How to Start a Wine Retail Business in Nigeria

By: Jayne Badmus /
 March 17, 2022
  / 10 min read
Categories: Business Ideas, Small Business

If you’re enthusiastic about wines and have the financial means to establish a business, running a retail wine business is one of the most lucrative businesses to start in Nigeria. Although it requires a great deal of financial startup and a basic understanding of wine and the various varieties of wine you want to sell, it’s no doubt that wine is a big deal in Nigeria, and selling wine is profitable in Nigeria.

According to Silicon Valley Bank, the wine industry was a $30 billion high-growth industry for both domestic and international wines during 2008 and 2009, with long-term sales growth anticipated to be between 4 and 6%.

Although the wine business is one of the most profitable in Nigeria, few people engage in it. And it’s possible that this is due to the high expense of launching the business plus only people from the upper and middle classes are interested in buying wine. Wines are expensive, which is why only a select few can afford the privilege of purchasing a bottle. As a result, wine shops are largely patronized by the upper and middle classes.

Wine Business In Nigeria 1
A typical wine shelf

Because of the wine industry’s razor-thin margins, as an entrepreneur, you must be giving advice and suggestions to your prospects/customers on the types of wine that are appropriate for various occasions, this will pave the way for trust and long-term relationships, allowing you to build confidence, trust, and a positive relationship with your customers. In addition, a background in accounting can help you succeed in the wine business.

Alcohol is heavily regulated in many places around the world, including Nigeria, with severe licensing requirements and a mountain of paperwork. So, before you can sell or distribute alcohol, you are required to have a liquor or alcohol license.

To take on the task of how to start a wine retail business, you must be driven, fearless, and enthusiastic about your profession because starting a business in any field is difficult, and the wine industry is no exception.

As a wine dealer in Nigeria, you may be a distributor or supplier to retailers and wholesalers. You can either be a direct importer from a winery or a dealer from another country. However, the focus of this post will be on how to succeed as a wine business owner in Nigeria.

Why you should consider starting a wine business in Nigeria

 The wine business is one of the most lucrative businesses you can start in Nigeria

Wine retail and distribution is a very lucrative yet unsaturated business in Nigeria. Wines are one of the most expensive drinks you can think of in Nigeria. As they are typically sold in exquisite places, only a selected few persons have the luxury of buying wines.

wine

This is one reason why you should consider starting this business because you have the leverage on the rich and middle class who can afford the luxury of wine. You can also distribute to club owners and bars in Nigeria if you want. Your business has a high chance of booming in a few months if done properly.

Variety of income-generating options

Starting into the wine industry involves taking on one or two parts of the industry; you may be a distributor or supplier to retailers and wholesalers, You can be a direct importer from a winery or a dealer from another country, or you can even have a winery.

You might also work as a wholesaler, selling large numbers of wines to shops. You could open a wine bar where people can meet and converse over a bottle of wine. There are so many income-generating options once you’re in the wine business, but whatever approach or business model you choose, there is always going to be an opportunity for significant profit to be made.

Steps for starting a wine retail business in Nigeria

Knowledge of wine 

Learning about how wine is manufactured and the pressures that necessitate an entire business to bottle, transfer, and sell it, will help you to be a more conscientious dealer of wine.

Wine education is interesting because it is hands-on, especially when tasting is involved.

On a serious note, wine tasting provides immediate gratification because you get to experience the so-many flavours, and wine varietals on the market.

There are reasons why Italians make wines that are rightfully high in acid, fresh, and fruity, just as there are reasons why Santorini, Greece producers make bright, high-acid, mineral-driven wines. A wine education includes a study of foreign culture, food, and lifestyles.  If you want to manage a wine business properly, you must have some wine expertise, just like any other business. Knowing about wine will elevate your authority in the eyes of your prospective consumers.

Wine tasting
Wine tasting

Wine and food are two of those things that can bring people together, help them connect, and spark discussions that may otherwise feel forced or monotonous.  Even if your goal isn’t to become a full-fledged winemaker, learning a few of the fundamentals might be a fun way to become engaged in the business.

There are trainings on wine tastings too, this helps your customers trust that you know and sell the best and can guide them on what wine is right for every occasion.

The wine business requires that you know a lot about what you are offering, such as their tastes, alcoholic content, if any, most liked by clients, and which wine complements each specific stand.

