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cement shop?
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kigogo
#1 Posted : Wednesday, May 22, 2013 5:21:59 PM
Rank: Hello

Joined: 5/21/2013
Posts: 5
hi wazuans, could you please let me know if it is possible to start up a hardware business of selling cement (either nyumba or simba-the prices are relatively cheaper unlike bamburi or athi-river) with a start up capital of ksh.150,000.
If i buy at factory price of ksh.680 (average price) i will start with about 200 bags of 50kgs.
Is it possible to start with cement only, can it prosper?
Am planning to set up the biz in a place like kenol, muranga, or nanyuki.
Also consider that the above capital does not include rent, licences etc which i believe will be less than 20k.
I may in future expand to include paints, mabati, etc
IDEAS WILL BE GREATLY APPRECIATED
thank you
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madhaquer
#2 Posted : Wednesday, May 22, 2013 6:00:37 PM
Rank: Member

Joined: 11/10/2010
Posts: 281
Location: Nairobi
Depends on the turnover rate.

Some rough maths here:

Assume you sell 200 bags weekly at 720/= Is that possible ?
Thats a margin of 40 bob/bag => 8k weekly
Assume monthly expenses will be 20k (Not reasonable)

It takes 3 weeks of consistent sales to cover expenses and around 12k monthly profit assuming your running costs are accurate.
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a4architect.com
#3 Posted : Wednesday, May 22, 2013 6:01:32 PM
Rank: Veteran

Joined: 1/4/2010
Posts: 1,668
Location: nairobi
i have never seen a cement only hardware. current prices of cement are between 690 to 730 so profit is negligible considering cement is heavy and bulky hence high handling costs.
As Iron Sharpens Iron, So one Man Sharpens Another.
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madhaquer
#4 Posted : Wednesday, May 22, 2013 6:08:59 PM
Rank: Member

Joined: 11/10/2010
Posts: 281
Location: Nairobi
a4architecht is right. Unless you are a large transport business doing bulk distribution and wholesaling, cement only is too risky a strategy.

Since you are paying rent and license fees etc, and you must have staff available to serve the customers, you might as well stock other fast moving building materials that can cover most of your petty cash. Think of nails, pipes, taps, barbed wires, basic building tools, etc.
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mawinder
#5 Posted : Wednesday, May 22, 2013 6:15:59 PM
Rank: Elder

Joined: 4/30/2008
Posts: 6,029
I am selling Bamburi cement at Kshs.610 per 50kg bag ex Mlolongo.
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a4architect.com
#6 Posted : Wednesday, May 22, 2013 7:01:41 PM
Rank: Veteran

Joined: 1/4/2010
Posts: 1,668
Location: nairobi
@mawinder..wow...thats such a low price. @kigogo..take advantage
As Iron Sharpens Iron, So one Man Sharpens Another.
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Sober
#7 Posted : Thursday, May 23, 2013 7:23:15 AM
Rank: Elder

Joined: 11/27/2007
Posts: 3,604
mawinder wrote:
I am selling Bamburi cement at Kshs.610 per 50kg bag ex Mlolongo.


he he! ex-mlolongo
African parents don't know how to say sorry.. the closest you will get to a sorry is a 'have you eaten'
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ZZE123
#8 Posted : Thursday, May 23, 2013 10:46:39 AM
Rank: Elder

Joined: 6/21/2008
Posts: 2,490
mawinder wrote:
I am selling Bamburi cement at Kshs.610 per 50kg bag ex Mlolongo.

Are you serious? Can I place and order??
The man who marries a beautiful woman, and the farmer who grows corn by the roadside have the same problem
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mawinder
#9 Posted : Thursday, May 23, 2013 11:21:15 AM
Rank: Elder

Joined: 4/30/2008
Posts: 6,029
ZZE123 wrote:
mawinder wrote:
I am selling Bamburi cement at Kshs.610 per 50kg bag ex Mlolongo.

Are you serious? Can I place and order??

Cash on collection but today may not be possible due to the huge snarl up in Mlolongo and the minimum bags I can sell is 560 bags.
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Zenge
#10 Posted : Thursday, May 23, 2013 12:02:27 PM
Rank: Member

Joined: 4/7/2011
Posts: 105
I have also been thinking about a hardware business in a serious way. I would appreciate ideas on starting up ( i have 650k) i.e the margins, the fast moving items, the challenges and opportunities. etc anyone whos doing it please
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