Idea 10 of 52 - Egg logistics

Guest Author
(Mr Ebis is the Lead Business Consultant at Agape development Consultants)

  1. Idea

Hi, Still on our series about getting young Nigerians gainfully employed, we explore the business opportunity Eggs from Poultry farms could offer.

Eggs are a very good source of inexpensive, high quality protein. More than half theprotein of an egg is found in the egg white along with vitamin B2 and lower amounts of fat and cholesterol than the yolk. The whites are rich sources of selenium, vitamin D, B6, B12 and minerals such as zinc, iron and copper.

Eggs are in regular demand in Nigeria and can be seen in a lot of departmental stores and street corner shops. They form part of meals in Nigerian homes and also are an important ingredient for bakers.

There are poultry farms in Nigeria, which do vary in scale of operations. These farms would presently have their customers they are currently serving and could also be in need of more. To join in on this Business opportunity, check online for poultry farms, or ask around from people currently selling around you, in corner shops, or departmental stores. Find out who their supplier is, and try to get in touch with the Poultry farmers. This may be easier said than done but it is very possible.

Enter into an agreement to collect eggs from them, negotiate price terms. Rent a car or van (if you do not have one), get to the farm to load the Eggs as much as you can carry.

Be sure to establish connection and agree on price with a customer (corner shop, or departmental store). Find out the size of their order (Egg Crates) and how much they would pay for it.

Supply the customer (retailer) with the crates of egg and get your cut on each crate supplied. The more crates you can transport and supply at a trip, the higher your profit margin (or returns on capital employed).

Idea summary

1.    Identify new markets, new customers to supply egg crates to for resell

2.    Your could also sell directly to the end customer (More revenue, more work though)

3.    Find a poultry farm for your source of Egg.

4.    Agree on price with Poultry farmers and the Retailers (Be mindful of your profit margin)

5.    Make the supply, make the sale

A ran a Google search for statistics on egg consumption. You can do same and see for yourself, that Egg consumption provides a profitable value chain for Business as eggs generate a lot (N220bn) annually in Nigeria.

 

1.   The Business

  Value Proposition: Supply of egg crates from the Farms directly to the stores where they are to be sold.

Customer Segment: Bakers, operators of Corner shops, retailers at markets, departmental stores.

Distribution Channels: Egg depot, departmental stores or retail shops

Customer Relationship: Direct

Key Activities: Selling, Logistics and packaging (the crates), negotiating, supply chain management, customer service, delivery etc.

Key Resources: Startup funds, vehicle, depot (depending on scale of operation), Workforce (Sales team, delivery team, Management team, quality control officer etc.

Key Partners: Egg retailers, Poultry Farmers, Government regulatory agencies, Traders and other related Associations, 3rd party logistics, Bakers, etc.

Cost Structure: Staff pay, work related equipment (Vehicle purchase or rental), licenses (NAFDAC) and other needed permits, etc. Be sure to understand all the cost implications before going into this, these are just a few.

Revenue Stream: Your cut based on your negotiations with the farmers and the retailers or end customers you sell to.

2.   Competition 

As have been mentioned earlier in this article, there are people already into this and so if you join in, you will already have existing competition which you will have to seek to gain competitive advantage over. As there is little or no strong entry barrier, making it possible for you to join in this business, so will it be easy for new competitors to come in to compete with you. A better customer service delivery will always be advantageous.

 

3.   Risks

Some possible risks.

–      Supplier failure can have adverse effect on your business if you are already in an agreement to supply a stipulated number of crates daily. This can be partly mitigated for by entering into prior agreement with the suppliers on appropriate fines and penalties should such failures arise.

–      Poor handling or damage of goods during transportation.

–      Unpredictable government policies could affect supply and invariably require adjustment in your business operations.

 

Summary

This Idea explored the opportunity in providing middleman logistics service in Poultry eggs supply. Get the Crates of Egg from A that produces and supply to B that sells it, or directly to C that consumes or uses the Egg.

Thanks for following this series.

Till next week, stay inspired.

For more information, comments questions or feedbacks, get in touch.

Twitter: @Mrebis

Email: mrebis1@gmail.com

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