Jimmy Gathu
New Lister
A dealer selling on behalf of a client or importer makes about 30-50k per unit in Nairobi, it may go upto 65k per unit in Mombasa for vehicles above 2 million shillings. A dealer selling for a client/importer in Nairobi makes 30k -45k maximum for units below 2m.
The 30-65k caters for brokers, show room, marketing and utilities, plus profits. At the end, a delaer wiill have about 15-25kk per unit. Freelance brokers without show rooms have reduced expenses.
Importing on behalf of a client from say SBT, you make about 100k after all other expenses.
This means that if a dealer/broker used/diverst 2 million shillings of a client's money, they will have to esnure they get about 20 people trusting them to import vehicles for them. This is not possible within a month or even three months, unless it is a big dealer like RANA, BHAVIN, A-PLUS, MARIDADI , NIPPON and the like. This is because these ones sell in the entire East Africa region, and have their own trusted suppliers in Japan who even give them vehicles on credit, plus, have a very big client base locally.
It becomes complicated if you divert more money from different clients, and in total, you owe clients over 10 millions. It means you have to help import over 200 clients to be able to pay back! This is not possible within 45-90 days which clients are willing to wait for their units to be delivered.
Another thing, the moment word goes out that you can not deliver, and that you have diverted client's money, no one else will trust you with their imports, neither allow you to sell on their behalf!
This also exposes you as just a mere broker, and not a net importer. It means you lack the liquidity needed to import units in your own name or account. You have to rely on client's money to do business!
Simply said, if you divert a client's money, chances of recovering drop from 100% to 50% If you divert money from more than 1 client, your chances of recovering get near to zero. If you divert money from more than 3-4 clients, and the clients go public ,or, you are charged in Court, it is the end. Your recovery is past negative!
The only thing that can save you at that point is disposing off assets, and in this case, not household items but land, real estate or shares. If you have non of the above, wewe kwinished!