1. Small Businesses

How To Start A Profitable Diaper Shop

Do you know baby diaper shop could be your best business opportunity if you know how to go about it the right way? I’m aware that most people want to start baby diaper shop, but it’s either they don’t know what to do or they don’t have the money to get started.

If you want to start a diaper shop, here are what you need to know. It’s the whole truth, and nothing but the truth, as my barrister friend would say. You will be deceiving yourself if you think it would work any other way than how it has already worked now.

One of the major reasons you should start a diaper shop is due to the huge potential in the business. Nigeria records new births of around 5.9 million yearly, according to The United Nations Children Emergency Fund. That’s like 491,666.7 per month, and 16,388.9 births per day. These are new births every single year. This figure increases every year. It’s not like it must be 5.9 million births, it might even be less. But knowing Nigeria this much, the births would definitely be more, with many births outside matrimonial homes.

 

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Also, here’s the statistics of the number of diapers babies at different ages mess up on an average. The babies from 0 – 1 month uses the most number of diapers, with 10 to 12 diapers per baby. That’s around 320 diaper per month. While 1 to 5 months old babies uses 8 to 10 diapers daily or 240 diapers monthly. For 5 to 9 months old babies it’s 8 diapers per day and 240 diapers monthly. 9 to 12 months old babies is also 8 diapers daily or 240 diapers per month.

Try to calculate how many diapers each baby uses in one year, and some of these babies use diapers even when they are up to 3 to 4 years.

Understanding Baby Diaper Market

As a consultant and marketing expert, I know how the distribution network works in Nigeria, because I have helped built some of them. What many do not know is that distribution network work in the same way as Franchise business. There’s some form of exclusivity, and that’s what keeps it working.

If as a retailer you want to build a diaper shop, you have to understand how the market works, the market share of diaper brands in your own market, what consumers experience about using the different diaper products.

It’s wrong to just startup your diaper shop based on the general understanding that diapers are fast selling products. The real questions should be, which brands are selling in your own market? Why are consumers in your location making the choices of the diapers they are buying?

There’s some truth about diaper business you can’t ignore, and that is, the diapers that are fast selling in Kaduna may not be the same fast selling diapers in Abuja or Port-Harcourt, or Owerri. You shouldn’t even choose what diapers to retail unless you already know those that are selling in your location. And these can change regularly as consumer interest changes.

How Diaper Shop Works

If you understand how the diaper market works, then you can start planning how to startup your diaper shop. I’m going to recommend you read these two articles on MyBlog: How Business Works – Beginners Guide 101 and How Diaper Business Works In Nigeria. It would help you greatly in your startup plan.

One other thing to consider is the location. A diaper shop is a location based business. So, your location is very important. If you can afford it, hire a consultant to do location assessment for you in your city before picking and renting the shop. You cannot afford to make mistake with your location, because the entire business depends on it.

Baby diaper shop

I would like to recommend a business plan. I know many of you would not think it’s necessary. That’s what some Nigerian business persons think, but you forget that you don’t build a house without a building plan. There are so many things you will discovered about diaper shop by just reading through this article. A business plan will even open your eyes more, and help you position your diaper shop for profit, if it’s done by an experienced consultant in diaper business.

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However, let’s look at the two different diaper shops you can setup:

  1. Mini Diaper Shop
  2. Mega Diaper Shop

Mini Diaper Shop

Here are my considerations for starting a mini diaper shop. First, you need to identify a good spot in your preferred city or community where you want to setup the shop. Picking the right location is alway key to starting this business, but don’t go for the expensive shop. At this stage it doesn’t have to be a big shop, if you can’t afford it.

Next, you have to decide on the main brands of diapers you want to sell. I would recommend you stock every diaper that is popular in your city. The primary idea of a diaper shop is to give mothers a one stop shop for everything diaper. So, having to stock every diaper customers want is the key.

