Exportation business in Nigeria is a lucrative one to venture into. This is because Nigeria is blessed with a lot of natural resources of which a lot are needed in foreign countries.
This business is very profitable in Nigeria because money is earned in hard currency (dollars, pounds, euros, yens, etc), which when converted into Nigerian Naira, is a lot.
The economic advantage of this business is why even the government promotes it, and individual entrepreneurs also venture into it.
If you’re looking to be one of the few entrepreneurs that make millions of Naira from the exportation of goods, then keep reading for we’ve got a guide exactly on how to start exportation business in Nigeria.
About Exportation Business
Exportation business involves the movement or sending of goods from one country to another for an exchange of payment.
This business is very lucrative, however, it requires a little bit of high entry financially, and the ability to keep up with the global market demand.
Mainly, suppliers and product manufacturers engage in this business in Nigeria, as it requires some legal licenses including business registration to become an exporter in Nigeria since majorly, raw materials are exported from the country.
As an exporter, your job is to source goods here in Nigeria, look for buyers abroad, and transport the goods overseas in exchange for payment in foreign currencies.
From sourcing goods and exporting to finding customers abroad, all the processes involved in this business requires money upfront, so what is the cost of starting an exportation business in Nigeria?
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How Much is Needed to Start an Exportation Business in Nigeria
Export business mainly involves transacting goods for money, so to start you’ll need some money to source and buy goods, and along the line, you’ll incur some expenses including the shipping fee (depending on the contract), and so on.
All these make this business very costly to start.
The realistic cost of starting an export business in Nigeria is at least 1 million Naira. With this, you can start with the exportation of a few tons of goods.
Keep in mind that this cost is just an estimate, depending on the type of goods (e.g cocoa), you’ll need more. While for goods live charcoal, you may need less.
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How Profitable is Exportation Business
Since the cost of starting an exportation business in Nigeria is a little bit high, the profit margin too should be reasonable, shouldn’t it?
Usually, since money is made in foreign currencies from the business, the profit is calculated the same way, which when converted to naira, “E go get muscle”.
Starting with at least 1 million naira, you should be expecting a profit of up to 700K per trip. That is the profit margin of a successful exportation business in Nigeria is from 25% to 70%.
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How to Start Exportation Business in Nigeria 2023
Now to the main topic! I believe you’ve known the cost of starting this business and the profit margin, if you wish to venture into it, the following is a step-by-step guide on how to start an export business in Nigeria.
1. Start With Market Research
Just like any other business, before you start an export business in Nigeria, you need to do thorough market research.
For exporting business in Nigeria, market research to be done include the best types of goods to export, best countries to export goods to, how to get paid, how to find goods, what is the most secure and profitable way of exporting goods, legal requirements in starting the business, rules, and regulations and so on.
For example, if you’re looking to go into exporting agricultural products such as cassava, cashew, and charcoal, the best place to source goods is in the southwestern and south southern parts of Nigeria.
While the best countries to export to could be India and Vietnam for cashew, Europe for charcoal, and other African countries for cassava.
To get your market research well done, you need to find and create a business rapport with exporters who already have the experience. You can also take some exportation business courses to have more knowledge.
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2. Pick A Business Name
An exportation business is a professional business that requires registration, certificates, licenses, and permits. And for you to get started with all that, a unique business name is required.
Take your time to brainstorm a catchy and business-related name that has not been taken already, then you can proceed.
3. Register Your Business & Obtain Necessary Permits/Certificates
Why you need a business name in the first place is to make your business look professional. In Nigeria, you cannot start an exportation business without getting the necessary permits and licenses including:
— Registering your Business Name or Private Limited Company with the Corporate Affairs Commission (CAC) in Nigeria.
— Business location/office address must be registered in order to engage in the export business in Nigeria.
— Securing an export license from the Nigeria Export Promotion Council.
— Acquiring trade insurance to help protect your business if there is any damage to your goods while they are being stored or shipped by air, land, or sea.
— Obtaining all the legal and necessary foreign documents based on the country. This will enable engage in business in the countries you are exporting goods to.
— Creating a domiciliary bank account for your business as well as a current account is a must, since you’ll be dealing with foreign currencies.
— Tax certificate is also required
4. Source for Customers
After all the registration is successful, you’re 50% done. The next thing is to source for customers abroad.
This is where spending a lot of money begins. Although there are some agencies that can help connect you with buyers for a fee, it is good to start there, but better to source for customers by yourself.
Source customers go hand in hand with sourcing goods. You need to keep both in mind in order to correctly execute this step.
Although there are lots of goods that can be exported, just a few are high in demand, so you need to first source for customers and know the type of goods they want.
Here, you must present a good picture of your brand and let them know you can help source the best products. With that, you should be able to get a few customers for a start.
To find customers, you can run some online advertisements, or reach out to companies abroad that use raw materials. Some of the scopes in finding the best customers include:
- Reaching out to companies via email marketing.
- Use LinkedIn, and Instagram to connect with buyers.
- Connect with local buyers that represent international companies.
- Hire a business representative abroad.
- Register with the export promotion council
- Register on International trade platforms and forums
- Create social media pages for your business
- Create a website for your business
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5. Pick and Source the Products to Export
After sourcing for customers and knowing the goods they want, it is time to go to the market and get those commodities in the quantity that is demanded.
Although buyers’ requests usually determine the type of goods to source, it is also ideal that you go with the best one for you.
This is because some goods are more profitable than others even in the same quantities. For example, Charcoal is a profitable commodity to export, but cocoa is more profitable.
Once you know the products you want, just buy from the producers in bulk and get them ready for exportation.
6. Start Exporting Goods and Making Money
The final step is shipping the product to the intended destination. This also requires some effort, as it can be done by land, air, and/or water. Although in most cases, raw materials are exported by water.
Export Business – FAQs
What is Nigeria’s most profitable export?
Petroleum is the most profitable export commodity in Nigeria.
What can I export from Nigeria to Dubai?
You can export cocoa, coffee, tea, ginger, plastics, spices, and grains from Nigeria to Dubai.
Which product is in demand for export?
The raw products in demand for export in Nigeria include cocoa, charcoal, ginger, cassava, rubber, cashew nuts, snails, and palm oil.
What can I export to China from Nigeria?
You can export cocoa, coffee, tea, spices, salt, lime, and cement from Nigeria to China.
What does Canada import from Nigeria?
The main products exported from Nigeria to Canada include mineral fuel and oil, cocoa, coffee, rubber, and lead.
What can I export from Nigeria to UK?
You can export wool, cocoa, charcoal, oil seed, and grains from Nigeria to the UK.
Despite the requirements of huge startup capital, exportation business in Nigeria still remains one of the most profitable industries in the country that anyone with logistics ideas can venture into.
Whether as a newbie or already have an idea about how importation and exportation work, I believe this post is of greater help for you if you want to start export business in Nigeria.