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written by | October 11, 2021

Why Should You Start a Battery Business in India?

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Table of Content


A battery business in India is a lucrative venture since batteries are used in various industry verticals and are in constant demand. Big brands like Exide, Luminous, Okaya, and others partner up with small businesses and distribute their products nationwide. Energy storage is booming in India and the battery is an essential item required by businesses to operate efficiently. Batteries can be categorised accordingly as rechargeable and non-rechargeable units. In this article, we will cover the basics such as how to start battery business in India, what documents are needed, how to apply for battery dealership and create a high battery business profit margin in the process.  

Did you know?

The replacement battery market for vehicles and UPS is leading the lead-acid battery market in India.

How to Start Battery Business in India?

Before starting a battery business in India, it is important to do market research and learn about your competitors.  According to a Grand View Research report, the global battery market will reach ₹31080 crores by 2027. Reuters says that more than 80% of lithium-ion battery production worldwide happens in China, and the European Union is also a major contributor to the battery manufacturing segment. Make sure you are familiar with the different types of battery manufacturing before deciding to invest your time in a niche market. 

What your customers are looking for, whether or not the product is in demand, and if your company has the means of producing or distributing in in large volumes - these are all important points to be considered. 

Here are the various aspects you need to take care of:

Legal

Different states have different legal requirements and you should consider all the licenses, permits, and authorisations needed to operate a battery business in your region before starting. You need to make sure your facilities meet legal and quality regulation standards before you begin production. Besides regulatory requirements, aspects such as what equipment is needed, how much workforce, marketing strategy, and company growth plans are to be considered. 
Also Read: An Overview of the Lithium Battery Manufacturers in India

Licences and Registration

You will need a Trade Licence from the municipality and a GST registration number. Business insurance is optional but recommended. Other documents and licenses needed to start the business are:

  • Current bank account
  • State-government approved shop registration and establishment registration documents
  • Business registration (sole proprietorship is adequate)

A local CA or battery dealership agency can help you acquire the necessary documentation. If you seem to lack sufficient funding or capital to launch the business, you can get in touch with a bank or any private financial institution that gives out small business loans. SIDBI is a brand that gives out the best loan offers to battery dealership companies in India.

Plans for a Battery Business

Developing a strong battery business plan will allow companies to sell batteries directly to shops and distribute them. All battery brands work with distributors in different regions throughout the company. If you're operating a multi-brand battery shop, you will find yourself working with various brands. Your business can include local brands in the battery dealership plan and not just international ones.

Branded batteries are preferred by customers since they come with a tag that ascertains their quality and reputation. It's a lot more convenient selling branded batteries since clients trust the products and don't doubt their efficacy.

Used batteries are also in demand and sold at cheaper prices. Keep a few in your store and offer these to customers at reasonable discounts. You can also sell inverter batteries but most customers don't buy them because of trust issues related to their servicing and maintenance.

What Is the Actual Investment Required to Start a Battery Franchise?

The actual investment of your business will depend on the type of brand you're forming a battery distribution partnership with and the products you're stocking up. Below is a rough overview of the costs:

  • ₹1 to 2 lacs - which is to be paid as a security deposit for battery distributorship
  • Battery recharging machines (about ₹15,000 to ₹25,000)
  • ₹25,000 for the shop interior designs and signage
  • Miscellaneous business expenses - ₹20,000
  • A security deposit for starting your shop (varies from location to location) - ₹50,000

Other ongoing expenses will be involved outside this list, such as labour costs, operating costs, shop rent, equipment maintenance, bills and utilities, and additional costs for adding stock to your inventory.

Profit Margins for Battery Sales

Local brands and smaller businesses will give you higher profit margins as they're new to the market and demand more sales. However, the challenge is getting people to buy from them since clients haven't heard of them. If you're planning to sell inverter batteries, you can make a profit margin of up to 35% from all your sales. Two-wheeler and four-wheeler batteries offer between 20% to 30% battery profits from sales and this is a very good amount.

In the beginning, your brand will struggle to make sales and hit targets. But that is normal. Branded companies have a wider audience reach, but their profit margins are lower. If you don't have to deal with time constraints for growing your business, you can try out that route.  

