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How To Start An Import Export Business In Nigeria

How To Start An Import Export Business In Nigeria

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 others, the effects it has on every economy, including Nigeria’s, is always profound.

Even though the private sector manages the majority of this industry, the government still controls all of the sectors and keeps some state-owned goods, such as crude oil, that can only be exported domestically with the assistance of brokers who handle many of the transactional details.

Exportation is vast, and in a country like Nigeria that’s rich in mineral resources and agricultural products such as zinc, gum Arabic, cocoa, charcoal, sesame, cashew nuts, Cameroon pepper, bitter kola, kola nut, and 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. Once both sides have fulfilled their co-requirements, a deal is inked. Typically, the importer and exporter sign a one-year contract that is later extended to five years following a 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 produce the products yourself, which will cost money, or you may have to outright 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 GDP.

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