If you have ever seen people selling on table tops by roads in most busy cities in Africa, then I’m sure you asked one of many questions that come to mind. How much are these small businesses making? How much are they making to justify risking their lives and health by roads? Do not be mistaken, to believe that they’re risking it all for nothing. The first shock of my life came rather late, when I met a coconut seller in Accra earning more than bankers.
Items Sold
Let’s start by looking at the items that are often sold by these small traders by roads. Often, they are trading activities with no boundaries at all. With as little as GHc400 (about $100), you can commence business. Items sold include food, confectionery, pens and booklets, water and soft drinks, snacks, shoes and shoe polish, small electrical gadgets and appliances, and almost anything their small capital can afford.
Margins
The mark-ups on these small items are enormous. Sometimes, ridiculous. You could be paying about double the cost at which they purchased them, without knowing. This is possible because, often you are in a hurry. Secondly, the next vendor you see at the road-side is likely to offer it at the same price. And thirdly the prices are usually low (often below GHc10) and do not strike consumers to think of getting a cheaper one somewhere else. This seemingly cartel aspect of their pricing allows them to maintain very decent margins.
It’s a Numbers Game
The more you sell, the more money you make. Like any other volume-driven business, these vendors by the roads will do whatever it takes to increase sales. Sometimes, at the peril of their lives.
Read: Meet the Coconut Seller Who Earns More Than a Banker
Is it Worth it?
It’s not up to me to say if it’s worth it or not. But one thing I know is that many of these petty traders by the roads and those in the streets we sometimes refer to as hawkers, are making money. In comparison to the amounts they invest, the returns are huge. A glance at the figures will reveal to you that every 100 units sold could yield about GHc100 in profit daily. This could be lower or higher depending on item sold. And 100 units can easily be sold by a busy road in Accra.