How to find and appoint distributors in Nigeria

Appointing distributors in Nigeria: the tier structure, what the Competition Act lets you put in the agreement, the credit problem, and how to write a first deal.

Selling to whoever comes to your warehouse is not distribution.

That is simply selling stock.

A distribution system means you have chosen who will sell your product, where they will sell it, how they will pay you and what performance you expect from them.

That is how one successful container becomes a repeat business.

For most Nigerian importers, the difficult part is not finding somebody who says:

“Give me the goods, I can sell.”

It is finding somebody who can actually:

pay + move stock + reach retailers + reorder.

How distribution normally works in Nigeria #

A typical consumer-goods chain looks like this:

Importer / brand owner

↓

Distributor

↓

Wholesaler or sub-distributor

↓

Retailer

↓

Customer

Sometimes there are more layers.

Sometimes you sell directly to retailers or supermarkets and remove some of them.

Every extra layer gives you more reach.

It also takes part of the margin.

One Nigerian route-to-market analysis estimates that a product moving through a primary distributor, two sub-distributor levels and a retailer can leave the brand with 30–40% less per unit than a shorter route to retail. (dalatechnologies.com)

That does not mean distributors are bad.

It means their margin must already be inside your pricing.

Nigeria still runs heavily through traditional trade #

Do not build your Nigerian distribution strategy as though everybody shops in a supermarket or buys online.

FieldAssist estimated in January 2026 that traditional and informal channels account for around 90% of Nigerian FMCG retail sales. (fieldassist.com)

Omni's 2026 Nigeria FMCG research found that:

94% of surveyed retailers sourced through open markets

while only:

6% sourced through online platforms.

It also found that 74% considered credit important to their operations. (omniretail.africa)

That tells you two things.

You need people who understand the physical trade.

And sooner or later, somebody will ask you for credit.

Distributor, wholesaler or sales agent? #

Do not use the words interchangeably.

Distributor #

Usually buys substantial stock and resells through an area or network.

A good distributor already has:

warehouse + customers + salespeople + working capital.

Wholesaler #

Buys stock for resale, usually with less obligation to actively build your brand.

You supply.

They sell.

Sales agent #

Finds customers for you and earns a commission.

The stock and much of the credit risk may remain yours.

For a new imported brand, you may use all three at different stages.

You do not need a national distributor on day one #

This is one of the mistakes small importers make.

Somebody says:

“Make me your sole distributor for Nigeria.”

You are excited because it sounds like the business has become serious.

But the person has only sold 20 cartons.

Do not hand over Nigeria because somebody has a warehouse in Lagos.

Start smaller.

You can appoint or test people for:

Lagos

South East

South South

Abuja/North Central

Kano/North West

depending on where your customers are.

Let actual sales performance tell you who deserves more responsibility.

Dangote's distributor model teaches one useful lesson #

You do not have to make distribution complicated.

Dangote Cement's current distributor application asks for basic verifiable business documents including:

• CAC registration
• application letter
• bank reference
• proprietor/MD photograph
• company representative photograph

It also states:

no application deposit

and:

purchase is cash and carry. (dangotecement.com)

Dangote is obviously operating at a completely different scale from a new importer.

But the principle is useful:

verify first, sell on clear terms, reward performance later.

You do not need to promise exclusivity to everybody who signs a distributor form.

What should you ask a Nigerian distributor for? #

Start with identity.

Ask for:

• CAC certificate
• Tax ID where relevant
• valid identification
• business address
• warehouse/shop address
• bank details
• contact details of the person signing

Then verify the business itself.

Visit the location.

Do not appoint somebody based only on photos of cartons on WhatsApp.

Ask to see their existing business #

A good question is:

“What products are you already distributing?”

Then ask:

Which areas do you cover?

How many active customers do you supply?

Do you have sales reps?

Do you deliver yourself?

What size order can you comfortably fund?

How often do customers reorder from you?

You are trying to determine whether the person has an actual distribution network or simply wants discounted goods.

Ask for two supplier references #

This is one of the simplest checks.

Ask the distributor for two brands or suppliers they already buy from.

Then call them.

Ask:

Do they pay when agreed?

How long have you supplied them?

Do they actually move stock?

Would you give them credit?

The answer may save you millions.

Visit the warehouse #

If somebody wants ₦10 million worth of your goods, you should know where those goods are going.

Check:

• location
• storage space
• security
• fire risk
• access for trucks
• stock already inside
• whether the warehouse actually belongs to them

A distributor with no storage plan will turn your stock into somebody else's problem.

Do not give exclusivity just because they ask #

Exclusive territories need care.

Nigeria's Federal Competition and Consumer Protection Act 2018 prohibits agreements whose purpose or likely effect is preventing, restricting or distorting competition.