You have to create the impression that if any particular diaper brand or size cannot be found in your shop, then that diaper doesn’t exist anywhere else. It’s an impression you have to create to drive word of mouth publicity to the shop. However, you should only stock those hard to sell diapers in small quantities and make sure to restock them before they are out of stock.

Finally, branding your diaper shop is another way to create the impression that you are the best and only diaper shop in town. Branding could be just having an imposing sign board that shows what you are about. Another way is to paint the walls with diaper products. Whatever you can do to create this image is better for you.

Mega Diaper Shop

This type of diaper shop can be exclusive or non exclusive shop. The main idea for this kind of shop is to sell at both wholesale and retail. You will need either a distributor licence for the brands you want to sell, or buy in large quantity from a distributor to enjoy quantity order discount.

This kind of shop should be well located on a thriving part of the city centre, in a big shop to create a visible presence. This idea works best in smaller cities where big and well stocked shops are seen as major dealers. The impression you create with this concept will drive customers to your diaper shop.

Also, don’t ignore branding it with diaper brands. You don’t have to stock all diaper brands, just go with the major brands or those the ones you could get better deals on. It’s even better if you do exclusive brand. That way people know you with a particular brand or best to have two major diaper brands that’s also selling well in your location.

Note that you might need to invest millions in this kind of diaper shop. To learn more about getting diaper distributorship license, read this other post: How To Become A Diaper Distributor.

Starting Your Baby Diaper Shop

Once you have decided on the type of diaper shop you want to start, you can now begin the necessary planning to get started. I want to strongly recommend you undergo an apprenticeship training in another diaper shop. A lot of people neglect this but it’s vital to your diaper shop success.

There are certain product profit statistics that you may not have when starting your business. You need to know what product is currently selling and why. For example, during the course of writing this article, I visited some existing diaper shops to ask for certain information regarding sales.

According to some sellers, they make like N100 from each pack of wipes. For the diapers, depending on the brand, it can be between N150 to N250 profit margin per pack. There’s also something that was striking, unbranded diapers make them more profit, in the range of N400 and above.

I have explained these unbranded diapers in another article on this blog. You can read it all for yourself HERE.

How Profitable Is A Diaper Shop?

I will be careful with the profit analysis here because it’s not a general expectation. Somethings are responsible for the high profit. That means if you don’t meet those conditions the result may not be this good, but it’s okay for you to know what’s possible if all the right conditions are followed.

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Firstly, let me give you the conditions below:

  • Rent a shop in a viable location
  • Get diaper supply directly from manufacturer or importer
  • Stock diapers in high demand

You cannot substitute the advantage of a good location when starting a diaper shop. It’s key to your profitability, and should not be taken lightly. The same goes for the source of your diaper supplies. The higher your chain of supply the more profit you stand to make from your sales. Also, the types of diapers you stock would affect your sales. If customers don’t find what they want to buy, it reduces your daily sales volume, and that would In turn affect your overall profitability.

Calculating Potential Shop Profit

There are three ways profit margin is calculated in diaper business. I have given the explanation is much details here: How To Become A Diaper Distributor. However, depending on the source of your diaper supplies would determine how profitable your shop can be.

Let’s look at the figures roughly. These are just assumptions and does not imply a general revenue from diaper brands. Its just to identify how much you could make per diaper. Distributors get discount and bonuses for selling up to a particular volume monthly, while retailers only sell with markup.

Your profitability is calculated by adding your discount, bonus, plus markup and multiplied by monthly volume sales. Assuming your monthly sales is 2,000 diapers, and your discount is 3.5% or N250, bonus of N50 and markup N100. That’s a total of N400. Then, multiply it by 2,000, and you have your monthly sales revenue as N800,000.

This scenario will not apply to all diaper shop. A mega shop can do even more if the right things are done, as I have explained .

How To Pick Your Shop Location

Apart from learning how the business works, my next recommendation is finding a shop in the best location possible. However, the type of diaper shop you plan to setup should determine the choice of location.

