In the 21st century, so many Kenyans have stepped away from farming and animal keeping to chase white-collar jobs.
Fortunately, the ones who have stayed in the business have stepped it up, kicking it a notch higher by using science to enhance their yields.
Farm chemical companies are also doing better job at marketing their manufactured products making it easier for retailers to resell even to areas where selling these products would otherwise be difficult.
But that’s not to say that starting an Agrovet business and making it profitable is so easy; there are related business demands that you have to meet or otherwise make losses.
That said, running an agrovet business is not just like running a normal shop where you stock at lower prices and sell at higher prices. several factors will determine your profit margins and survival in the field.
To help you understand all the factors at play in this small profitable business, we have put together this guide to help you with the ropes.
An Overview of the Agrovet Business in Kenya
There are several players in the agrovet business.
There is the manufacturer/re-packer who packages the goods, the wholesalers and distributors who sell it to the retailers who finally get it to the consumers.
Distributors and wholesalers usually buy goods in large scale and operate within the requirements of the manufacturers. This guide, however, focuses on running an agrovet retail business rather than a wholesale shop.
How to Start an Agrovet Business in Kenya
Obtain a license
To start an agrovet shop you need the following licenses;
a. County business permit
This is the common permit that is needed of all business and is an average of 7,000 Kenyan shillings, varying from county to county.
b. Certifications from the Pest Control and Products Board
The license fee is 1,000 for retailers and 4,000 for both wholesalers and distributors. It is issued to those dealing in pesticides and related products
c. Certification from Kenya Plant Health Inspectorate Service (KEPHIS)
A certificate of KEPHIS is mandatory.
However, the government is not very good at following up and so many people have gotten away with having businesses run without the license.
It’s however important to be safe and get one anyway. For a retail business, it costs KES – 1,000; for a wholesaler, KES. 5,000 and a distributor, KES. 30,000.
Have You Acquired All The Licences Needed? Now Set up Your Premise
It is best to place your premises in areas with a need for an agrovet business so that you serve the market rather than flood the market.
The best areas are those with less or no agrovet businesses, or rather poorly managed agrovet businesses.
Apart from that, look for a premise where there is a high density of farmers. Most of the time, this is in rural towns and peri-urban areas.
As in every business, consider population, foot traffic, demography, business style, and your personal needs too like proximity to the business.
An agrovet business should not be near food premises or supermarkets simply for safety.
The products should also be protected from chemicals or pests to avoid contamination. The movement of rodents and pests can also pose a safety risk but for rodents and the products.
When setting up your agrovet business, it is important to ensure a neat and efficient display that provides a good image for the business.
Brand your shop appropriately, placing tempting products strategically in the consumer’s view.
Agrovet Shop Suppliers in Kenya – How to Stock Your Shop
When stocking an agrovet shop, strategy and research come to play.
The first part is on the identification of a wholesaler or retailer. Some/so many dealers sell fake products, so it is important to find licensed dealers to avoid paying for counterfeit goods.
Compare prices too. Doing this may save you so much when it comes to the initial cost.
Business Tip: -Stock products that move. You do not want to get stuck with products on shelves past their expiration dates. When choosing products for an agrovet shop, observe consumer behavior and learn what brands are popular among them. Also, observe the type of crops and animals kept to guide you on what to stock.
It is also smart to be stingy when stocking your shop for the first time. Buy a little of everything to give you time to slowly learn the agrovet business.
There are four kinds of agrochemical suppliers in kenya;
- Animal and crop-production companies: They supply both animal and crop products.
- Animal-production companies: These are companies that focus largely on animal products.
- Crop production companies: Unlike animal-production companies such as Coopers, they specialize in crop products.
- Animal, crop, equipment, industrial chemicals: These companies cater to all aspects of agriculture such as Brazafric.
The leading companies involved in the agrovet business are Syngenta, Coopers, Bazafric, Bayer, Osho, Twiga, Amiran, Orbit Chemicals, Farmchem, MEA fertilizers, Ultraveties, Kenya Seed companies, pannar seed, Simlaw seeds and Regina Seeds…
Tips for Starting an Agrovet Business That Actually Makes Profits
As we stated earlier, the success rate of an agrovet business is determined by how it is run.