You’ll get fresh perspectives on farming and what it means to plant organic vs. biodynamic grapes, and you’ll quickly realize that there are genuine reasons why certain nations impose severe controls on grape cultivation as well as laws on grape production.

Market Research and Competitor Analysis

Who are your prospective customers? and who do you have to compete with in order to have a share of this wonderful population?

Well, let’s help you do some of the homework.

The middle and upper classes in Nigeria are the most worthy customers for this business — They have the financial means to acquire virtually any type of wine they like. Competition is a bit rife in this industry because everyone has a chance to attract their own clients; all you have to do is have the drinks your customers want at the proper price. These elements aid a business owner in competing successfully.

Here are some notable competitors you’d have to wrestle with should you decide to start a wine business in Nigeria;

Choosing a Business Name and registering with the CAC

You’ll need a business name in mind before you start your wine business. You should double-check that the name you desire for your business is available and that it hasn’t previously been taken by another. This will be crucial when it comes to actually selling your wine, as a name can go a long way in terms of branding and making your wine stand out and be remembered.

You will also need the domain name for the name you pick to be accessible so that you may build a website and other online marketing tools, such as an Instagram account.

The Corporate Affairs Commission(CAC) registers every business in Nigeria and it is pertinent that you register yours with them. Learn about any rules governing the selling of wine or other alcoholic beverages.

Outline your budget and Business Plan

Truth is, you need money to start a wine business, and you need money to manage a wine business. Money is quite important in this area of business, depending on the type of wine you want to stock. Some wines are relatively expensive, and the pricey wines are what a large number of people want to buy.

Depending on where you live, you should budget at least, between N500k and N700k to start your wine business. That is for a small-scale wine store, and it does not cover the cost of renting a store or installing wine racks. For starters, the sum is for stocking your business and you may want to know how to achieve your budget process. 

When creating your business strategy, you should conduct comprehensive research on the industry and your competitors. Include a synopsis of your business to begin, followed by a company overview, market analysis, specifications on the product you want to sell, financial predictions, and other information.

The more sales you make, the more your store will be filled, and you will steadily develop from there. If you are not able to raise 500-700k on your own, you may seek outside help by taking up a loan.  If you only have a little business with a few wines on the shelf, no one will want to patronize you, so its best you start this with a reasonable amount of capital.

You may use a business plan template or create your own. In any case, it should be thorough and incorporate a substantial amount of research. It’s also not a static document; it should be modified as your wine business develops and your objectives shift. Consider it from the standpoint of a potential investor: What information would you like to see if you were considering investing in a business?

Choose a good location

Location is a key thing to consider before embarking on your path into the wine business. It is important that you must get your store location in the urban area of your state in order to attract a large number of clients who can afford and patronize you at any time. Having a large shop is beneficial to your business because you will have enough space to showcase a large selection of wine, which will attract clients and entice them to return, if not to acquire the same drink, but to try a different sort of wine.

Your wine store should be positioned in a popular section of town where both legs and vehicles can access it.  If your wine shop is in a remote location, it will have a negative impact on sales since many customers will not notice it. Visibility is extremely important in this business, especially in this day and age when attention spans are so short.
Consider your consumers and target market, who are upper and middle-class folks who reside in the high-classed regions, before deciding where you may secure your location.

Find Reputable Suppliers

It is critical to have a dependable supplier who only sells genuine items. Find a dependable source that will give you the quantity you want at a fair price. Get someone who can deliver on time as well, as this is critical to your business.

Having high-quality wines delivered on schedule establishes your service as trustworthy in the eyes of your clients. Always contact or talk with your supplier on WhatsApp to stay up to date. You may also need to ask your suppliers these questions often; What are the most popular wines right now? What are the most often requested wines?

Find a logistics partner

As a new wine business owner, you may be confused when it comes to picking a logistics partner to handle all of your online orders. You need someone who can plan, execute, and control the movement of your parcels with your shipping partners (individual carrier or aggregator), from the time they are picked up from your warehouse until they are delivered to your client.

