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How Diaper Business Works In Nigeria

If you live in Nigeria, you probably know one or two things about diaper business. It’s becoming like bread these days, the way everyone wants to go into diaper business. Everyone, I mean anyone wants to join the diaper business, and no matter what you say, their eyes are just on the heap of money pile there’s to make from it.

Of course, the huge revenue potential of baby diapers would make anyone beg for a share of it. Well, I want to clarify much of what’s going on in Nigeria when it comes to diaper business. It may be different in your country, but if you hope to do diaper business in Nigeria, you might have to follow my lead on this one.

The two main diaper competitors are Molfix and Pampers. Both are leaders in the market in their rights. Molfix is owned by Hayat Kimya Nigeria Limited, while Pampers is owned by Procter and Gamble. However, Molfix leads the diaper business in terms of retail volume, and Pampers is leading in the retail value.

Both leading brands enjoys huge market share of 81.6 percent, leaving just 18.4 percent for the rest of the brands to share. Huggies leads among the remaining brands in the 18.4 Percent market share, that puts the brand in the third leading diaper brand in Nigeria.

The Diaper Distribution Channel

If you are planning on starting your own diaper business, it’s important you understand how others who started the business before you are doing. I have classified the different value chain in the diaper distribution business.

Most diapers in Nigeria come from twos major countries, Turkey and China. In fact, Turkey has positioned itself as a major manufacturer for diaper brands in Nigeria. Any expert you ask about the best country to bring in diaper would recommend Turkey. Yet, China seems cheaper but lacks the trust to maintain quality after the first production.

All the classes of distribution are themselves important in the value chain. Your role as a diaper business owner helps to integrate all these values together for your success. Another thing you would learn from these value chain is where you can possibly start the business from.

I strongly recommend that you take the market one at a time. For example, wanting to cover the whole nigeria with your diaper brand is not a problem, but winning one state at a time could help you focus your marketing efforts to achieve market share in one state at a time. Being the third market leader in Ogun state is better than not leading in any market across Nigeria.

The Diaper Manufacturers

Manufacturing diapers in the country comes with so many advantages, but the most relevant is retail price control and regularly supply of products to markets. The diaper companies that manufactures locally are also leading the market share with over 80 percent of the market.

Although, it’s not the easiest option to manufacture locally due to the infrastructural issues in the country, but it’s the best choice against increasing exchange rates and irregular product supply. If you are regularly found in the market, your customers would keep making alternative choices, and that’s not good for your brand.

The only diaper brands that are manufacturing in Nigeria is Molfix, Pampers and Dr. Brown diapers owned by Wemy Industries. The rest for now are all importing from Europe or China. However, starting a diaper manufacturing plant doesn’t come cheap.

These brands mentioned above all have the financial muscle to support a local manufacturing outfit for their brands. For a startup, it may be a huge undertaking to start manufacturing a product that doesn’t have market acceptability yet. Starting as a manufacturer is not for startup diaper businesses who doesn’t have the right financial backing.

The Diaper Importers

This group of diaper business owners are in different categories. Some are diaper brand owners, who have built a brand for their diaper business but still manufacture them outside the country. Majority of the diaper brands in Nigeria falls within this category of importers. They own the brand but outsource the Manufacturing to factories in Europe or China.

Another group are those who buy large quantities of existing brands from America, UK and Germany to sell in Nigeria. This category of importers usually buy clearance sales at major supermarkets abroad at lower prices. Their main target are customer who used to live abroad that prefers those foreign brands.

The third category are the unbranded Chinese diapers. They mostly come in transparent nylon packs. Some are branded but not registered brands in the country. I have explained more on this Chinese brands below to give you more clarity on the Chinese manufacturers encroachment into the diaper business in Nigeria.

However, diaper importers are faced with serious issues that are hampering their brand market share. They are not able to import regularly or meet up with demand before stock dries out in the market. These delays helps the locally manufactured diapers to gain more market shares. That’s why Molfix and Pampers are the strongest brands because they are constantly available.

