FIP 006: Building a National Distribution Network, with Christie Peacock

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In this episode, Christie talks us through how she built out Sidai with a national distribution network. Christie has been supporting small farmers and livestock keepers in Africa for years, as CEO of Farm Africa for over 10 years, and setting up Sidai as a business over 5 years ago. Sidai gets high quality inputs, services and technical knowledge to farmers across Kenya. They’re achievements have been outstanding in a relatively short period of time, including being able to get any product just landed in Kenya to any corner of the country in under 24 hours. Just phenomenal.

Some of the things we discuss include:

Tips on coming up with a business plan without having much market data, which include falling back on educated guesses from industry experts and making plausible financial projections
The benefits of a national distribution network, which adds so much more value to your business than just reducing the cost of your end product – ie more clout with larger manufacturers and suppliers
How starting with franchising as a business model is a challenge when instead go for building company owned stores
And successful franchising requires a sufficient carrot or stick, and when starting the company it’s hard without either
How selling products is unlikely to be the challenge, but instead, achieving sufficient margins on products to be viable
How creating your own branded products is likely to be key in increasing the margins, but then you have to learn about regulatory approvals and their complex processes.
Recommendation to build out the distribution network rapidly, with a mix of franchise or company owned stores, to enable supplier agreements with big companies early on.
Leverage as much of the existing supplier distribution systems as possible, helps to increase margins.
Focus on getting inventory management IT in place and internal controls as tight as possible, as this could easily eat your margin and waste all other efficiency gains.
Control leakages – pilfering is going to happen so prepare for it, but also the way stock is accounted for in the system, and accounting for currency fluctuations.
Christie’s tips for hiring great staff, including those who show passion about farming and the stories they spontaneously tell in an interview