Depending on their business model, different logistic providers undertake various fulfilment activities. If you wish to form a distinct relationship with individual carriers or aggregators, consider the following:

  1. Coverage area
  2. COD vs. NON-COD service
  3. Time required for delivery
  4. Shipping charges are based on the number of orders placed. Customer assistance is available.
  5. Attempts at redelivery
  6. Remittance time frame
  7. Procedures for booking

If you want your logistics partner to handle all of your fulfillment needs, order tracking, and order shipment, look for the following characteristics:

  1. Create shipping labels automatically
  2. Automatically assign package dimensions
  3. Auto-assign a carrier for shipping
  4. Order monitoring
  5. Order status changes in real-time

Promote your Wine business online

Always be prepared to promote yourself at any available time; have a business card and some business flyers with you. Inform people about your company, show them where it is, and even offer to accompany them to your store. Advertise on billboards and radio stations in your area.

If at all feasible, create a website for your business so that people know what you sell and that they can easily reach you by phone or through the website. Discounts could be given to individuals who buy in bulks, as a way of enticing them to buy more or come back.

You can also promote your business through social media, influencer marketing, blogs, directories, google adverts etc.

Other Requirements

  • Equipment: Refrigerators, shelves and racks, delivery vehicle or bike
  • Shelves and racks
  • Office or reception
  • Tasting room

Staffing Requirements

Driver or Deliveryman:

Delivery man or Driver to ensure that items are delivered to your clients on time. Delivering a broad range of things is one of the delivery driver’s tasks. You may need one. Here are the responsibilities of a driver or delivery man.

  • Following delivery driving routes and timetables
  • Loading, unloading, prepping, checking, and running the delivery vehicle
  • Providing a diverse range of products
  • Following delivery driving routes and timetables
  • Loading, unloading, prepping, checking, and running the delivery vehicle
  • Deliver a large range of things to various places and via various routes
  • Routes and timetables should be followed.
  • Load, unload, prepare, examine, and drive a delivery vehicle.
  • Request feedback on the services offered and handle any concerns from clients.
  • Collect payments
  • Inform customers about new goods and services.
  • Complete logs and reports
  • Observe DOT requirements and safety standards.

Salesperson:

  • Ensures that all client contacts (e-mail, walk-in centre, SMS, or phone) offer the client a tailored customer service experience of the highest calibre.
  • During phone interactions with consumers, take advantage of every chance to pique the client’s interest in the company’s products and services.
  • Manages administrative responsibilities assigned by the human resources and administrative managers in an efficient and timely way.
  • Consistently keeps up to date on any new information about the business’s goods, promotional activities, and so on in order to provide accurate and helpful information to clients when they make inquiries (answer customer queries regarding the store and the wines)
  • Determines the needs of the consumer, recommends, selects, assists in the location of the appropriate item, and describes the qualities and advantages of a product.
  • provide recommendations and encourage the acquisition of items

Inventory manager or storekeeper:

  • In charge of overseeing the store’s everyday operations.
  • Ensures that the retail facility is in good working order and that it is welcoming to consumers.
  • Checks stock, places and expedites purchases, and evaluates new goods to keep office supplies in good condition.
  • Ensures equipment operation by performing preventative maintenance needs and requesting repairs.
  • Participates in educational opportunities, reads professional publications, maintains personal networks, and participates in professional organizations to keep job knowledge up to date.
  • Improves the reputation of the department and the company by embracing responsibility for completing new and diverse demands; identifying ways to add value to work successes.

Social media manager

  • Manages online research and coordinates all information sources in order to keep the organization’s top customers and recruit new ones.
  • Analyzes the amounts of transactional data generated by consumer purchases
  • Identifies, prioritizes, and contacts potential partners and commercial possibilities, among other things on all social media platforms.
  • Responsible for overseeing implementation, advocating for the requirements of customers, and online communication with clients.
  • Contributes to the company’s growth and sales via the internet.

Conclusion

Having a wine store or running a wine business involves numerous problems, such as acquiring clients and making sales, but this should not discourage you because every business has its own set of challenges.  Start the business, understand the method, put in the effort, and be patient, and you will be successful.
Regardless of your wine business plan, remember that the ultimate success of your company is dependent on catering to your customers and keeping up with their changing tastes, spending patterns, and the industry as a whole. This is one of the most important aspects.

These are my final thoughts, to be successful in this business, attend wine parties, network with people, and capitalize on your positive relationships. Request referrals from your customers. If they are pleased with your services, they will gladly recommend you to their friends.

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