The Kenyan retail cooking oil sales using ATMs are growing fast, presenting a good opportunity for business people looking to invest themselves in this profitable market. After the rapid increase in cooking oil prices especially for the bigger sizes like 2, 3, 5 litre bottles, there was an increased for cooking oil retailing in small quantities.
This guide is a summary of how to start a cooking oil ATM business in Kenya, outlining things to consider and how to be successful including expected profits per month.
Personally, I run 3 cooking oil ATM businesses in Kenya in Nairobi, Kiambu and Nakuru counties and most of the information I will share here is based on a personal experience plus research.
How to Start a Cooking Oil ATM Business in Kenya
-
1. Select a Suitable Location
A careful location selection is very important for the success of your cooking oil ATM business. Go for high-traffic areas, such as busy areas especially low and middle income locations, busy marketplaces, densely populated residential area, or close to popular hotels.
Accessibility, enough lighting and signage are other things to prioritize when evaluating potential locations. Ensure people can know from far you have a cooking/salad ATM with a good sign or branding your shop with yellow colour and writing.
This ensures that you can get a steady flow of customers. The best performing cooking oil ATMs are usually located in low income and highly populated areas like ghettos especially where people cannot afford cooking oil in large containers from supermarkets.
-
2. Selecting a Reliable Cooking Oil ATM Machine
Invest in a high-performance, easily maintainable, and quality salad ATM machine. Check out top fabricators like Peupe Technologies renowned for their quality equipment and readily available after-sales support. From experience, they also offer the best salad ATM machine prices in Kenya and that is why I always buy my machines from them.
The cooking oil ATM machine price in Kenya ranges from Ksh. 35,000 to Ksh. 170,000 depending on size from 20 litres to 300 litres. The capacity should align with your projected sales volume to minimize refill frequency to make it easy to do the business.
We can say that the oil ATM business in Kenya cost is price of the salad ATM plus rent and any modifications done to the shop and it can range from Ksh 40,000 to Ksh 200k depending on machine selected and size of shop.
-
3. Buying Quality Cooking Oil
It is highly recommended to go for trustworthy cooking oil suppliers who offer high-quality, market-compliant, and food-grade cooking oil.
Consistency in supply and adherence to safety standards are very important for building customer trust and loyalty. Be very careful on the brands of cooking oil to sell to your customers.
Some brands are not good nor healthy to some even solidifying easily.One of the ‘disadvantages of salad ATM’ is that it does not work well with cooking oil that solidifies easily. However, makers like Peupe Technologies use a heat bulb to melt the oil in case solidifies in cold weather and also use insulating material to prevent the solidification from happening in the first place.
-
4. Implementing Good Marketing
Go for effective marketing tactics to attract customers to your cooking oil vending machine or shop. Use eye-catching signage for visibility to passersby, print out stickers, banners, and brochures to share to nearby houses/apartments.
You can also consider having some promotions or discounts to encourage repeat business. Actively engage with the local community and participate in relevant events to garner wider recognition.
-
5. Prioritizing Excellent Customer Service
Delivering good customer service is essential for customer retention and gain new customers. Serve your customers well address any inquiries or concerns, and prioritize regular machine maintenance to guarantee fresh oil and prevent disruptions. Cultivating a positive customer experience fosters loyalty and encourages repeat business.
-
6. Keep Accurate Financial Records
Transparency and good financial recordkeeping are very important for business growth. Keep and save your daily sales records to know how your business is doing and whether it is growing or declining.
The good thing is that these ATM machines keep cumulative sales records and you can always check and record some where else as backup. This data will help you make decisions regarding expansion and future investments.
-
7. Ensure You Have Business Licenses
While specific licenses might not be mandatory, adhering to all local regulations is very important especially the county business license. Remain informed about any changes in licenses such as the recent Nairobi County combining all licenses to one.
By carefully following these guidelines and incorporating your own entrepreneurial spirit, you can grow a thriving and sustainable cooking oil ATM business in Kenya.
Remember, dedication, perseverance, and a commitment to serving your community are the key ingredients for long-term success in this business.
-
8. Explore Opportunities for Expansion
As your business flourishes, consider expanding to other locations too. Expanding your network of oil vending ATM machines in various locations. You can also do other complementary items like cooking oil containers, cooking utensils which can help you grow further and increase profitability.
Cooking Oil ATM Business Profitability
Cooking oil ATM business is a very profitable venture. Am going to outline below how profitable it is.
The average cost of a 20 litres cooking oil jerrycan (mtungi) is Ksh. 4000 on wholesale. If one sells this cooking oil at Ksh. 280 per litres using a cooking oil ATM, the total amount earned (revenue) is Ksh. 5600. This means that the profit per mtungi is Ksh. 1600.
An average shop with moderate demand can sell 1 jerrycan of 20 litres cooking oil per day, this means the gross profit per month is Ksh. 48000.
To obtain the net profit one can just subtract the cost of electricity (which is about Ksh. 2000) and rent (mostly shared with other shop commodities and thus can be as low as Ksh. 6000).
This mean that the net profit per month is ksh 40,000. This is equal to the cost of a 50 litres cooking oil ATM which means one can break even in one month and recoup the cost they had invested in the machine. This is on average but it can take longer or shorter period to break even.
Closing Remarks
If you have been wondering, that is basically how to start a cooking oil ATM business in Kenya. By following the above steps you are highly likely to have a successful business.
If you have been wondering where to purchase a cooking oil ATM, Peupe Technologies is highly recommended from a personal machine buying experience.
I wish you all the best as you start your cooking oil ATM business in Kenya and enjoy profits from this fast growing sector.
