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How To Start Cooking Gas Distribution Business In Tanzania…..Detailed Reuirements

LPG Gas Bottles. LPG plant

Cooking gas Image

Cooking gas becomes so popular fuel for cooking.  Have you ever wondered why is everyone using gas for cooking now?.   The answers are pretty simple.

The first thing first, cooking gas is environment-friendly, cook food faster. Best of all cooking gas is very affordable

Cooking gas is also called  Liquefied petroleum gas (LPG)  or simply   “GAS” as everyone calls it.    Cooking gas is made up during refining of crude oil or processing of natural gas.

I don’t want to go deeper into this subject of the formation of Cooking gas.  Let be the story of another day. The topic at hand is how you start, run and make good money selling cooking gas in Tanzania

The market for this product is growing at faster rates. To save forests, government encourage the use of this product. So even people in rural areas are switching from the use of firewood and charcoal.

This business has attracted a lot of entrepreneurs in Tanzania. And cooking gas retail shops are in every street corner.

I often wonder, how do they make a profit with this intense competition. But the best part is that, as the number of the household switch to this fuel,  demand increase and more customers arise.

    Start-Up Money

You don’t need all the money in the world to start up cooking gas business in Tanzania.  With 1,670,000TZSH  you are staring    mid-sized cooking  gas  business in Tanzania

So before we go any further      let look at  budget for starting this business

Gas cylinders (     15kg gas  and 6 kg.  about 20 pieces each size of cylinders) TZSH          1,140,000
Business license   TZSH              80,000
Fire certificate   TZSH          100,000
Hose pipe   TZSH           60,000
Dry powder fire extinguisher 6kg   TZSH           90,000
Miscellaneous   TZH             200,000
Total                                  TZSH          1,670,000      

Read:      How-to-start-video-production-business in Tanzania

How is profitable is Cooking Gas Business In Tanzania

The average profit you can make for selling   15kg cylinder is  TZSH 7000. You buy at a unit cost of  TZSH 47,000 and resell at TZSH 40,000. So if you sell 10   cylinders in a week will make  7000×10= Tzsh70,000. In a month it is possible to make TZSH 280,000

The profit you can make for supplying 6kg cylinder is TZSH  4000. So once you selling 10 cylinders in the week will make you  4,000×10=TZSH 40,000. In a month you will have  a profit margin  TZSH   160,000

That is just an average profit you can make. But I guarantee you 95% profit if you do a good marketing and you sell your item in a good location.

Tips  To Succeed In This Businesss

   

1:Do  home deliveries

Cooking gas is the constant pushing business, so staying back and hoping customers will knock on your door is not a plan. To stand out you should do home deliveries with no extra charges.

Considering you’re starting with limited fund,   so delivering cooking gas to the customer’s doorstep with no extra  costs. might be stressful. But using a cheaper alternative to supply gas can be easily solved the challenge. So  considering using bike instead of car


2:Pick  good marketing strategies

Cooking gas is the personal contact business. So the word of mouth will really work. Approach a friend and family members and tell about your business.  The location is everything. Locate your shop in the area accessible to your target Customers. If you are reliable and you deliver on your promise.  Customers will become a friend of your business.

  Challenges In s  Cooking  Business

1:Fire explosion

Cooking gas is  flammable in nature. That’s can catch fire easily. To stand out, observe gas leakage and fix a problem quickly. Most importantly get fire extinguisher in your store

2:Price volatility

Cooking gas business is the boom and bust business due to the prices fluctuation in the global cooking gas market.  So when the price of cooking gas in the global market drop. It affects the local price as well. This ruins your business as the many customers saves money on buying gas. This will  drop your sales and profit as well.

So,  go out there and make it happen. You will thank me later.

I would love to hear your thought. Leave your comment below.

Updated: May 22, 2017 — 4:07 PM
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