Section 59 specifically includes the division of markets through allocation of:

customers, suppliers, territories or types of goods or services. (fccpc.gov.ng)

That does not mean every distributor territory is automatically illegal.

It means you should not casually copy a clause saying:

“No other person may sell this product anywhere in Rivers State.”

without considering its competitive effect and getting proper advice where the arrangement is significant.

A territory does not have to mean a monopoly #

There is a cleaner commercial approach.

Instead of saying:

“Nobody else may sell in Port Harcourt.”

you can say:

“You are our appointed distributor responsible for developing Port Harcourt and surrounding markets, subject to agreed performance targets.”

Then define:

• target customers
• sales target
• reporting
• stock level
• marketing support
• review period

That gives the distributor responsibility without blindly handing them a permanent wall around the territory.

For important exclusive arrangements, have a Nigerian competition lawyer review the agreement.

Do not fix your distributor's minimum resale price #

This point is much clearer in the law.

Section 63 of the FCCPA says a contractual term that attempts to establish a minimum resale price is void.

The same section allows a supplier to publish or communicate a recommended resale price. (fccpc.gov.ng)

So there is a big difference between:

Recommended retail price: ₦15,000

and:

You are forbidden from selling below ₦15,000.

Use an RRP.

Do not casually write minimum resale-price clauses into your distributor agreement.

Do not punish a distributor simply for discounting #

The FCCPA also contains rules around withholding supply because a dealer sold below a resale price.

Sections 65 and 66 cover conduct such as refusing supply or offering materially worse terms because a dealer discounted the goods. (fccpc.gov.ng)

So do not try to achieve minimum resale pricing indirectly by saying:

“Anyone selling below ₦15,000 will stop receiving stock.”

Pricing controls require more care than many Nigerian distributor templates suggest.

What about exclusive dealing? #

The law becomes even more important if your business becomes dominant in a particular market.

Section 72 prohibits abuse of a dominant position and specifically addresses exclusionary conduct, including requiring or inducing suppliers or customers not to deal with competitors in certain circumstances. (fccpc.gov.ng)

A new importer with a small market share is unlikely to be in the same position as a dominant national brand.

But the principle remains:

do not make restrictions broader than the business genuinely needs.

The FCCPC's 2026 draft guidance is not yet the law #

FCCPC published proposed Authorisation, Exemption and Guidance Regulations and explanatory material in 2026 for public comment.

The Commission describes them as Exposure Drafts. (fccpc.gov.ng)

So do not quote the draft as if it has already replaced the FCCPA.

What it does show is the regulator's direction of thinking.

Restrictions should have a legitimate efficiency reason and should not be broader than necessary where competition law is engaged.

For an importer, the simple rule is:

keep your distribution restrictions narrow, explainable and performance-based.

The distributor agreement should answer practical questions #

A useful agreement should tell both sides:

Who are the parties?

Use the exact CAC names.

What products are covered?

Do not write simply “all products”.

Where will the distributor operate?

Define the area clearly.

Are they exclusive or non-exclusive?

Do not leave this vague.

What is the buying price?

Include how price changes are communicated.

How is payment made?

Cash before delivery?

Payment on delivery?

Credit?

What performance is expected?

Monthly or quarterly targets.

Who handles delivery?

Your warehouse or theirs?

Who handles damaged/returned goods?

Write it.

How can either side end the agreement?

Include notice period and method.

Those questions matter more than a 25-page agreement full of foreign legal language.

Your termination clause matters #

Do not download a United States distributor agreement and change “California” to “Lagos”.

Your contract should clearly state:

• agreement period
• renewal
• breaches that allow immediate termination
• ordinary termination notice
• where notice must be sent
• what happens to outstanding stock
• what happens to unpaid invoices
• what happens to branded materials after termination

Have a Nigerian lawyer review important agreements.

Especially if you are giving:

exclusivity + credit + major territory rights.

That combination can become expensive to unwind.

Credit is where good distribution businesses get into trouble #

A distributor says:

“Give me ₦10 million stock. I will pay you in 30 days.”

You agree.

Thirty days later:

“Market is slow. Give me another two weeks.”

Then they need more stock because:

“If you stop supply, how will I make the money to pay you?”

Now you are financing their business.

This is how receivables grow.

Even large Nigerian companies are carrying more distributor credit #

BusinessDay reviewed ten large Nigerian consumer companies in Q1 2026 and found combined trade receivables had risen to ₦515.3 billion, from ₦423.4 billion a year earlier.

NASCON alone rose from about:

₦17.8 billion to ₦60.2 billion. (businessday.ng)

Those companies have:

finance departments

lawyers

credit controllers

audited customers

and still have money tied up in debtors.

