Looking to start a business? Trading business is an excellent choice where procurement is the integral component. A beginner in trading can learn through customer and supplier interactions on the job. Moreover, you don't need to start big in trading. Do small trading to use your time well with proper planning and a well-budgeted investment. After all, nearly all big names like Microsoft, Apple, Amazon etc., started as home-based and garage-established projects. This article introduces you to small trading business ideas in India with zero, low investments or modest investments.
Did you know? 2-5% of the business revenue for small trading businesses depends on proper marketing.
What is trading?
A trader normally buys items in bulk from wholesalers or manufacturers at low prices and sells them to consumers or other retailers at the market prices through which profits are acquired.
How to start your trading business?
The essential steps to take before you launch your trade business ideas are:
Research your market segment: Before you start any trading business, it is important to analyse and then decide available options and the best market segment for you. Use your experience and research before making your decision.
Product and Market Research: This area is crucial to success. Research the product, its details, quality, pricing, demand, supply sufficiency etc. Also, create a list of wholesalers, their prices, your competitors and measures of improving the market.
Competitor Analysis: Understanding the trade business strategies of your competitors teaches you to win and appreciate the strategies used by your competitors. It also gives you market insight, supply and demand knowledge, and information on the market’s main points.
Paperwork: You must be up-to-date with your paperwork, licensing, accounting and more. Ensure you have a proper rental agreement, GST registration, a shop or trader registration, etc., to start the small trading business.
Marketing: Trading is meant for profit being the sole purpose. Driving sales through effective marketing strategies, promoting your services, advertising and such are crucial to better the market reach and attain better sales.
Trading business ideas:
Here are some new and high-paying small trading business ideas:
The trading in beer is similar to being a wholesaler and you get to be the business trading middleman between the large brewers and the retailers or customers. Your location needs to be away from schools, and you will need trucking arrangements to transport the beer.
Beer also needs to be stored at an ambient or cool temperature because it is fermented. Foreign beer brands are also available through beer importers with whom you can have a business arrangement.
The concept of dropshipping involves selling online a physical product. The product is manufactured, stocked and shipped by the manufacturer. Whenever a customer buys the product online on your website, your automated software informs the manufacturer and the product is shipped directly from the manufacturer to the customer.
This product trading business idea is not expensive to start and can be a low investment, high commission return opportunity. You could also, in time, grow it to an eCommerce store where you stock and ship it to the customer yourself. Of prime importance here is to identify the best product in terms of returns, through thorough strategy and market research.
Fast-moving consumer goods (FMCG) products:
FMCG products have a limited shelf life and hence sell fast. Items like bread, chocolates, biscuits, detergents, soap are examples of such products. The FMCG is the fourth largest contributor to the economy of India.
To become an FMCG brand distributor, you will need to buy and stock their goods while supplying these to Kirana stores, retailers, small shops, etc. The orders need to be volume-oriented to generate profits. You will need supply arrangements, a warehouse, staff for delivery, logistic and management support, among others for this trading business in India.
Wholesale groceries trading:
These wholesale trading business ideas in grocery items have high-profit margins. You are the middleman who buys the food and grocery items from a manufacturer, stocks them and then sells them directly to customers or other grocery retailers, restaurants, hotels etc.
You will need adequate warehouse space to stock items, appropriate storage bins, a delivery facility, and a freezer/cooler if you wish to stock milk products, cool drinks etc.
Coffee stands second in the global commodities market, just after oil. The UK, Europe and USA import coffee from India and Brazil. In the last five years, the coffee sales demand has increased by 90%. This is the best product for trading business in India. It is profitable and is knowledge-intensive since there are many procedures to be followed in export/ import, and you need excellent contacts with the coffee importers.
A coffee exporter can also sell coffee to large restaurants and food chains with several coffee outlets. A word of caution! Coffee prices are volatile, and supplies are easily affected by weather variations. Though Brazil is the largest exporter of coffee, Indian coffee has its taste, market and demand. Study the chain of international supplies to Europe, the USA, and the UK, the largest importers of Indian coffee, before starting this form of business trading.