Another problem is the dollar exchange rate. It keeps going higher and affecting regular market price for the diapers. There’s no end in sight that the Nigerian import market would ever win in this dollar exchange war. So we expect dollar to keep rising and prices of imported products, including imported diapers to keep rising. This inconsistency in retail price discourages consumers from being loyal to their preferred brand.

Chinese Diaper Business Imports

There’s so much increase in the number of Chinese diaper brands flooding the Nigerian market in the last one year. In the past, most marketers have ignored them, but I think you shouldn’t ignore them anymore. The brands are growing, with over 50 of them counted, and many more still to come into the market without government regulatory approval. Their market share is also increasing by the day, which is one reason they should not be ignored.

Interestingly, most of them are not NAFDAC approved. How they got into the markets is another thing, but they are really taking over, especially in the rural markets. According to some retailers I approached, they make more profit from selling the Chinese diapers, which are also cheaper than the branded ones. Also, they claim the customers are buying them now more than the brand diapers because they are cheaper. One of the retailers begged me if I could help her to import it that she really need to stock it more.

Nigeria has a large number of poorer population, and that’s what this Chinese brands seek to explore. However, there could be some challenges with these Chinese brands, and that may have somethings to do with the informal market being well flooded with diapers, and the fact that they possesses no brand advantage.

These are just calculated disadvantages, since these Chinese brands will have to still fight for market share without a brand to sustain their individual gains. So, anyone can bring in these Chinese diapers and compete with other Chinese importers too. It doesn’t enjoy market exclusivity and it’s also not sustaining.

Moreover, from the market view, these unbranded Chinese diapers are also considered unreliable. A retailer told me how they pick the average reliable ones, by checking if it has rubber on the sides. Generally, the only consideration for these Chinese diapers is their low prices for the consumers and higher profit margin for the retailers.

The Marketers

This category is an important piece in the whole diaper business value chain, but it’s mostly ignored and neglected. The marketers are the gold miners in the diaper business distribution value chain. For any brand to succeed in the diaper market, it must learn to utilize the power of good marketers.

Well, I’m going to give you the exact direction this kind of marketing takes, because my team and I have been involved in some successful diaper brand market insertions that worked very well. Showing that this kind of marketing works in Nigeria. However, finding the right marketer with experience in product insertion is not that simple. It’s not every marketer that does this well.

The real job of this kind of marketers is to build a solid distribution network for your diaper brand, which includes signing up distributors and retailers from each state or city, who has the capacity required to represent and maintain your brand availability in their respective markets.

This kind of marketing doesn’t come cheap but it’s the fastest and the best way to introduce a new diaper brand or even any other brand product into the Nigerian market, to start making sales immediately. Molfix used used sales representatives and gave them commission from sales. That seemed to work for them, but with so much difficulty and problems.

Here is again the benefits of using the marketer to build your diaper distribution network:

  • They help to building strong distributors network
  • Helping to network retailers to the approved distributors
  • Helping to drive products deeper into the local markets

The Diaper Distributors

If you have signed up with an experienced marketer, then the job of finding distributors for your diaper business is made easier. The marketers are not only finding you distributors, they also find you money. The distributors are highly important to your diaper business.

The right distributors are those who understand the business, are passionate about it, and has the money to finance supply, with a chain of retailers to buy diapers off them. If you are trying to get such marketers through media advertising, you may not be lucky. It’s the job of your marketer to find you distributors in any city you want them.

I explained more about distributors in this post: How To Join Diaper Distributors In Nigeria. This will also give you insight on how to Franchise your distribution model as well. One thing to note about distributors is that you can’t do without them if you hope to build a strong diaper business in Nigeria. Even if you are a foreign diaper brand based outside Nigeria, you can tap into this distributors strategy to build your diaper business in Nigeria.

Although, there are limited number of distributors you can accept per state, based on the size of each market or structure of the cities. The best way to implement distributorship is to use the Franchise model of exclusivity. The power of exclusivity is the secret many traders will pour their money into a brand to secure their supply for your products.

The Diaper Retailers

When it comes to retailers it should be done aggressively. The number of retail points would greatly impact your sales figures. However, this should be strategically done to give your brand proper coverage in any given location.

