas shops are stocking more. If you noticed, gas cylinders are hot cakes now. The next hot products are gas regulators and burners. The burners work with smaller gas cylinders.
Although, there is also a regulator that can work with small bottles, like the 5kg and 6kg cylinders – which is good if you want to cook in multiple gas burners at the same time. The lower prices of a gas burner over gas cookers makes them hot selling products among low-income earners.
Requirement For A Road-Side Gas Shop
I’m going to make it as easy as possible.
I’m looking at the cheapest gas shop startup requirement even though a good gas shop should invest as much money as you can get. It’s more attractive to consumers to like to shop in a big gas shop.
However, it’s one step at a time – so there is nothing wrong with starting small and growing it big. So, I’m going to lay out for the beginners capital outlay for a neighborhood gas shop.
I will assume that you already have a shop. I don’t want to go into the dynamics of shop rents since we are all starting from different locations. So, I will leave you to resolve the shop cost on your own.
But the most essential cost after the shop rent is the products itself. I recommend a minimal startup for beginners, like N200,000 to N300,000. I’m considering other logistics as well.
One can also start with N100,000. I can also help analyze your startup cost personally if you have limited funds. And help structure your product sourcing and cost them for you to fall within your startup budget.
I have set up a shop including rent below N300,000. It was a low-cost shop with small space and minimum products. The most important thing is the turnover.
If you have high turnover, then you may have to invest more in stocking products to be able to meet up with demands. You know there will always be a gap between when you order new stock and when it finally arrived from your suppliers.
One of the significant challenges of starting a new business as a beginner is lack of experience in that industry. Sometimes you wish you have someone who can hold you by the hand through the process until you are established.
When there is no one to help you that way you may end up giving up on the project. But as your gas business consultant, I have made myself available to you.
Here is how to package simple gas shop business plan to help you start.
Pick your products based on sales potential for your location and sourcing. I would offer you this also for free if I did a feasibility report for you or not. However, I will be more specific if did feasibility report for you. That’s the only way I can be so particular about the authenticity of this report because I would have identified it during my feasibility study.
Capital investment planning
We will decide your initial capital investment and why. I will help you plan how to invest your funds to ensure you don’t tie down capital on non-sellable products or slow-selling product. And guide you on the fast product to stock in your gas shop. I will also offer you this for free.
Shop location guide:
I will guide you in deciding how best to locate your shop. The right location in your city and your possible revenue potential for that location. Also, I can only do this for free if I did your feasibility report. It’s from the description I can know the details and be accurate. But I can also do it even if I didn’t do feasibility report for you if I can get beneficial information from you.
Product retail price guide
This is very important and would determine how smoothly your business takes off profitably. We would arrive here by looking at your product sources, landing cost to your shop, competitive prices in your market and target customers in your chosen location.
And many others I will do based on your specific needs and situation. Just note that I don’t charge for these services. It’s free. It’s only if I have to travel that I can demand you pay for the trip, but my services for opening a gas shop is free.
How to Price Your Gas Products
If you want to be profitable in this business, you should price your products well. I know some people have the idea that to be successful you sell cheaper than your competitors.
That’s where there are competitors and where you also have some level of monopoly on your own products or brands. That is not available for the gas shop.
So, I will advise you to resist trying to sell cheaper because that will only resort to losses for your gas shop. If you have observed, the prices of gas products from importers are the same.
And since you are not getting a cheaper deal why are thinking you can sell cheaper. The best way to price your products will be to visit an existing gas shop and inquire about their prices.
Act like a buyer.
If you act like a seller, they might give you a wrong impression.
And there is no one price fits all kind of thing. The rates in Abuja may be different from prices in Kaduna. The same applies to every city.
That’s why it’s wise to just find out from those already selling in your town and compare that with your cost.
Also, note that gas products prices are going up now due to high production cost in China. If the shop you asked has old stock, they may not give you the right price idea.
And the customer is not going to buy more product because your price is low.
Profitability Of A Gas Shop
Finally, let’s look at the profitability of a cooking gas shop.
Although, there are worst case scenarios as well. But I will give all the situations so that whichever one your shop fall into you can see what you could be getting.
Also, note that profitability may also be affected by your shop location. The bigger your city, the more chances for profit.
However, every area will have its own advantage for your business. An average gas shop can generate up to N500,000 monthly. That’s cool half a million Nara.
For a whole year, you might be looking at up to N6 million. Some locations can be more or less depending on several factors, but one thing about gas shop business is that it’s very lucrative now.
The most important factor that would impact significantly on your profitability is your location. Once you are located in a right spot, you can only imagine how successful your gas shop can be.
Well, the worst case could just be you are situated wrongly and barely get customers buying your products. And that could lead to closing up your shop.
Thank you for reading through. We hope the information is helpful. We can assure you that we compiled this in good faith and we believed that it will help you start your gas shop immediately if you are really serious.