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Tuesday, 6 June 2017

How to start a Cold Pressed Oil Reselling Business?

I had met Valli in a seminar around 5-6 months back. When I was browsing through my contacts on phone her name suddenly popped up and I thought of calling her. After regular hi hello conversation I asked her so what do you do? For which she replied:”I’m into reselling cold pressed edible oils. Not really to make huge profit, but we have benefited from the quality of oil and hence want it to reach more number of people”. The warmth in her conversation wanted me to book 2 bottles of coconut oil for my home use right away!
In fact, last couple of years have seen sudden increase in many people reselling these cold pressed oil citing the benefits of them over refined oil packets. It says refined vegetable oil is no more a healthy option for cooking. Nut and seed based oils like coconut oil, sesame oil, ground nut oil and mustard oil are the best for consumption. And the oil extracted right from the mill without refining is best for our body.

I had earlier written a post about How to start a Virgin Coconut Oil Business in this blog, as virgin coconut oil is regarded as a super food by the western world today. 
Well, it seems that during this decade all are realising what is good and what is not. Even without any bit of advertising these oils are picking up popularity with real testimonies from people who used it. And reselling such quality cold pressed oils is indeed a business for women who want to make some decent money and network with people. And Whatsapp groups are a boon for such resellers!
That phone call made me sit down and gather all the data to start a cold pressed oil reselling business. I am not planning to get into this immediately, but I have had a conversation with a friend in my apartment who has an oil mill contact and she is looking for a partner to start it.
Anyways, let me share how to start a cold pressed edible oil reseller business, in case you are looking for a decent business option, without digging a hole in your pocket.

How to start a Cold Pressed Edible Oil Reselling business?

The first and foremost thing to do is get in touch with oil mills that make oil in the traditional way. By traditional way I mean the cold pressed way – that is a wooden grind (or ‘marachekku’), or mechanical rotary grinding without heating the oil seeds. Let me explain one by one to make it easy to remember.
  1. Find the manufacturer
It could be there in the villages where raw materials are abundant and labour cost is very low. Talk to them and share your intention to get into reselling with them. With the advent of internet, you can find out many manufacturer contacts online via Alibaba, indiamart etc.
  1. Which cold pressed oil do you want to resell?
This actually depends on which oil is used for cooking by your local contacts. In general, oils in great demand are groundnut oil, coconut oil and sesame oil. But Flaxseed oil, avocado oil, etc. are also picking up. 
  1. Find the pricing
Also get the price for bulk order from them, say for 10L or 20L. Ask for a few samples or buy some 1/2L from them and try it out yourself.
  1. Transportation
Once you know the source, the next step is to get it transported to your business location. Get ideas from them on how to transport the bulk oil orders to your city. Probably they will be supplying to any nearby locality already. In that case, they will be able to deliver when you place the order in advance. Or the worst case, you will have to manage the procurement by yourself.
  1. Look for packaging options
Once you are confident with the quality of oil you can finalise on the individual quantity of oil that you can resell. Say ¼ L, ½ L or 1L. You can go for plastic or glass bottles or pouches for packaging them.  You can speak to the local vendors for these as well as look in to bulk traders selling them online. (Sample one: Stand Up Pouch from IndiaMart) . Once you are established to venture into bigger markets and your turn over is more than 12Lakhs per annum you can go for proper labelling.
  1. Fix your pricing
Now is the time to talk about money. There are three factors to consider while fixing the pricing – buying cost (this includes the cost of oil plus transportation cost), packing cost (includes packing material price, labelling, labour cost etc) and most importantly ‘profit’. If it is a business it has to make profit. Decide on how much profit you want, 10% or 25%.
For example, if 20L oil costs you Rs.2400 and your packaging cost per a litre bottle is coming to Rs.10. In total, your cost per bottle is coming to 130. To make 10% profit on cost you can fix the pricing to Rs.143 per litre (similarly for 25% profit the price per pouch should be Rs.162).
  1. Market your Oils in your circle
To get the first few sales, you can talk to your close family and friends. Just like how Valli did to me, talk about the benefits of using it at your home and recommend it to them. You can also talk to your colleagues, neighbourhood or put up a stall in a food exhibition. Also advertise about your oil in all the social media account including whatsapp groups.
Knowing the benefits of cold pressed oil will help you to speak to your circle of people effectively about the oil.

What makes cold pressed oil so good?

Cold pressed oils are made by pressing the oil seeds just as they are. This means that the goodness of the nuts or seeds are passed on directly to the oil. Their shelf life will be less as no preservatives are added. Since no refining is done, they carry all the qualities of that oil seed or nut.

This means all the essential natural vitamins and nutrients remain in tact in the oil. All natural flavour and aroma are present in these oils. Hence food cooked with these will definitely invoke your taste buds.

Please not that the hot pressed oils are highly aromatic as they have synthetic fragrance. Also, the cold pressed oil will look a bit misty as it is not refined and the suspended particles will be there.

Experience it and share your experience for a heart to heart conversation that could result in a sale. The best thing is that even if the profit margin is not so high, the customers will be buying it often and having regular customers means regular income and hence huge profit over a period of time.

Scaling up your oil business

Once you have a bunch of customers and you are liking the business, you can think of scaling up. Fix up a target or goal for your business, say 1 lakh turn over in first 3 months. Once that milestone is achieved expand your business – for example, if you were into gingely oil reselling alone, you can get into groundnut oil as well now. Talk to nearby grocery shops, restaurants, etc. And keep renewing your goals and targets every quarter, to keep your business growing. And do apply for the FSSAI license if you decide to make it big. 

I always feel that getting into a small scale food business is easiest of all business ideas. The good thing about food business is that the capital is small and easy to start. (Read on my blog post to learn about how to fund your food business from your savings at home)The bad thing about a food business is that it deals with perishable goods, and if business is taking time to pick up you have to look for smart options not to get into loss.

Since oil's shelf life is more than fresh foods, reselling good quality oil is a decent option to venture into your food business. Let me know how is it going. Wish you all the very best for your food venture!