However, this part of the distribution chain cannot be controlled. Many of them are in the business for the wrong reasons, which has little to do with the success of your brand, but you can’t do without them.

Imagine, you can have just one distributor in a location like a state or city, but you can have thousands of retailers without such exclusive restrictions. That’s how important the retails are to your diaper business. Also, the nature of Nigerian markets, which controls the highest percentage of diaper sales, about 70 percent of the total market sales volume, is not a sector to ignore.

The Local Retailer Networks

If your diaper brands don’t have a share of these local retailers you are not yet in the diaper business. They are the closest to your customers. How you handle this line of your distribution network would impact on your brand positively or negatively. There are many ways to handle this market. I would recommend you also read this post on How To Start Profitable Diaper Shop.

This group is also the easiest to deal with, because they don’t have much request than the usual commission per product. Although they won’t openly argue about the commission but they won’t hesitate to jump to another product that’s offering better commission.

Some smart diaper brands uses incentives to drive this segment of their value chain. This group loves incentives. If you could, they can be used to influence new customers to buy your diaper brand. Most customers are not really brand conscious, and can be influenced to move from one brand to another.

An effective use of local retail network can increase your turnover. Imagine how much ten thousand retail points can bring into your diaper business regularly. That’s the power of strong retail network.

Shoprite And Supermarket Retail Outlets

One other important channel of retail for diaper brands is supermarkets, of which Shoprite is leading the market with both national spread and volume. For a new brand, pushing your diapers through retail outlets like the supermarket could give you instant sales volume, and save you huge marketing cost as well.

However, there are things to consider helpful when considering retail outlets as supermarkets. The first one is quality diapers. The supermarkets have brand identity to protect, and they sell their brand promise through the quality of products they allow on their shelves, but you only going to get paid after they have sold your products.

The next thing is stock availability, which is even more critical to supermarkets over quality, because it creates a wrong impression on the minds of their customers. So, you have to have a proven record of product availability to gain the trust of supermarkets, especially Shoprite. In 2017, Shoprite threatened to take off Dr. Brown diapers from their shelf due to product availability issue.

Another key strategy when dealing with supermarket brands is price. These supermarkets love to use price as a selling point. If you can play this price point to your advantage they would like to stock your brand.

Hospitals Retail Partnership

Molfix diapers explores this strategy to its success, even though it was originally Pampers diaper business strategy that has worked so well for them. If these two major diaper brands are doing something it’s surely because it works so well.

According to recent statistics, an estimated 20 percent of total diaper market volume sales are generated through hospital partnerships. That’s a lot of market for any diaper brand to overlook. It’s opportunity to impress a brand upon mothers, and they might continue using it after they leave the hospital.

The huge selling point here is just lower prices. It’s done as promotional marketing, lower than market rates but a better way to sell your diaper brand to mothers using their doctors or nurses influence. It’s a type of influence marketing, and it has worked so well, generating about 20 percent of the total diaper market volume.

One major issue with this option of retail is that you have to risk a large percentage of your diaper stock, as you only get paid when sales are made. You don’t get upfront payment for the stock like with the local retailers.

Conclusion

Diaper business has proven to be a lucrative business. However, it’s not all success stories for all the diaper brands. Some have closed shop after losing market share due to certain challenges. Some others simply came to offload their shipment of diapers and disappeared after just one shipment.

The dominance of Molfix and Pampers with over 80 percent of the market is proof that there’s enough room for new entrants in the diaper market. The problem is that the majority of other diaper brands either don’t have the required financial muscle to fight for market share, or they don’t know or want to do what is required to gain substantial market share.

There are two ways you can use a marketer to build your diaper distribution network. You could either hire them and pay them for their services, which is good but requires huge capital outlay if you want to do it faster. The other option is to sign them up on a commission based service. You can sign them up for the next two years or more depending on the commission type agreed with them.

The major advantage of the hospital retail partnership is the power to win you new customers. Nigerian like recommendations from qualified people. They take their advice seriously, and would do as told. That’s why you should have a hospital partnership for your brand if you hope to build new customers. How you do this is important. It’s one good reason you need to hire an experienced marketer for your diaper business.

