What is FMCG business
FMCG business is fast moving consumer goods, consumer packaged foods or low cost quick sell consumer goods.
This type of goods are in high demand and have relatively short shelf life.
Common examples of FCMG’s are livestock products like fish, meat, pork, baked or dairy products. These consumer goods are low cost, sold in large quantities based on turnover and short storage periods.
The FMCG industry is lucrative and one of the largest industries in the world. The fast moving consumer goods is large has good turnover and very competitive. This industry is attractive to huge industrial players like Coca-Cola, Nasko, Guinness, Nestlé.
What Are Three Types of Consumer Goods?
Three types of consumer goods are service, durable and nondurable goods. Durable goods are vehicles, motorcycles, furniture. Most durable consumer goods have shelf life of 3 years.
Service consumer goods fall under things like haircuts, hairdresser, pedicure and manicure. Nondurable consumer goods accounts for two thirds of all fast moving consumer goods. These are items with shelf life less than one year.
Types of consumer goods
How to identify fast moving consumer goods
Which type of good falls into FMCG goods. Common denominator of fast moving consumer goods are non durable products sold at low cost with fast turnover.
The good generally have small margins and the seller needs to sell large quantities to make good profit. FCMG’S account for more than half all consumer goods spending.
How to identify FMCG
- non durable products
- sold at low cost
- fast turnover
- small margins
- sell large quantities
Types of fast moving consumer goods
Fast moving consumer goods are generally perishable goods. Types of FMCG business are sale of dairy products, fresh fruits, vegetables, toiletries, over counter drugs, alcoholic beverages, frozen food.
Types of FMCG
- dairy products
- fresh fruits
- over counter drugs
- alcoholic beverages
- frozen foods
Categories of fast moving consumer goods
FMCG have short lifespan, are consumed rapidly, fast moving and nondurable. Categories of fast moving consumer goods are office supplies, cleaning products, toiletries, and cosmetics. Others are medicine, fresh, frozen or dry food. More are baked goods, beverages, prepared meals and processed foods.
Categories of FMCG
- office supplies
- cleaning products
- fresh food
- frozen food
- dry food
- baked goods
- prepared meals
- processed foods
Challenges facing FMCG
There are many challenges facing fast moving consumer goods industry. This is because of the short lifespan of the products. Challenges include marketing, storage, refrigeration, packaging, customer incentives and logistics.
- customer incentives
Why invest in FMCG business
Why invest in FMCG business?, because it requires moderate start-up capital has fast turnover. It is a reliable source of revenue, low profit, high volume business. The low profit slowly adds up to good earns based on turnover. However an invest has to contend with high stocking, inventory management, low growth, predictable margins, regular dividends and stable returns on investment.
E-commerce and FMCG business
E-commerce business is here to stay and most brick and mortar business have found huge market base online.
Non consumables or durable goods are highest sellers on e-commerce platforms.
We have giants like Alibaba, Amazon, Jumia and others cashing in on the industry. E-commerce FMCG business rely on inventory, logistics, competitive pricing and turnover to profit.
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