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  • How to get dealership of cement and steel

    Do you have a plan to start dealership of cement and steel in a rural setup? Searching for advice regarding whether it is worth it and how much to invest in such a dealership? Here, on this page our ISC experts shall provide you with advice to start the dealership.

    I want to know how to start a cement and steel dealership with minimum investment of rural locality. Which brand should be chosen? Which brand stands a better chance of taking dealership of minimum investment in rural locality? How much money should be the investment at initial stage of business and which point of view should be marked as essential?
  • Answers

    4 Answers found.
  • In India Cement industry is very well developed and it is one of the largest producers of cement. The requirement is also as the construction work will be there always.
    There are two types of cement. White and Grey. Grey cement is the cement used for general construction. Some companies give a dealership for both. Some companies will give separately. Generally, white cement delaership will be taken by people who are in the hardware business.
    There are many cement companies in India and to name a few, JK, ACC, Ultratech, Ambuja, Reliance, Shree Ultra and Jaypee Cement. There are many other companies also. You can go for ACC or JK cement. These companies are having good sales. But before going for the specific company you should see the area where you want to start and what are the companies having dealers there. It is not better to go for the same company if already a dealer is doing business there as you are talking about a rural locality,
    First of all, you have to get your Tax Payer Identification Number (TIN). Then you have to decide on the name of the dealership and you have to have other registration as required for starting a business in India.

    Many companies ask for a deposit of money with them. The amount will vary from one lakh of rupees to five lakh rupees. All depends on the policy of the company.

    You should have sufficient place to store the cement bags received. The godown should be well built without any water leakage or any other problem. It is advisable to have about 500 sft area for cement. The shed should be approachable to trucks for loading and unloading of cement bags.

    Once you decide on the company, you can visit their website and get the contact details. As mentioned in their website you can write to them with all the details and if they have given any phone numbers you can talk to them also. Personally going and meeting them may make the work fast. If there are any known sources you can try through them also.

    Based on the requirement and sales you may have to invest up to minimum Rs.10,00.000/-. With this amount, by taking a godown on lease you can start the work.

    I suggest you start with cement and once you have established your business then you can go for steel also.

    always confident

  • I feel steel and cement are the high-end products and there has to be many investments keeping in view the cost of steel and cement. Instead of concentrating to deal with branded steel and cement in a rural setup, try to have a franchise type of sub-dealer connected to a big dealer of your city. Surely there can be a good partnership based on your order and commitment. Once the sub dealership business picks up you will get more exposure, permanent customers and that would create a way for securing bank loans and go for your own dealership in the said area of operations.

    K Mohan
    'Idhuvum Kadandhu Pogum "
    Even this challenging situation would ease

  • Cement and steel are the basic materials for the construction industry. With so many projects coming up and so many housing projects on the anvil there is a continuous demand of these materials. In such a scenario it makes a good business sense to apply for the dealership for these items and sell them in the local market to the prospective buyers for the construction activities. Before applying for dealership for cement the following points are to be considered -

    1. Company or Brand - This is an important consideration. There are many brands available in the market and people have certain preferences for a particular brand. So depending upon the local perception one has to choose a particular brand for applying for agency. Some of the prominent brands are JK, Ambuja, ACC, Ultratech, Bangur, Reliance, Shree Ultra and Jaypee Cement.

    2. Type of cement - There are basically two main types which have a good market and they are - white and grey cement. So, one has to see whether the company is giving one dealership for both or separate for each of them.

    3. Presence of other dealers in the area - One has to select an area preferably where no other dealer is there. Companies will be reluctant to give many dealerships in the same area. So, some market research will be required to ascertain this aspect.

    Once the above things are taken care then one has to acquire an area of at least 500 sq. ft. and also arrange a security deposit which varies from 1-5 lakhs depending upon the company. Based on this one has to apply for dealership to the concerned company.

    Likewise, for steel dealership one has to contact steel companies like Tata Steel, Jindal Steel, SAIL etc and take dealership for the various products like bars, sheets and rods used in the construction industry. The selection of suitable area for the business and marketing of the product in the market are the two main things that are required for a successful model of dealership.

    Knowledge is power.

  • The following parameters have to be looked into prior to taking up dealership of cement.
    1) Location of Bussiness - place- This makes sense while initiating bussiness in respect of cement. One has to investigate the town, localities and cities where there is ongoing building construction activities and more the activities, more will be consumption of materials.
    2) Choosing the branded product - In the cement- segment, there are a number of established brands such as ACC, Ambuja Cement, JK Cement, Reliance, Jaypee, Ultratech etc. You will have to look around the dealerships operating in your chosen areas in the sense with which products they are dealing with. You need to choose a different products if the same product is being used by other dealers. This is momerundum of understanding of the company - policy.
    You may choose Ultra Tech or ACC in case of absence of such dealership.
    3) Make contact with the rap ported contractors - In case, you are having close relations with the contractors, you will be approached to deliver the goods indicating the number of bags to be supplied to the customers.
    4) Registration- This will be the foremost step while taking up dealership. You will have to secure Tax Identification No with the Income - tax authorities.
    5) Rapport with the Bank - You must be sound in terms of financial transactions and in no case, you should be a defaulter while paying EMI or any other instalment taken from the Bank.
    6) Make a buffer stock - This would be essential so that the work of the contractor does not suffer on that account. Shortage of material might tarnish your image.
    7) Investment in your bussiness must be sound - You need to infuse around 10 lakhs of Rupees in you bussiness to take care of hiring a godown, investment securities with the companies and other liabilities.
    In case of taking dealership in steel, more or less same efforts is to be applied by selecting any one of the following companies SAIL, Tata Steel, Electro - steel, JSW etc. You have to negotiate with any one of such companies for securing the dealership.

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