 

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Grow Your Business

How to Become A Successful Diaper Distributor

Do you want to become a diaper distributor in your state or city where you live? There is huge potential in diaper business that is making distributors so much money selling diaper exclusively in a state or city.

Yes, I mean it, diaper distributorship is an exclusive franchise. If you are a diaper distributor you get to be the only one or just a few of you to share a more larger market.

Imagine if 100,000 diaper bags of a particular brand is sold in your city monthly and you happen to be the diaper distributor selling it? That statement may seem enticing but it’s the reality for most of the existing distributors, not just for diapers only. Have you wondered who’s the distributor for Indomie noodles in your state?

 

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You don’t have to be the owner or manufacturer of any fast selling products to become a millionaire from the product. All you have to do is become a distributor.

And I can bet you, there are many people looking for such opportunities but haven’t even found it, or don’t have what it takes. I’m going to show you how you can become a diaper distributor if you want one, or any other product as well.

If are considering going into diaper business, I have just all the information on this blog to help you on this journey, like this one too. Here’s another one I recommend you read as well: How Diaper Business Works In Nigeria.This post is a must read if you want to venture into this business. And there are other articles as well.

Understanding Diaper Distribution

One thing about diaper distribution is that is follows a kind of franchise model that gives the distributors some kind of monopoly in the city they are licensed by the diaper brand to represent them.

This kind of diaper distribution model is like network marketing. The distributor gets to have some sub-distributors (up to 2 or 3 of them), where they are allowed, and as many as the number of retailers that are interested.

So, the diaper distributor buys directly from the diaper brand its representing, at a discounted price, and the sub-distributors and retailers buy either directly from the distributor or in the case of the sub-distributor, buying from the diaper brand owner directly.

Whatever form or shape yours might take, works pretty the same way. Although the idea is built on some form of exclusivity.

Who’s A Diaper Distributor

I’m not trying to define a distributor for you. You probably know that already, and no amount of English language can rephrase it better than how you already understand it in the Nigerian context. But what I want to explain to you is what you need to have if you want to become a diaper distributor.

A diaper distributor may not different from distributors of other products, excerpt for the diaper. Your an as well apply this information to becoming a distributor for any product in Nigeria. It works pretty much the same way. If you are ready then let’s get into the details. These are your starter plan to get you started.

The first thing you must consider important as a distributor is a store. I’m only simplifying it with a store, but it should be a big store, if you cannot afford a warehouse. The reason I’m considering a store as first thing instead of money, which in some case should be the primary requirement, is because there are some distributorship opportunities that might consider your location above capital injection. I will come to that later.The next thing you need is money. The reason money is second is because you can get stock loan from your bank as an option, and your diaper company can also give you stock and you pay after sales. However, you will be needing money as well, whichever way you are going to get it.RELATED POST: How To Make Money Selling Baby Diaper In Nigeria

