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How to Start a Cement Dealership Business?
The cement industry is an important part of the Indian economy with its large contribution to GDP. India is the largest producer of cement in the world, second only to China.
Recent reports say that India has a huge potential for infrastructural growth. When the future of involves the development of 99 smart cities, you can expect a positive growth in the cement business.
To reap the benefits of the benefits of this business, you can opt for a cement dealership/franchise business in your area.
Things you will need to get started with a cement dealership business:
Brand and Type of Cement
Brand/company: The main point you should be clear about before you start any franchise is the brand you want to get associated with. By becoming a franchisee, you are buying the right to use the company's products and business models for your profit. Some of your options in India are JK, ACC, Ultratech, Bangur, Ambuja, Reliance, Shree Ultra and Jaypee Cement.
Type of Cement: There are two kinds of cement: White and Grey. Some companies provide separate dealerships for grey and white cement. For example, JK Cement provides it separately to existing complimentary businesses; which means that if you have existing tile, paint and hardware business, you are liable for white cement business. The company expects you to have prior knowledge of your industry.
On the other hand, brands like ACC cement give dealership to new businesses too.
Requirements
Not all companies need you to have an established related business. You just need to get your business registered with a TIN (Tax Payer Identification Number) and other requirements for running a commercial space in India.
But if the company already has a cement dealer in your area, it may be difficult to get a franschise. It will depend on the demand in your area and the proximity of the other existing dealer.
Infrastructure
You will need at least a 500 sq ft area with basic amenities to stock the cement bags without deteriorating its quality. Your store should also be placed in an area where heavy vehicles like trucks can easily unload the cement bags.
Who should you contact?
You will have to contact the marketing executive of the brands in your area. They will give you a clear idea of the prospect with all the additional details you may need.
Return on investment
On an average, you should be making Rs 10 to 15 on every cement bag you sell. This again depends on the company's policy.
Amount of investment needed to start a cement business
It's hard to say how much of investment would be needed to start a cement business. Some estimates range from Rs 3 lakhs to Rs 5 lakhs. Apart from this it depends whether the store house and the show is owned by you. If you are renting, you should factor in rent deposits etc., into your investment. Overall, we believe engaging in the business is good and investors should go for it. This is because as the nation develops there is a possibility that cement demand would continue to rise. However, the location and the cement brand would be important in finally determining the success of the business. On the other hand, if you borrow money from the bank or institution you would also need to factor in interest costs associated with the same.
