Business Ideas: Dealership of Softdrinks and Beer

Beer and softdrinks are among the staple drinks in the lives of Filipinos. Many of us drink softdrinks and/or beer on a daily or weekly basis – and these drinks are certainly always available in Pinoy events like fiestas, birthdays, weddings, and just about any special occasion or gathering. Thus, there is no question that a dealership of softdrinks and beer would be a lucrative business.

So, how can you start a softdrink and beer dealership? The answer is quite simple yet also complicated.

Coke warehouse Kevin Rutherford [CC BY-SA 4.0 or CC BY-SA 4.0], via Wikimedia Commons
Coke warehouse
Kevin Rutherford [CC BY-SA 4.0 or CC BY-SA 4.0], via Wikimedia Commons

Ask and Apply

Companies have different rules when it comes to dealership. For example, some companies only allow one dealer to handle sales for a certain area (often, the entire town or city); thus, the only way you can start a business with them is to be a sub-dealer which means you buy from the designated dealer instead of directly from the company.

Still, you will never know unless you try; thus, the best thing to do is make a proposal, provide the company with a list of things you have, including equipment, manpower, location, space, capital, etc.

Determine Your Market

If the company rejected your application for dealership because they only accept one dealer per area, do not be dismayed. Most of the businesses selling softdrinks and beer are sub-dealers, anyway. You can still get a good profit as a sub-dealer, depending of course on a lot of factors.

Although it would be fantastic if you get key accounts like malls and shopping centers under your dealership/sub-dealership, you must remember that these primary accounts often pay up after a couple of months, say 3 months. If you hit the jackpot and get these accounts, be prepared to have a working capital for at least 3 months or your business could suffer because you have to wait for the company to pay you up!

A good option is to target secondary markets such as small grocery shops, bars, or restaurants [the category could depend on the number of cash registers in the establishment] or tertiary markets such as public markets and sari-sari store.

Bear in mind that there might already be distributors handling your target market and you could be encroaching on their territory! EntrePinoys Atbp (mixph.com) suggests that you approach the distributor in your locality and try to check whether they are open to the idea of you buying from them so you can cater to your target market. This way, the distributor can share their discounts with you as sub-dealer and you do not get enemies by stealing their market.

Money Matters

How much money do you have to start the business?

In a comment on the article about Beer and Softdrink Dealership by mixph.com, Jeff of Piso and Beyond claims he only started with P15,000 capital as sub-dealer and the business has now grown and is worth at least P200,000 in less than 2 years after starting up.

This is good news to many entrepreneurs who do not have a huge capital to begin with! If Jeff was able to do it, so can you!

Of course, if you have a larger capital, you would have better chances of landing a better deal with the company, especially if you can provide trucks and manpower for distributing the merchandise to a wider area.

Be Prepared

Did you know that beer and softdrink companies do not lend you bottles for free? You have to make sure your target market is able to return empty bottles or you won’t be able to buy a new set to sell. Make plans on how you can make the target market return the bottles – ask them for a deposit, etc.

Theft, pilferage, damage in transport, accidents, and other situations could arise in the business. Be prepared to offset losses from these as it is unlikely that the beer or softdrink companies you are dealing with will cover for those. In fact, despite being in those situations, you are still required to pay up!

Also, the company might have a quota as to the number of cases you have to buy each week or month.

Lastly, be prepared to spend most of your waking hours running the company. The profit per case may not be as large as you expected so you have to target selling large volumes if you want to earn well and get back your return of investment (ROI) soon. Good luck!