The Best Secret Of A Distributor

Now, let me explain the secret of a diaper distributor. I’m still explaining who is a diaper distributor. I’m only breaking it into modules so as to help you grasp the whole idea properly. You and I know that the title of a distributor is not a degree qualification but one you can achieve yourself.Hat I consider your three best secret is stock availability, your store location and the number of retailers buying products from you. Early I just gave you the starter plan. Here, I’m expanding on it based on the usage, and I have also included the third one, which is retailers. You cannot be a good distributor without retailers.I mentioned stock as one, then stock location as number two, while number is retailers. The availability and use of these three things is what makes you a distributor. So, if you want to be the best diaper distributor you must seek to have all the three basic things I have just described for you.I will explain further on the three and even show you how to get about them effectively:Diaper Stock AvailabilityThe most important secret about your diaper distribution business is stock availability. You can’t sell what you don’t have in stock. That’s why you need to ensure stock is always available to sell to your customers.Out of stock issues can harm your business more than you would know. The real experience of business is that everyone is trying to make money, and when you are constantly out of stock, your customers start thinking of other places they can get their stock from. Once that idea is instilled in them, you have a problem in keeping their loyalty to your business.One of the way to avoid out of stock is to ensure you have regular stock supply plan. It’s not only making sure your diaper company would keep having stock, but that you also have the money and the space to stock large quantity of diapers.Best Store LocationAlso, your location is important to the business. The best location is not just about using a prime business centre, it also has to do with accessibility and cost for your retailers. Your location should be such that is easier to access and cost retailers less to transport diapers to their various locations.You have to envisage cost for your retailers, unless you are paying for their transportation. Retailers make smaller profit because they sell in retail packs. So they not like a diaper distributor that sell in large stock quantity, and therefore makes profit in bulk sales. Your location should not only be important to you but also to your retailers.Active Number Of RetailersYou cannot even be successful as a diaper distributor if you don’t have good number of retailers buying from you. As a diaper distributor, you major customers are the retailers. The more of them loyal to you the more profitable your business would be. This loyal can cost you something. It’s either because your diaper brand is a fast selling brand or they are enjoying better discounts and incentives.The retailers are your sales point. The more active retailers you have the more sales points for your business. Your business is helped or destroyed by these retailers. While some brand owners allow this last line of the marketing run freely in the hands of retailers, some smart ones controls their products down to the retailers.Although, as a diaper distributor you can’t do much to control retailers under you but you can try to manage them by keeping close contact and communicating frequently with them about the business or products.Every new baby diapers undergone rigorous laboratory tests and analysis in Nigeria for quality and safety by the National Agency for Food & Drugs Administration & Control (NAFDAC), as well as the Standard Organisation of Nigeria (SON) and must be certified to be of good quality and safe before approved for sale in Nigeria. It has to be NAFDAC approved and SON certified.Types Of Diaper SizesThere are different types of baby diapers in the market. The range from 1 to 5 sizes of diapers. For the new born, there’s the Mini (1&2), but as the baby grows the diaper Sizes is adjusted accordingly from Midi (3), to Maxi (4), and to Junior (5).In the packaging, diaper manufacturers package them in different sizes, which we can name as follow: small pack, medium (Eco) pack and jumbo pack. See a little packing information below, but know that these may vary according to different diaper brands.Small Pack SizesMini. 15Midi. 12Maxi.10Eco Park SizesMini. 50Midi. 46Maxi. 42Jumbo Pack SizesMini. 111Midi. 102Maxi. 93As a diaper distributor or interested distributor, you should ask the different packing sizes to help you calculate the retail price and compare with competing brands to know how your diaper would be accepted in the market.

