Repackaging for Profit: How to Break Bulk and Track Every Shilling
Walk into any duka in Kenya and you will see it happening — a shopkeeper scooping sugar from a 50 KG bag into 1 KG packets. Pouring cooking oil from a 20-litre jerrycan into 500ml bottles. Breaking down a bulk purchase into smaller sellable units.
This is repackaging, and most Kenyan retailers do it daily. But very few track it properly. They lose money to spillage they never measure, undercharge because they do not know their true cost per packet, and cannot tell which repackaged products are actually profitable.
This guide shows you how to set up repackaging correctly.
What Is Repackaging?
Repackaging is taking a bulk item and breaking it into smaller units for sale. You start with one product and end up with another:
- 50 KG bag of sugar becomes 48 packets of 1 KG sugar
- 20-litre jerrycan of cooking oil becomes 19 bottles of 1-litre oil
- 25 KG sack of rice becomes 24 packets of 1 KG rice
The key insight: the bulk item and the repackaged item are two separate things in your stockroom. One is loose material in a sack. The other is sealed packets on a shelf. They are different inventory items with different units of measure.
The Two Items You Need
Before you can repackage, you need to set up two inventory items:
The source item — what you buy in bulk:
- Name: Sugar (White)
- Unit of measure: KG
- This is what you receive from the supplier
The target item — what you produce:
- Name: Sugar 1KG Packet
- Unit of measure: Piece
- This is what you sell to customers
These are separate items because they are measured differently. You track sugar in kilograms and packets in pieces. When you repackage, the source stock goes down and the target stock goes up.
Common Repackaging Recipes
Sugar
| Source | Use | Produce | Yield |
|---|---|---|---|
| Sugar (KG) | 25 KG | 24 × Sugar 1KG Packet | 96% |
| Sugar (KG) | 10 KG | 19 × Sugar 500g Packet | 95% |
| Sugar (KG) | 5 KG | 19 × Sugar 250g Packet | 95% |
Where does the missing quantity go? Spillage. When you scoop sugar from a bag into packets, some falls on the floor, some sticks to the scoop, some gets lost during weighing. For dry goods like sugar, expect to lose about 4-5% of your source material.
Cooking Oil
| Source | Use | Produce | Yield |
|---|---|---|---|
| Cooking Oil (Litre) | 20 L | 19 × Oil 1L Bottle | 95% |
| Cooking Oil (Litre) | 10 L | 19 × Oil 500ml Bottle | 95% |
Liquids are slightly worse than dry goods because oil sticks to the inside of the jerrycan and the measuring container. Expect 5-6% loss.
Rice
| Source | Use | Produce | Yield |
|---|---|---|---|
| Rice Pishori (KG) | 25 KG | 24 × Rice 1KG Packet | 96% |
| Rice Pishori (KG) | 25 KG | 12 × Rice 2KG Packet | 96% |
Washing Powder
| Source | Use | Produce | Yield |
|---|---|---|---|
| Washing Powder (KG) | 5 KG | 9 × Powder 500g Sachet | 90% |
Powders lose more than dry goods because fine particles escape during scooping and the powder sticks to every surface. Expect 10-12% loss.
How to Calculate Your True Cost
This is where most retailers make mistakes. They calculate cost per packet using the full source quantity instead of the actual yield. Here is the correct way:
Example: Sugar 1KG Packets
Step 1 — Source cost:
- 25 KG of sugar at KES 130 per KG = KES 3,250
Step 2 — Additional costs:
- 24 plastic packets at KES 5 each = KES 120
- Labels or stickers: KES 48 (KES 2 each)
- Labour: KES 100 (flat rate for the work)
- Total additional: KES 268
Step 3 — Total production cost:
- KES 3,250 + KES 268 = KES 3,518
Step 4 — Cost per packet:
- KES 3,518 divided by 24 packets = KES 146.58 per packet
Not KES 130 (which is just the sugar cost). Not KES 135 (which ignores wastage and labour). The true cost is KES 146.58 because you only got 24 packets from 25 KG of sugar, and you spent money on packaging and labour.
Step 5 — Set your selling price:
- At KES 170 per packet: profit of KES 23.42 (16% margin)
- At KES 180 per packet: profit of KES 33.42 (23% margin)
- At KES 200 per packet: profit of KES 53.42 (36% margin)
Cooking Oil Example
Cooking Oil 500ml Bottles
Source cost:
- 10 litres at KES 200 per litre = KES 2,000
Additional costs:
- 19 bottles at KES 10 each = KES 190
- Caps: included with bottles
- Labour: KES 50
Total production cost:
- KES 2,000 + KES 240 = KES 2,240
Cost per bottle:
- KES 2,240 divided by 19 bottles = KES 117.89 per bottle
Selling at KES 150: profit of KES 32.11 per bottle (27% margin).
Compare this to selling loose oil at KES 250 per litre — the same 10 litres would earn you KES 500 profit selling loose versus KES 610 profit from 19 repackaged bottles. Repackaging earns you 22% more from the same oil.
Yield: Why You Never Get 100%
Every repackaging operation loses some material. The yield percentage tells you how much of your source material ends up in saleable packets.
| Product type | Typical yield | Why less than 100% |
|---|---|---|
| Dry goods (sugar, rice, flour) | 95-97% | Spillage during scooping and weighing |
| Liquids (oil, paraffin) | 94-96% | Residue in container, spillage during pouring |
| Powders (washing powder, spices) | 88-92% | Sticks to containers, fine particles escape |
| Solids (wire, chain, rope) | 96-98% | Offcuts at the ends |
If you have never measured your wastage, start by weighing your source material before and after repackaging. The difference is your actual wastage. You might be surprised — most retailers underestimate their losses.
When Repackaging Makes Sense
Repackaging is not always profitable. It makes sense when:
The margin on repackaged items is higher than selling loose. If customers pay more per unit for the convenience of a pre-packed item, repackaging adds value.
Your customers prefer smaller quantities. Many Kenyan consumers buy in small amounts — KES 50 or KES 100 worth at a time. Pre-packed items in small sizes match how they shop.
You can add branding. A plain packet of sugar looks the same as anyone else's. A branded packet with your shop name creates repeat customers.
Repackaging does NOT make sense when:
- The price difference between loose and packed is too small to cover packaging costs and wastage
- You repackage so slowly that the product quality degrades
- Your yield is too low (more than 15% wastage)
Summary
- Two items — the bulk source and the repackaged target are separate inventory items
- Track yield — you never get 100%, account for the 4-12% lost to spillage
- Include all costs — source material plus packaging plus labour equals your true cost
- Price accordingly — know your cost per packet before setting a selling price
- Measure wastage — if you do not measure it, you cannot improve it
Sokosuite tracks your repackaging from start to finish — source costs, wastage, and target unit costs are calculated automatically. Start your free trial today.