Once you figure out the production/manufacturing of your product, distribution becomes the real and main constraint.
The industrialization vibe is catching on Ugandans. A good number of them have gone into the cottage industries, to try and make a product for the market.
The initial struggle is usually about getting the product out of that home factory aka the product development. It takes some time to source the materials, design the right product, get some few machines/equipment in, get the branding, packaging and finally producing the first products. Of course, this could also involve the regulatory aspects such as the UNBS certification.
When all this is said and done, the real monster in the room appears – distribution.
And distribution is hard because you don’t do it once, it’s like the Rosary, it’s recommended always. Distribution is the blood of every business; it must keep flowing.
And there are two types of distribution:
1. Mental Distribution
Getting people to know your product, to consider it top of mind when they are making the purchase decision. Assuming you set out to produce wine, will Natasha think of you as she buys wine in the supermarket? What about in the bar? This is now a function of marketing, branding, communication. To ensure that your product has space in people’s heads. You can think of the different touch points, take out a billboard, get radio mentions, roll out a digital plan, word of mouth, endorsements, name it all.
2. Physical Distribution
Now, it’s one thing for people to know you, it’s another thing to find you when they need you. You could make the best wine, but if I am in Arua and I can’t find it, I will choose the next available wine. So how will you be in Arua? In Gulu? How will you get there? Will you get a distributor? Or will you go direct to the retailer? Will you do your own direct to customer deliveries? What about the trucks? The bikes? And how will you monitor this stock on wheels?
Manufacturing is hard because it has many moving pieces. That’s what people soon find out. It’s hard if you don’t work hard at it. It requires one to have detail. There are many hidden costs. How will you price that product? How much are you giving to the distributor? To the retailer? For example, on beer distribution, you will find the distributor getting around 3-5% margin on a case, the depot could get about 7% while the retailer/the bar gets a 13%. Then you have the main man, the Tax man, how much excise duty? You then need a manufacturing accountant to ensure you are not working in losses.
Soon you realize why most MDs in this country worship the Kikuubo people. Kikuubo is the lifeline of most products in this country.
For those in manufacturing, think hard about that distribution question. It’s not an obvious one. Even the Cocacolas of this world with all their financial muscle are still solving that question.