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List and explain five problem of distribution of commodity in nigeria?

List and explain five problem of distribution of commodity in nigeria?

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Answers (3)

isaaq
3 months ago
1. Activities of Middlemen
2. Poor Road Network
3. Lack of Proper Packaging
4. Inadequate Storage Facilities
5. Hoarding

1. Activities of Middlemen: Most intermediaries are very exploitative. This singular tendency has made it difficult for the retailers and the consumers to purchase goods at a reasonable price.

2. Poor Road Network: Road Network in most country is bad most especially Nigeria as this makes it difficult for goods to be moved from one destination to another.

3. Lack of Proper Packaging: When goods are not properly packaged, they do not attract the desired patronage, as this is one of the major problems, it is the bane of effective distributive trade.

4. Inadequate Storage Facilities: One of the major challenges facing distributive trade in Nigeria is lack of adequate storage facilities, as commodities that have high perishable rate cannot stand the test of time because of this problem.

5. Hoarding: There are unscrupulous people who imbibe the habits of creating artificial scarcity of goods in a country through hoarding as this has greatly affected the distributive trade in the country.
They include:

The legal factor The government through the laws governing Nigeria & the agencies created to enforce them affectsenterprises in many ways, some of which are: regulation of how the company does its business,how it gives information about its existence and performance, how it treats its employees etc.So organisations already sited here have to carry out business within the limits of Nigerian law andintending entrepreneurs must carefully put this into consideration, if they must do business in Nigeria.

. The unemployment problem In a country where most of the people old enough to work are either completely or structurallyunemployed, taking out a huge chunk of people who otherwise should've constituted part of thetarget market for various goods and services -- but as it is now, don't have the buying power required to purchase much of the goods and services being produced in the country, the businessman has to live with the fact that most of his potential market actually don't have enoughto buy his products or services.That is of course with the exception of goods or services that are not luxuries, but necessity. In thiscase this doesn't pose much of a problem to the business, as everyone would have to pay veryvirtually any price for its goods or services.

. Ethics/Morality As is the case in all other countries, the moral values of the Nigerian peoples either directly or indirectly affect the local business environment, whether positively or negatively.For example, it is quite common for larger organisations or even government corporations givingout contracts to actually do so, not on the basis of merit, but on who or who does not bribe theofficial(s) in charge of approving the contracts. In this case, the businessman who is unaware of this, though duly qualified to win the contract, may end up wasting his time and resources, as hemay not get the contract, even though he deserves to.
Based on the numerous requests to find a
distributor, I decided to write about some of
the major challenges of distribution in Nigeria.
Although these challenges vary from sector to
sector – distribution of Fast-Moving Consumer
Goods (FMCG) products differ from the
distribution of medical devices – the
challenges listed below are the main
challenges that cut across most sectors
especially as it pertains to Business-To-
Business (B2B) distribution in Nigeria.

Here are the top 5 challenges:
Beauracracy and Red Tape: Although Nigeria
has access to a coastal line that should make
international trading easy, getting your product
into Nigeria can be very challenging. Customs
and port authorities can make it very difficult
for businesses to get their goods cleared at
the port. The Lagos port complex in Apapa,
Lagos is the biggest port in the country and
that is where most imports come through.
Deciphering the regulatory environment can
take time and bureaucratic red tape can leave
executives frustrated even before their
products leave the port and hit the roads.
Bad Roads & High transportation cost: It is
not an understatement to say that the roads
in Nigeria are not in very good shape for
efficient distribution. Nigeria is no different
from other frontier markets that struggle with
inadequate infrastructure. Bad roads
significantly increase transportation cost for
distributors. This cost of transportation is
further increased because of a fragmented
market that is not always connected to the
major road networks. So depending on your
product and where your customer is, the
distribution challenges are heightened when
the consumer is not in a major city and is not
connected to the major road networks. Learn
more about the distribution and transportation
network in Nigeria.

Difficulty navigating bad roads make
distribution more challenging in Nigeria –
Ijoko Road in Otta, Ogun State, Nigeria

Warehousing & Inventory Management: After
overcoming the challenge of getting your
product into the country and the difficulty of
navigating the bad roads, the next challenge
is storage and inventory management. Some
distributors do not have the appropriate
warehouse infrastructure for the products that
they distribute. For instance, perishable goods
that have to be stored in cold rooms will suffer
from the inconsistent power supply that
affects every Nigerian business. Because of
high storage cost, some distributors outsource
their warehousing, exposing their international
partners to additional risk. There is also a lack
of visibility into the market because
distributors lack the required information
technology infrastructure, making it difficult
for management to keep proper track of stock
levels and to share that information with
partners in the market.

Demand Planning, Sales & Marketing: Closely
linked to the lack of information is the
challenge that distributors have with
forecasting demand and meeting their sales
goals. Along with fluctuating costs and a
devalued currency (Naira), distributors in
Nigeria struggle to get their hands on foreign
exchange. This makes it difficult for some
distributors to bring in goods at a consistent
and steady rate to meet the demand for the
product. This is also compounded by the lack
of market information and an inconsistent
marketing strategy that does not allow the
product to secure a dominant and secure
position in the market. This is
particularly frustrating for both the distributors
and their international partner. The
international company is unhappy about
inadequate sales. The distributor, on the other
hand, is frustrated with the lack of marketing
and sales support from the international
company. The less information shared
between all stakeholders involved, the less
successful the distribution strategy is.

Finding the right people to work with: Last but
not least is finding quality staff. As
international companies find it difficult to find
the right distributors, so do distribution
companies in Nigeria find it difficult to find
the right staff – well-trained drivers,
marketers, sales people – to run their
operations efficiently. The problem of finding
high-quality skilled labor is an issue that
plagues most businesses in Nigeria – not only
distributors. A survey of over 100 small
business owners revealed that the number one
issue that Nigerian business owners have with
their business is finding quality and highly
trained staff . As companies look for
distributors in Nigeria, they have to take the
skill-gap into consideration. Businesses have
to consider training as a potential cost when
choosing a distributor in Nigeria.

While these challenges may seem
overwhelming, a good amount of
multinationals have made significant headway
into the Nigerian market. To thrive in the
market, you have to be patient to properly
understand the market and be willing to invest
in finding the right distribution partner, training
the right people and providing the appropriate
marketing and sales support to your local
partner. These have to be incorporated in your
distribution strategy if you plan for long-term
success in the Nigeria Market.
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