The import/export business plays a key role in the growth of a nation’s economy in any country. Depending on if there are more imports or exports than the other, the effects it has on every economy, including Nigeria’s, is always profound. Here, we’ll be looking at How To Start An Import Export Business In Nigeria.
While this industry is largely run by the private sector, the government regulates all of the industries and still maintains some state-owned products like crude oil to be exported only by the country, with the help of brokers to facilitate a lot of the transactions.
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Exportation is vast, and in a country like Nigeria that’s rich in mineral resources and agricultural products as zinc, gum Arabic, cocoa, charcoal, sesame, cashew nuts, Cameroon pepper, bitter kola, kola nut, shea butter, just to mention a few, venturing into the import/export business is a great gold mine for any entrepreneur in any country around the world to take up.
What Is The Import/Export Business About?
The import/export business is about the importation and exportation of goods and services from every country around the world.
An exporter usually gets a purchase order from an importer. And after all the co-requirements are met by both parties, a deal is signed—where the importer would usually sign a year-long contract with the exporter, which is then adjusted to 5 years after a first successful one-year delivery.
Facts And Benefits Of The Import/Export Business
- It has great potentials to build a country’s economy
- You need to obtain a license to be a direct exporter
- It can be capital intensive
- It can also be started with zero fund
- There’s always a lot of mistrust issues between the importer and the exporter
- Most products you want to import or export are might be banned
Business Opportunities In The Import/Export Business
1). Direct Goods Export:
Companies that manufacture locally could source international clients for their business and export their products to them. This is usually capital intensive, as you have to either be producing the products yourself, which will cost money, or you may have to outrightly purchase from the producers to export with your own margins.
2). Export Management:
Export management companies help organizations who have products for exports but don’t know how to go about it. What the export management company does is to act as a consultant for the direct supplier, communicate with the buyers using the supplier’s company name, and close deals on behalf of the supplier.
The supplier would usually have a fixed amount they pay the Export Management Company monthly, and also a commission they earn on every successful sale.
3). Export Brokers:
This is the most popular, safest, and effective exportation angle to come in from. Here you act as a broker for either the importer or the exporter or both.
If for instance, the cost of white Sesame seeds from Nigeria is $5,000 per ton, you could strike up a deal with a supplier to accept $4,500 per ton or better still, you could source a buyer that would purchase from you for about $5,500 per ton.
Brokering any export transaction is the best way to approach the industry because, you can be exporting different products across various industries, and still generate far more profit margins than the people you’re brokering on their behalf.
Requirements For Starting An Import/Export Business In Nigeria
- Register The Business
- Register With The Nigerian Export Promotion Council (NEPC)
- Register With Customs By Completing The Form NXP
- Obtain Special Licences And Permits For The Goods You’re Dealing In
- Verify Your Products Are Not On The Prohibited/Contract banned Goods List
- Ensure You have Insurance Covered
- Partner With A Freight Forwarding Service Company To Ship Your Goods
How To Find Buyers For Your Import/Export Business
- Leverage on social media platforms especially goggle
- Leverage LinkedIn To The Fullest
- Register With Export Promotion Councils (EPC)
- Find Local Buyers Who Represent Foreign Companies
- Fill Orders From Local Buyers Who Export To Foreign Organizations
- Register On International Trade Platforms
- Have An International SEO-Ready Website
- Do Email Marketing
- Hire Overseas Agents On Commission Basis
- Contact The Countries Chamber of Commerce
- Participate In Trade Fairs
- Get Import Lists From Foreign Embassies
- Internet Marketing
Challenges Of The Import/Export Business
- Problems with financing and loans
- Volatile exchange rates
- Customs and taxes
- Natural factors like drought, pests, and diseases for agricultural products
- Sourcing from reliable suppliers
- High and unstable product pricing
- Logistics costs
- Poor product modification to meet international standards
- Getting export license and documentation
- Government policies always interrupt long-term contracts
Conclusion
Starting an import/export business in Nigeria comes with both its pros and cons. If executed well, the seller could earn a whole lot of money.
While most people believe exportation should cost you millions of dollars, going in as a broker and leveraging on a wide network of local suppliers to supplement the sales of your goods will go a long way in helping you build a successful business that won’t just enable you to generate high revenues in widespread broker commissions but will ensure you contribute positively to Nigeria’s or your own country’s GD
AGRO EXPORTATION BUSINESS: Discover the secrets how to start exporting Bitter Kola, Cashew Nuts, Ginger, Dried Fish, Pepper, and other Agro allied products to USA, UK, Europe, UAE, Canada, etc from the comfort of your Home. To learn more, CLICK HERE