The spice business has good margins and is a popular and fast moving product. But it has competition around every corner. Here is how to get into this business now.
The spice business has many facets: manufacturing, wholesaling and retailing. The higher up the chain, the more capital you need to get started. While it is possible to start at the lowest end (retail) with little capital, for a small business, I think it’s better to be suppliers to small businesses than to retail the spices direct.
The spice retail space
Unless you are going to open a dedicated spice shop in mall with lots of foot traffic (which requires a bit of capital), selling spices on its own is not too lucrative, people normally just buy at whatever shop is closest to them. The sweet spot in this business is to sell to the people already selling spices; this will allow you to have a wide network of people to supply to.
The business model in this business is to buy spices from manufacturer, importer or distributor in let’s say 20kg sacks, then you make up 20, 1kg bags and sell it to resellers. The small business resellers in this game don’t like to buy large quantities at a time, as it ties up capital and prevents them of having a variety if they don’t have lot of capital.
Once the spices is weighed, it is bagged and labeled ready to be sold. Your buyers will then take they 1kg bag and divide it into smaller bags, depending on the spice, this can be 10, 20, 50g bags. This depends on the type of spice as some spices are some in smaller quantities than others as it is much more expensive.
Your target market is spice sellers selling from home, small shops, spaza shops etc.
You have to decide how broad your offering will be which will also be determined by your market.
Expanding your offering
There is a way to make even more money in this business and that is to offer your clients custom labeling and even sell plastic bags or small paper bags that your customer will sell it in, this will make you a one stop shop. You will most likely already have a label printer that you use to make your own labels.
Offer to make labels for your customers which they can peel off and stick on the bags that they will make up. You can sell smaller bags made up already with your customers name/branding but that then adds more work and will surely require an extra pair of hands.
Labels are everywhere as barcodes, delivery addresses, on sweet packets and on countless other things. Start your own business printing labels for people. Label printing is a great business, modern label printers are able to print large volumes of labels, cheap and fast, and to keep up with this labels are disposable meaning repeat business.
Spices are a commodity that is commonly available but by supplying resellers you are able to grow this business to heights you would not have been able to achieve without a retail presence in a busy mall.