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written by | October 11, 2021

Learn About Starting a Milk Distribution Business in India

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Dary has been a great source of income in India for centuries, and the dairy market in India is not just the largest but also the fastest-growing one in the world. Besides that, in terms of milk and milk products consumption, India stands on number one rank in terms of milk production. Milk is a part of our lifestyle, and this showcases the milk business as one of the most lucrative ones in India.

But on what scale can you start a milk distribution business, and how much profit can a milk supply business bring to you? Is it truly a very lucrative business, and can it be a passive income for you? It's time to reveal everything. Keep reading!

Did you know?

The dairy market of India reached ₹13,174 Billion in 2021, and the number is expected to grow in the coming years.

How to Create a Perfect Milk Distribution Business?

To set up a successful milk distribution company, it is possible to follow the listed points below:

Create Your Plan

A detailed plan should be drawn up for the milk distribution business you are planning to operate. Consider whether you're setting up your milk distribution brick-and-mortar store or accepting orders from customers via websites or apps or Whatsapp/phone calls. 

If an outlet is being planned, consider which is the location it's going to be set, and if online or on-call service is added, what other regions will be covered by the service. These decisions must be taken to attain success in the milk distribution business.

Also Read: How To Start A Dairy Business

Search for a Delivery System for Your Products

In contrast to other systems, consumers prefer milk to be served at a specific time in the morning and in the evening. This is why sticking to this schedule and making sure you have prompt delivery is crucial. Thus, selecting the right delivery method that will enable you to get your products out to your customers at the appropriate time and in the right location should be your top consideration. Also, you should stick to the designated area for delivery. When you don’t stick to this, it impacts the profit margin and ultimately affects the return of investment in your milk business.

Utilise Technology and E-commerce Platforms

Today, everything is on the internet because of technology, and the internet is growing every day. It is, therefore, crucial to ensure that as a company in this modern age, you are also embracing technologies to accept orders from customers. You should know how to establish and use these technologies, and train a few staff members for the same. 

Market Your Dairy Business

So who are the buyers of dairy products in case you want to start your own dairy business? The study of income groups, geographical locations, and whether households are joint/nuclear is vital to find the different types of dairy products that are most suitable to them. Additionally, relevant knowledge about the dairy farm and cows or buffalos will lead you to analyse consumption patterns and demand on the market. The buffalo milk has more fat content than cow milk. Many households across India boil milk despite being pasteurised to get the Malai from the milk. They then make Ghee at home. This is cost-effective and has the added benefit of having homemade Ghee. 

Some families will be more likely to purchase low-fat milk and can afford premium quality cow milk. Additionally, regions in India with more children younger than 10 years old will see a greater demand for desi cow's milk since it is easy to consume. Therefore, be sure to consider these factors in your milk distribution business.

Build Consumer Base

You need to know your primary consumers or which customers you're most focused on as a business. This will enable you to create a list of customers who are likely to buy particular items from your company. Therefore, it is essential that you need to store and list the items you will offer in your business.

Finance the Business

This, too, is the foundation that will assist you in setting up an enterprise by purchasing all the necessary tools to begin the service and acquiring the necessary items or goods. It is essential to know the amount of return that is possible from the business. Also, you should know what's the potential for growth. Keep this in mind when you are making your financial plan.

Select Location, Warehouse, and Storage

Another important aspect is the location of your company and the warehouse or storage facility for the goods. It should be easily accessible to targeted customers and be in a place that will assure the delivery of products promptly. Also, it’s better to look through government loan schemes if you’re short on cash.

Next, you will learn about the animal which will benefit your milk distribution business

Which Animal to Choose for a Milk Distribution Business?

Quality cows are priced at about ₹1500 or ₹2000. Since they are more gentle, you can control them effortlessly. Holstein and Jersey crossings will have good acclimatisation to the Indian climate. The fat percentage in cow's milk is lower than that of Buffaloes. There are some great buffalo breeds in India, such as Mehsana and Murrah. Buffalo milk has higher requirements for butter and oil (Ghee) production.

Most of us drink tea that contains buffalo milk. Buffaloes feed on rough crop residues, thereby cutting down on the cost of feeding. Buffaloes require a cooling facility. 

Considering the Indian climate, dairy farms must have 20 animals, such as 10 buffaloes and ten cows. The more animals you've got on your farm, the bigger milk requirements you'll be able to fulfil. Be sure to keep it in mind while starting a milk selling business.

Also Read: 10 Best Distributorship Opportunities in FMCG You Should Know

Are Dairy Businesses Profitable?

Starting a dairy farm is typically referred to as an all-seasonal opportunity because there is a constant market for dairy products and other milk items in India. It requires between 14 and 18 hours of work per day for the operation to run smoothly. Milk production in India is always at an upswing, with a 3 - 4% rise every year.

The dairy farming industry is growing as a profitable market for business owners with all of these factors. The running of dairy farms is a culmination of effort, valuable resources and an enormous amount of time. With these comes numerous tasks like managing barns and cattle sheds, cleaning up the farm and even the washing and milking of animals. Let's look at how you can begin the milk distribution business.

Conclusion

Buying cattle and starting a milk business is undoubtedly a tremendous business opportunity. It can be a source of passive income for you, and as you increase the number of cattle, your milk yield will also increase. It's a case of reinvestment and expansion that needs to be happening consistently in order to get significant profits. Also, there are many milk distribution opportunities throughout India. It means you won't have to struggle in selling milk. Besides that, you may even enjoy numerous subsidies from the Indian government. To handle your business ideally, it’s better to keep things online.

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 to run the distribution of milk business?

Ans:

The process of dairy milk distributorship is very simple. Once you (or your employees) milk the cows, the dairy is transported to chilled trailers or on-site cooling storage tanks and stored appropriately. Further, trucks are used to transport the milk to the processing facility.

Q: How much does a milk dealership cost?

Ans:

Suppose your shop measures 100-150 sq. ft. Amul dealership will cost you ₹2 lakhs (approx), which in case of a 300sq.ft. Shop, it costs ₹6 lakhs (approx).

Q: How long may a perfect milk shop business plan take to implement?

Ans:

You'll have to write down your business plan first of all. When it comes to figuring out the period of implementing a proper milk shop business plan, you'll have to estimate how long you will consume milk.

  • Arranging a good place
  • Arranging enough funding
  • Buying cattle
  • Completing all sorts of legal documentation
  • Hiring primary staff for milking, cleaning, feeding, etc.
  • Sell milk to either locals, milkmen, or any company. 

If you do everything strategically, the whole setup may not even take one month.

Q: How to start a milk dairy shop?

Ans:

Once you've acquired a rented or own space in a nice location, ₹1.5 lac to ₹6 lakhs will be your initial investment to set up your shop. For type 1 shops, ₹25,000 will be a non-refundable brand security cost, while in the case of type 2 shops, it's ₹55,000 for interiors.

Q: Is the milk selling business profitable?

Ans:

A cow generally gives 15 litres of milk per day, and the revenue you get by selling this milk is nearly ₹900. After deducting additional cattle feed costs, which calculates nearly ₹130/day per cow, you can have ₹770 as your per day profit. Now, you can further calculate according to your milk distribution business plan.

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.