Tiles are essential building materials for both residential, commercial, and renovation projects.
If you’re interested in starting a tile trading business, you can either open a tile shop offering different brands or partner with a single brand as a dealer.
This article provides comprehensive information on starting a tile business in India, including investments, profit margins, tile dealership opportunities, display methods, and more.
The Indian tile market is dominated by ceramic tiles, which account for over 70% of the total market share.
Therefore, a tile shop should offer a full range of ceramic tiles, along with a limited selection of other types of tiles, such as vitrified tiles, porcelain tiles, marble, and granite
Types of tiles business in India
In India, the tiles trading business is operated in two different models namely,
i) Display-based tiles shop
ii) Stock-based tiles shop
If you’re new to the tile business, it’s best to start with a display-based shop. This will allow you to gauge customer demand and build a reputation before you invest heavily in inventory. As your business grows, you can gradually expand your inventory and open a stock-based shop.
Let’s understand these 2 business models and how they work. In the later sections, we will discuss the cost and the profit margin of the tiles business.
1. Display-based tiles business:
This business model requires minimal investment, as you only need a showroom to display tile samples to customers.
You can collect free tile samples from dealers or wholesalers in your region and display them in your shop. When you receive an order, forward it to the wholesaler from whom you collected the samples.
The wholesaler will supply the material as per your request, and you will earn a commission on each order. You can partner with multiple wholesale dealers to offer a wide range of products.
If your shop is located in a prime location with good footfall, the wholesaler is more likely to provide you samples for free. Since you do not own the stock, the risk factor in this model is relatively low.
2. Stock-based tiles business
This business model requires more investment than the display-based tiles business, as you will be purchasing the stock for all the tile varieties you have displayed in the showroom.
When you receive an order, you can supply the materials from your warehouse. For this model, you need a warehouse to keep the stock and a shop/showroom to display the tile samples.
You can purchase the material from the manufacturer or a large tile dealer in your region.
Investment required for Tiles business
- Display-based tile shop: ₹3 to ₹5 lakhs (including shop interior, sample display, furniture, signage, and tile samples)
- Stock-based tile shop: ₹20 to ₹30 lakhs (including inventory, warehouse setup, and showroom setup)
To start a display-based tile shop, you will need to invest around ₹3 to ₹5 lakhs, assuming you already have your own shop. If not, you will need to add the cost of a security deposit to your initial investment.
The shop interior will cost you around ₹1 to ₹2 lakhs. It is important to invest in a good sample display system, especially when you are first starting out. You may also want to invest in additional amenities to improve the customer experience, such as comfortable furniture and signage.
Other costs include shop furniture, signage boards, and tile samples. In the beginning, most established tile dealers may charge you for samples.
For a stock-based tile shop, you will need to invest a minimum of ₹20 to ₹30 lakhs. The major investments are inventory, warehouse setup, and showroom setup. If you invest more in inventory, you will have a wider variety of tiles to offer customers, but you also increase the risk of dead stock.
Profit margin in Tiles business
- Display-based tile shop: Approx. 7% to 10% on sales
- Stock-based tile shop: Approx. 12% to 18% on sales
Display-based tile shops typically have a profit margin of 7% to 10%. This is because you are not directly selling tiles to customers, but rather showcasing samples and connecting them with tile suppliers. This is a lower-risk business model, as you do not need to invest heavily in inventory.
Stock-based tile shops have a higher profit margin of 12% to 18%. This is because you are directly selling tiles to customers, and you can mark up the prices to cover your costs and make a profit. However, this business model is also riskier, as you need to invest in inventory and manage your stock levels carefully.
Choosing a Tiles Dealership
The Indian tile market has many established tile brands. To succeed in this business, it is crucial to choose the right brand for your dealership.
You need to consider these factors before making a decision: the popularity of the brand in your region, make sure that there are distributors in your region, the price range of tiles and the profit margin that the brand offers to its dealers.
Some of the major tile brands in India that offer dealership opportunities include:
- Kajaria Ceramics: Kajaria is one of the leading tile manufacturers in India, offering a wide range of high-quality tiles for both residential and commercial projects.
Read more about Kajaria Dealership.
- H&R Johnson: Established in 1905, H&R Johnson is another leading tile brand in India, with over 100 years of experience in the industry.
Read more about H&R Johnson Dealership.
- Simpolo Tiles: Based in Gujarat, Simpolo is a relatively new tile brand in India, but it has quickly gained a reputation for its high-quality products and affordable prices.
Read more about Simpolo Dealership.
- Somany Ceramics: Somany is one of the oldest and most trusted tile brands in India. Somany tiles are known for their durability, stain resistance, and easy maintenance.
Read more about Somany Dealership.
You do not require any special licenses to start a tile business in India. All you require is a GST certificate and a Shop and Establishment registration from your state government. You can get these certificates from any nearby agencies in your place.
Shop space required
Display-based tiles shop: You do not require a huge shop space to start a display-based tiles shop. You can start this shop with a minimum of 300 square feet of shop space.
Stock-based tiles shop: You require a warehouse to store your tiles stock to start a stock-based tiles shop. So, for this business, in addition to your showroom, you also require a warehouse of at least 1500 square feet of space.
Different display methods in tiles shop
The way you display tile samples in your showroom will have a significant impact on customers. By looking at your display, customers can imagine how their walls will look with a particular type of tile. Here are some of the different methods used to display tiles in a tile showroom:
- Sample boards are the most common display method, where tiles of different designs and colours are arranged on large boards. This allows customers to easily compare and contrast different tiles and see how they would look in their homes.
- Vertical displays are a more modern display method, where tiles are displayed vertically on racks or panels. This method is more space-efficient and allows customers to see a wider variety of tiles at once. This method is also called waterfall display
- The floor display method is used to showcase large or unique tiles. Tiles are laid out on the floor so that customers can walk around and get a better sense of their size, scale, and texture.
- The sliding rack method uses a series of sliding racks to showcase different tile designs and colours. This display method is space-efficient and allows customers to easily view a wide variety of tiles.
- The revolving display method consists of a rotating display rack with multiple shelves, each of which can hold a different type of tile.
- 3D display is the most immersive display method, where tiles are used to create 3D models of kitchens, bathrooms, and other spaces.
We hope this article has resolved many of your doubts about starting a tile business in India. If you found this article helpful, kindly share it with your friends.