A small importer should take the warning seriously.

Credit can still be necessary #

The reality is that Nigerian retailers and distributors often need working capital.

Omni's 2026 survey found 74% of retailers considered access to credit important, while only 18% had accessed formal loans. (omniretail.africa)

So saying:

“I will never sell on credit.”

may eventually limit growth.

The answer is not zero credit forever.

It is earned credit.

A safer way to introduce credit #

Start with:

Order 1 — cash

Then:

Order 2 — cash

Then maybe:

Order 3 — small controlled credit

If the distributor pays correctly, increase gradually.

For example:

₦10m normal order

does not mean:

₦10m credit limit.

You might initially approve:

₦2m credit for 14 days.

Watch the payment behaviour.

Then adjust.

Our selling on credit in Nigeria goes deeper into this.

Do not confuse sales with collections #

Suppose your distributor takes:

₦20 million of stock.

That is not yet ₦20 million in your bank.

Track two numbers separately:

sales

and:

cash collected.

A salesperson can boast:

“We moved ₦100 million this quarter.”

while ₦45 million is still sitting with distributors.

That is not the same business result.

Cash collection should be one of your distributor KPIs.

What should a good distributor be measured on? #

Do not measure only how much stock they take from you.

Measure:

Sell-in
How much they buy.

Sell-through
How much actually leaves their warehouse.

Reorder frequency
Do they come back?

Payment discipline
Do they pay on time?

Market coverage
Are they adding real retailers?

Stock level
Are your goods sitting for months?

Returns/damage
Are there problems?

The best distributor is not necessarily the person placing the largest first order.

It is the person who sells and pays consistently.

A better first distributor deal #

Keep it small.

For example:

Product: one product line

Area: one defined market or region

Term: three months initially

Payment: cash for first orders

Target: agreed realistic sales volume

Exclusivity: none initially, or conditional where legally appropriate

Review: after three months

Termination: clear written notice process

Then watch what actually happens.

You can expand later.

It is much easier to give a good distributor better terms than to remove rights from a bad distributor after you have already promised them half of Nigeria.

Reward performance instead of promises #

Once a distributor performs, give them things worth earning:

• better discount
• volume rebate
• limited credit
• priority stock allocation
• marketing support
• early access to new products
• larger territory responsibility

Now the distributor has a reason to keep performing.

Do not give everything on the first order.

If you own the brand, protect it properly #

If the goods carry your own brand, make sure the Nigerian side is in order.

That can include:

trademark protection

and:

NAFDAC registration

where the product falls under NAFDAC.

Distribution does not fix a compliance problem.

If you are building your own label from a Chinese factory, read own-brand goods from China.

Distributor or Lagos wholesaler? #

You do not always need distributors immediately.

If you have just imported your first container, you may choose to sell through established wholesale markets first.

That gives you:

faster cash

and:

less credit exposure.

The downside is that you usually sacrifice some margin and have less control over where the goods end up.

A distributor gives you more structure.

But usually expects better pricing, support and eventually credit.

Our how to sell imported goods in Nigeria compares the options.

The distributor checklist #

Before appointing anybody, check:

BUSINESS

✓ CAC registration?

✓ Real business address?

✓ Warehouse visited?

TRACK RECORD

✓ Existing products?

✓ Supplier references called?

✓ Actual retailer network?

MONEY

✓ Can they fund stock?

✓ Bank reference where appropriate?

✓ First orders cash?

MARKET

✓ Which state/cities?

✓ Which customer types?

✓ How will they deliver?

AGREEMENT

✓ Products defined?

✓ Territory defined?

✓ Payment terms clear?

✓ Targets clear?

✓ Termination clear?

✓ Competition clauses reviewed where needed?

If you cannot answer those questions, you have not appointed a distributor.

You have handed goods to somebody.

The short answer #

Do not start by asking:

“Who wants to distribute my product?”

Start with:

“Who already sells to the customers I need?”

Verify them.

Start small.

Sell for cash first.

Watch whether the stock actually moves.

Then increase the territory, discount or credit as performance earns it.

And do not copy distributor clauses blindly.

Under Nigerian competition law, minimum resale-price terms are void, recommended resale prices are allowed, and territorial/exclusive restrictions need to be structured carefully. (fccpc.gov.ng)

A good distributor can turn one container into a national business.

A bad one can turn the same container into six months of phone calls asking:

“When will you pay me?”

Next, read selling on credit in Nigeria.

Then use how to sell imported goods in Nigeria to decide whether distributors, wholesalers or direct retail makes more sense for your product.

First published 23 Sep 2026. Last checked 23 Sep 2026 by The ChinaBridge desk. Something here out of date? Tell us in the comments and we will fix it.