Types of Diaper Distributorships

This helps to give an idea the different part of the network of distribution. And each level enjoys different benefits and cost as well.We have a retail partnership that gives you products at wholesale price. That’s the best option to start with if you don’t have the required amount for the major distributorship or sub-distributorship. But distributors get special discount rates that are not available to our retail partners.Diaper DistributorMust have a verified shop in a major city. You will have an entire state market to yourself. An exclusive distributorship. But that depends on your success in the market. This opportunity is only available to serious minded entrepreneurs. You must be willing to invest more money. And promote the brand in your state.Monthly Target & Benefits:Here are the monthly target and benefit as a diaper distributor at this level. Understand that target is used to inspire sales and benefits are to reward the accomplishment of those targets and to keep distributors inspired monthly to achieve more sales.Below are some of the kind of targets and benefits:
  • Startup requirement would be determined by brand owners. For new diapers you should be looking at paying for 1,000 to 2,000 diaper bags for a start.
  • The monthly target of a particular quantity of diaper bags to be sold
  • This would entitled a distributor to a designated discount
  • The benefit also includes exclusive sole distributorship for a state or city as the case maybe,
  • You can also be allowed liberty to fix your own resell price and customer’s incentives, but this doesn’t apply to all brands.
  • Free delivery of products is also in offer but might be subject to quantity order or designated areas.
  • Priority for available marketing or promotional materials
  • You can also get opportunity for special privileges like – special rebates, credit facility, gifts packs or freebies, etc.
  • This right of first consideration for direct referrals from the company is another benefit but it has to be since you are the sole distributor in that state, other enquiries to sale the same brand is automatically redirected to you.
  • Diaper Sub-DistributorshipThis offer enjoys exclusivity as well. But it’s limited to the particular area in your state. A sub-distributor can only control the area assigned to it. This is usually assigned based on the number of major areas in the state.Some states may have only two sub-distributors or more depending on the number of identifiable areas within the state. The idea of sub-distributor is to bridge the gap between the distributor and retailers that are located far from the diaper distributor.That means the number of sub-distributors are also limited and enjoys some exclusivity as well. The sub-distributors gets their products from the main distributor, excerpt in state where a distributor is not available, then the sub-distributor gets products directly from the manufacturer or importer. And where there is no major distributor, the sub-distributors take absolute charge of the market and can upgrade to a full distributor.Monthly Targets and Benefits:A sub-distributor gets almost the same kind of treatment as main diaper distributors, excerpt that the targets and benefits are lesser than that of full distributors. So, the same benefits apply to sub-distributors but most times in as low as one-third of the benefits, as well as the targets.Starting quantity could be in as low as 250 to 500 diaper bags. See listed targets and benefits for diaper distributors above.RELATED POST: How To Become A Molfix Diapers Distributor Diaper Retail PartnerThe retail partners are the most important partnership in diaper distribution, even though they usually don’t invest more than distributors. Their role in the value chain is more important.You can start with so little and still get products at wholesale price. The advantage is that you can become an exclusive retailer as well depending on your location.You can start with as little as N100,000 or even less. But if you buy up to N100,000 worth we don’t charge you for delivery. That’s if we don’t have sub-distributor yet in your location. If not we direct you to the nearest sub-distributor in that area.Monthly Targets and Benefits:
  • Get Product at wholesale price
  • Opportunity for special privileges such as – gifts packs/freebies, etc.
  • Direct referrals from distributors
  • Help with sells through an attached sales representative
  • Opportunity to become a sub-distributor
  • How New Baby Diaper Market WorksOne thing you should know as an inspiring diaper distributor is that the products you are going to distribute are new diapers in the market. Stop deluding yourself about distributing brands like Molfix, Pampers, Dr. Brown and the likes.These existing brands already have distributors in most markets and therefore may not be available to accept new distributors. And where they can still accept one, the cost requirement may be in the tens of millions.

    But on this platform, we promote diaper brands and new diapers contact us with request for distributors. If you are in our email database you will be notified when there’s a new diaper in the market that want distributors like you.

    To become a diaper distributor is a huge opportunity, and it offers you an exclusive advantage in your market. The only competitors you have is other diaper brands, not from the same diaper brand. And no matter how new the diaper is, it won’t be long before customers would start buying it like the old diaper brands.So, signing up with us to receive email alert is an important step. We need to also be sure that you are serious. Just fill the signup form below to join our list now. 

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     Benefits For New DIaper DistributorsThere is a huge benefit of being the first to start selling a new product, especially if it’s on a dealership arrangement. It gives you all the exclusivity you need to dominate the market. Like, you are the only source of the product sold within the state or city where you have the exclusive dealership.If you know any exclusive dealer in your city you will agree that they are the only source for that product in your city. And they make a lot of profit selling the product.And baby diaper currently enjoys high volume sales because of the millions of children born in the country every year. So, as the brand becomes popular the more customers would buy and the more money you make. Since you will have exclusivity in the market, everyone will be buying from you alone.ConclusionThis opportunity may not always be there. It’s always good to take advantage now that it’s available. Also, the huge market for baby diapers would surely grow and become saturated one day. Only surviving diaper brands will continue to sell in the market.It’s always advisable to join the train early. That’s when to join distributorship for any diaper product. If you wait till when the product is popular you have missed the chance already. The only way you can tap in while it’s still new in the market is if you knew about it. That’s why I’m offering you opportunity to signup for my email alert.Finally, being a diaper distributor doesn’t limit you to only diapers. A business that’s built on distribution can undertake any brand product, as long as it has demand in the market. So, I’m not only going to be sending you email alerts on diapers but other products with distribution offers as they are fresh in the market.

     

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