There are two way to start your business in kirana field. First one is you can start a retail store while secondly you can start wholesale business.
In retail business, generally you will sell to end customers while in wholesale you will sale the product to retail shop owners.
In retail business, the profit margin will be as low as 2% and can go as high as 50-80% depending on the product segment. Profit margin ration is listed in the table below. While wholesale business is very competitive market where margin will vary from 3-7% only.
Margin : Wholesale Business vs Retail Business?
Wholesale business is where you have to sell products in bulk. Since you are selling to the small store owners where they will be buying any where from 10,000 rs to 2 lakhs every day or even higher. Since your products will be sold very quickly so margin is less but profit is very big as 5% of few lakhs is equal to many thousands which is every day profit.
But this is not the case of retail business. Since retail business is about selling products to customers, so the margin is higher there but again if you are not getting enough customers you will make less profit each day.
Profit Margin in Retail Kirana Shop Business
| Milk | 2-4% (Based on brands) |
| Bread | 10-15% |
| Biscuit/Namkeen | 10-20% |
| Soap/Shampoo/Detergents | 8-12% |
| Perfume/Deodrants | 15-40% |
| Spices(Masala) | 10-30% |
| Tea | 9-12% |
| Cosmetics | 9-20% |
| Rice, Daal etc | 5-20% |
| Cold Drink, Juice | 10-20% |
How much money is needed if I want to start a kirana business and how much for wholesale business? Can I get bank loan to start the business?
It depends on the area of your shop. You can start from as low as Rupee 50,000 if you are going to open a kirana shop. There is no upper limit. For the modern shop of area let’s say 1000 sqft. minimum investment will be around 10 Lakhs including stocks, rack, decoration, electric appliances, fridge etc