Also Read: Know Cost, Profit & More About Electric Scooter Dealership

How to Get Exide Battery Dealership

Exide is one of India's best lead-acid storage companies and its headquarters are in Calcutta. The company has a dealership program where it partners with sellers and lets them have a stock of their products to pay a security deposit. The eligibility requirements for joining and getting approved for their dealership program are:

  • The applicant has to be over 21 years old and not have any criminal records
  • The minimum space should be 100 to 200 square feet for those owning a battery shop. Businesses running their operations as a godown should have 300 to 500 square feet of space for warehousing.
  • Must furnish personal ID documents such as proof of address, Aadhar and PAN card, 
  • A cancelled chequebook page from your current bank account
  • Shop agreement, sale deed, and rental agreement
  • NOC, GST number,  outlet trade license, and other financial documents

Conclusion

Now that you're aware of how to start a battery business in India, you can start working on your company. Partnering with a dealership or distributor is a good business move since it can be difficult to manufacture products from scratch and market them. As your company grows, you can invent your products and introduce new lineups. The type of clients you get is also important and working on your social media marketing strategy can pay off since many companies are choosing to build their digital presence. 

Follow Khatabook for the latest updates, news blogs, and articles related to micro, small and medium businesses (MSMEs), business tips, income tax, GST, salary, and accounting.

FAQs

Q: How much space and equipment do I need to start a battery shop?

Ans:

You will need about 150 square feet of shop area to launch a battery business. In terms of equipment, you will need storage space to keep batteries, power backups, a battery recharging machine, and hydrometers. A  clamp metre will also be needed to test your battery voltage readings and analyse their performance.

Q: Why do customers prefer to buy Luminous batteries?

Ans:

Luminous batters are solar-powered and they are India's leading manufacturer of batteries and inverter power backups. Their solar batteries come with long-lasting power backup and feature up to 3 years of warranty. The two most popular products in their solar portfolio are the L Series and H Series solar batteries.

Q: Which are the top battery companies that provide India's best supply chain services?

Ans:

Currently, the top 3 companies in India well-known for their supply chain services are Exide, Amaron, and Luminous Power Technologies.

Q: What are the profits like for the Amaron battery dealership?

Ans:

The profit margin for the Amaron battery dealership is 20% to 30%. You can expect to make good profits from the total sales since the margin is directly proportional and there are no hidden charges or deductions.

Q: How do I apply for the Exide Battery dealership?

Ans:

You need to contact a territory sales officer to learn more details about the Exide battery dealership. You can also submit a query application form on the official company website to get a call back from an Exide Battery executive within 24 hours.

Q: What amount of profits can I expect to make from my battery franchise?

Ans:

Your profit margins will depend mostly on the total number of sales you make. You can also reap the benefits of company bonus schemes once you meet their eligibility requirements and succeed in hitting sales targets. These will vary from dealership to dealership and you can take advantage of attractive offers.

Q: What are the best websites to sell batteries online?

Ans:

You can sell your batteries on Amazon, eBay, Etsy, and Flipkart. It is recommended to launch your website too and have a social media page where your customers can contact you. Create options for online ordering and nationwide shipping to make the distribution process smoother and work with your partners on this.

Disclaimer :
The information, product and services provided on this website are provided on an “as is” and “as available” basis without any warranty or representation, express or implied. Khatabook Blogs are meant purely for educational discussion of financial products and services. Khatabook does not make a guarantee that the service will meet your requirements, or that it will be uninterrupted, timely and secure, and that errors, if any, will be corrected. The material and information contained herein is for general information purposes only. Consult a professional before relying on the information to make any legal, financial or business decisions. Use this information strictly at your own risk. Khatabook will not be liable for any false, inaccurate or incomplete information present on the website. Although every effort is made to ensure that the information contained in this website is updated, relevant and accurate, Khatabook makes no guarantees about the completeness, reliability, accuracy, suitability or availability with respect to the website or the information, product, services or related graphics contained on the website for any purpose. Khatabook will not be liable for the website being temporarily unavailable, due to any technical issues or otherwise, beyond its control and for any loss or damage suffered as a result of the use of or access to, or inability to use or access to this website whatsoever.
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Disclaimer :
The information, product and services provided on this website are provided on an “as is” and “as available” basis without any warranty or representation, express or implied. Khatabook Blogs are meant purely for educational discussion of financial products and services. Khatabook does not make a guarantee that the service will meet your requirements, or that it will be uninterrupted, timely and secure, and that errors, if any, will be corrected. The material and information contained herein is for general information purposes only. Consult a professional before relying on the information to make any legal, financial or business decisions. Use this information strictly at your own risk. Khatabook will not be liable for any false, inaccurate or incomplete information present on the website. Although every effort is made to ensure that the information contained in this website is updated, relevant and accurate, Khatabook makes no guarantees about the completeness, reliability, accuracy, suitability or availability with respect to the website or the information, product, services or related graphics contained on the website for any purpose. Khatabook will not be liable for the website being temporarily unavailable, due to any technical issues or otherwise, beyond its control and for any loss or damage suffered as a result of the use of or access to, or inability to use or access to this website whatsoever.