The profits are seasonal. They are highest during the rainy season when planters purchase products for planting and during harvesting.
Weather greatly influences the product. Always ensure moisture and heat are in check. Do not place some products, especially powdered products like animal feeds too close to the ground as they will cake. Also, avoid direct sunlight on your products.
Factors That Affect The Success of Agrovet Businesses in Kenya
It is usually up to you as an owner to decide how to sell your products. It is important, not to be too expensive to avoid scaring off customers, and not too low, to risk making losses or simply negligible profit.
Your pricing should be guided by;
- Price of goods and the cost of running your business.
- Competition’s prices
- Style of the business
- Location of the premises
The average break-even point is 10 months and could even be less depending on your consumer traffic and pricing.
b. Consumer behavior
Consumers in the agrovet business are generally very unadaptable to change.
They do not like new products so it is always important to stock products that are popular among them to avoid having items expire in your store.
Kenyan law requires that trained and registered ( by the Kenyan Veterinary board) run an aggro vet businesses. The personnel should be trained in plant and animal health, not just because the law dictates that but because having licenced personnel is good for the business.
Trained personnel can understand and connect with the customers’ needs.
They don’t recommend false products at the risk of sounding ignorant to the customers. They are also able to better advise the customers on working solutions, therefore getting better reviews, repeat-customers and a positive image.
For delicate processes such as the mixing of products and the storage of products, trained personnel will minimize any losses by simply performing these actions effectively at their first go.
Survival – How to Grow Your Agrovet Business into a Business Empire
To survive, you need to make revenue that is enough to sustain your business. Revenue is usually influenced by;
- Economic farming and livestock activity
- Weather and Natural calamities
There is always growth in agriculture.
New scientific discoveries are being made, which leads to new products and new methods.
As a business owner, you should follow these trends. Stay in the loop to avoid being outdated and therefore stocking unmoving products or selling products that simply do not work.
There are several ways to get information on theses products; You can attend agricultural meetings, talk to farmers and other players in the agrovet business, read agricultural material and follow agricultural news.
Reasons Why You Would Not Succeed in The Aggro vet Business
Most aggro-vets close for these reasons;
- Stocking unmoving products: – These products are usually very expensive so having idle-sitting products on your shelf can cause large losses
- Search for more profitable alternatives
- Mismanagement of the shop
- Lack of consumers: – This could be for many reasons, for example, a bad image. In rural areas, especially, news travels fast so simply one wrong transaction could cost your entire business.
Business Trends to Follow in an Agrovet Venture
Most farm chemical companies don’t manufacture products on their own.
They import them as active ingredients and attach carriers then package them to sell. In some instances, they buy the goods fully ready and simply repackage.
The internet and modern banking have made importing supplies very easy. Through platforms like Amazon and Alibaba for wholesale goods and Ali-express for retail goods, you can acquire the ingredients directly on your own to avoid the extra prices that you get on the product as it passes through different hands.
Some business owners are taking it upon themselves to set up forums where they educate their consumers on plant and animal health to enable them to increase their yield.
Sometimes, these forums are done in the form of a field day where the agrovet operators demonstrate on open fields how the products are used. This builds a good relationship between the business and consumers. It also promotes knowledge among the consumers so it’s a win-win situation.
For those who cannot set up their forums, there are usually agricultural shows organized within counties. These shows help with the marketing of the products, education of farmers and also a place to sell more products.
Another trend in the agrovet business is having several agrovets in one area come together to buy their products in wholesale then distribute it among themselves.
It saves on the cost of purchasing the product as one can purchase the product in smaller quantities. This also enables the business owners to split other cost like transportation and shipping.
What’s The Future of This Small Business Venture in Kenya?
The agrovet can only grow further.
There is so much opportunity that has not been exhausted yet — some of which could reverse low yields by farmers.
These reverse trends can only be achieved if more aggro-vets come up, share more information about their products and aggressively train consumers on agribusiness.
Is this a mission that you can fulfill? Start an Agrovet business in Kenya today.