In every city there are centers of commerce and activities. You should know such hot places in your city. They are not hard to find anywhere they exist. It might even be inside a popular market. Identify the right location to site your diaper shop, where ever there much human traffic.

Some locations might be costlier to rent than others. You have to consider your type of diaper shop before accepting to pay certain rents for a shop, because your type of shop would determine to a great extent the volume of business and the profitability of the shop.

Simply note, not all location would be viable for your shop.

How To Get Supply Of Diapers

If you are going to start a diaper shop the priority should be how you get your diaper supplies. That means before you even choose the diaper brands you want to stock, you should have considered how you would be getting stocks.

If you are starting on a mini level this may not be a problem, because you have your local audience you are selling to, and that means you can go to the major market around you and source for diapers from wholesale dealers. You don’t need rocket science to know that’s what you should do.

Where you may have a little problem is if you want to setup a mega diaper shop, you would need to make some negotiations with main distributors or the diaper company directly. That might also require you looking to become a diaper distributor yourself. You have to weigh all your options before making decision on this one.

But the two diaper suppliers to consider are either:

  • Directly from diaper company (manufacturer or importer)
  • Or directly from the main diaper distributor for each brand

Don’t assume the person is the main distributor. Find out from the brand owners who their main distributor in your state or city is. That would give you access to source products cheaper and eliminate middlemen that would increase your purchase cost and reduce your revenue.

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Baby diaper shop

How To Pick Diapers To Sell

I shouldn’t be telling you this, it should be something you have to decide for yourself, but I felt some people may not even know how to pick. I recommend you do a brief apprenticeship program with another diaper dealer. You cannot quantify the experience you will acquire in that two weeks or three months you spend there.

Any way, let me give you may personal suggestions of the diapers to sell. This might change with time, and I might not remember to keep updating this list here. So, check the date of this article or when it was last updated to be sure what I gave you is still my choice.

  • Molfix diapers
  • Hughies diapers
  • Prince and Princess diapers
  • Dr. Brown diapers
  • Sunfree diapers
  • Chinese diapers

Let me leave you with this six, but don’t stop at just the six of them. There are many diapers in the market, pick as many as you want. Molfix will always have demand and would keep selling. Huggies is neither here nor there but it has some followers too. Dr. brown has been an old brand. It still enjoys grandmothers love, and often being recommended to young mothers. Pampers is not on my list but don’t ignore it either if you are in a high brawl location.

If Prince and Princess is still in the market, it’s one diaper to always stock. It enjoys demand because of its inclusive free wipes mothers get in the diapers. Its kind of built a cult-thing for mothers who know and love Prince and Princess diapers. Sunfree is also one diaper you might love to keep in stock as well. Nothing much to say about them.

For the Chinese brands, it’s good to also break some rules. If the market is going for something, don’t be totally left behind. As a retail business, sell what is in demand, as long as that’s what the customers want to buy.

For more listing about all the other brands, find it heret: How To Become A Molfix Diaper Distributor.

Conclusion

One thing you must not forget when starting your own diaper shop is that you are not selling to yourself. Don’t just base what would sale by what you like. Business is not led by emotion, but market indexes. If customers want Molfix, don’t give them Huggies and say they don’t have a choice. Someone else would setup right next to you and offer them Molfix, and there’s nothing you can do about it.

My next advice is, it’s called business for one reason, don’t do trial and error. Invest your money wisely, and search for information that would help you succeed. If you cannot invest in knowledge, then you are not better than a foolish investor. If you don’t know much, get the services of someone who knows to guide you. I have seen people willing to invest millions in a business they know little or nothing about, but can’t pay simple N100,000 to a consultant to guide them. (Ignore the amount it’s just for explanation, and not my fee).

Finally, stop procrastinating about this business. You are not the only one who is thinking about this idea right now. Of course I know that too well. I receive thousands of enquiries monthly on people interested in diaper business. If you waste time, someone else takes your place. If you are not ready now, just forget about it and look for something else you can possibly start. Life goes on.

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