If you are scouting for an eco-friendly trading business with a promise that nurtures the environment, a scrap business is a way to go. It is a high returns chance, and opportunities in junk are rated the best trading business ideas in India. This business includes buying used articles, retouching them and selling, using waste for bio-digesters, recovering gold from electronic items, demolition and reusing teams of structures and buildings and more.
For material handling, you must have a warehouse to stock the items, weighing both platform and hanging scales, gas tank, acetylene torch, tools, pulleys, etc. You also need a delivery truck to transport items from and to the destinations of clients. Let the word out among buyers of old, used and recycled items and watch for bulk disposals of scrap items from garages, factories, schools etc. A website and online presence could be of immense help.
You will need to study the fashion trends in the market and zero in on a market niche like kids and infant wear, men’s ethnic outfits, business suits, women’s wedding trousseau, etc. Next, you will have to identify a wholesaler, manufacturer or company to buy stocks from. The business is capital, labour, marketing and storage-intensive.
Your warehouse and marketing location will need to be in a commercial area known as a wholesale clothes market. For example, Surat is known throughout Asia for textiles and apparel. Delhi, Mumbai and Kolkata have several wholesale markets for clothes with thousands of best trading business shops. Choose a trending niche like kid’s wear because the segment is growing fast and the demand never ends!
Trading in soft drinks:
Distributors of soft drink companies make a neat small trading profit. Start as a distribution agency supplying weddings, restaurants, retailers, small shops, etc. This is a cash-and-carry business with a limited shelf life. Festivals, weddings and other celebrations can see high demand for soft drinks. The capital investment can range up to ₹5 lakh for reputed brand distribution licenses. You will need a stocking warehouse, delivery truck, staff, and salespersons in this highly profitable business.
Carpets export is also a very profitable business and among the top trading business ideas in India. The Mughal era made the handicraft sector’s carpet trading very popular and this is among the top small trading business ideas. India produces high-quality handmade carpets and has a 35% piece of the global carpet market. In India, the hubs of carpet production are in Banaras, Jaipur, Agra and more.
You will need an export license, the IEC (Import Export Code) Certificate and must reach out to the manufacturers and buyers of carpets. Also, enrol with the CEPC- Carpet Export Promotion Council which plays a go-between for the manufacturing companies, wholesaler members, and the interested buyers. You will also need facilities for logistics and shipping. It is important to learn the low-down of the carpet industry like carpet quality parameters, knots per square inch, materials used and more.
Wholesale jewellery business:
Jewellery is considered stylish and is a forever trend. You can trade in Silver, Gold, Diamond items or even Artificial Jewellery. Recent trends show that imitation jewellery items have a growing demand because of their lower costs and convenient accessorising than other small trading business ideas.
You will need to study the fashion trends, find the best wholesalers and manufacturers. It does not require too much space and can be started with a low-investment budget. Manufacturing jewellery items is also a great idea where you can sell them to retailers and online directly to customers. However, remember that advertising and marketing are prime concerns to draw the customers.
No matter which business idea you choose, here are some tips to help you convert your ideas.
- Several franchise operation ideas can earn you millions like Apollo Pharmacy, KFC and so on.
- Research every doubt you have and never hesitate to take professional help wherever and whenever needed.
- Use your investments or seek out an angel investor.
- Engage in online courses, or enrol in certified training institutes, to add value to your profile.
Trading can be a very profitable business idea. There are scores of business ideas with an investment range that can stretch from low to high and fetch returns in terms of high/low commissions to mediocre or huge profit margins! Every trader should maintain accounts and mandatorily register with the GST authorities.
Are you aware that Khatabook has a one-stop solution where you can maintain your accounts and generate business reports? The app is mobile-friendly and specially designed for small growing businesses. Save your time, effort and money by switching to Khatabook.