How to Start Export Business in Nigeria
An export business involves selling goods produced in one country to another country or group of countries. For many countries and individuals, exportation is a sure way to earn foreign exchange. Nigeria is a country filled with vast agricultural products and minerals to mention a few that are in high demand in other countries. Exportation of these abundant resources in Nigeria will therefore result in large profits. This is one of the reasons why exportation is a very lucrative business in Nigeria today. In addition, there is a need for non-oil export alternatives in Nigeria due to the crash in oil prices. Therefore, the market is quite favourable at the moment.
There are several benefits of getting involved in export business. Since the business involves selling products that are readily available in your country to countries where they are scarce or have a higher value, you can generate way more profit compared to selling your product locally. Also, if you intend selling your own product, for example handmade bags, skincare products etc., export business will attract an international market for your product. You also get to compete in a global market
You can decide to start a big or small-scale export business depending on your budget. In this article, I will focus on the small export business. Although, you can also apply this information to large export business.
Who can be involved in the business?
Anyone (provided that you have been licensed to do so) can be involved in exportation business. However, having some of training in the business will be very beneficial. There are several agencies that offer such training. You can look out for these online or in your area.
Location of the business.
The beauty of exportation business is that you can decide to have an office space or work from home instead, depending on your preference or budget. What you do need is an address (preferably your home address) that will be used when registering your business.
Registration of the business.
Registration of this business is a bit complex. It will be helpful if you can get a lawyer to assist you with this. However if you can’t afford it, you can handle it yourself if you’ve got adequate information.
First, you need a unique business name, which should be registered with the Corporate Affairs Commission (CAC), Nigeria. For this step, you need an office address (for those who are working from home, you can use your home address) and you will also need to make some payments.
Once this is done, you should register with the Nigerian Export Promotion Council (NEPC) on www.nepc.gov.ng or you can visit their office. Details of their various office locations can be found on their website. Some of the documents required for registration include a Certificate of Incorporation, Memorandum and Articles of Association and a Current True copy of particulars of Directors of the company (Form CO7). The NEPC then issues a certificate (for a fee), which is renewable every two years. The type of certificate you are issued depends on the product you will be exporting and the destination of the product. Apart from issuing certificates, the NEPC also provides information on the exportation business. You can check out their website for more details.
In addition to registering with the NEPC, you need to complete and register an NXP form with any commercial or merchant bank.
You also need to register and get a licence from your target export country. The procedure depends on the Country in question.
Some other documentation that would be required once the business is running are a proforma invoice; a sales contract agreement and a Certificate of quality, which will be issued by the relevant agent e.g. Federal ministry of Agriculture and shipping documents. You can get more information about this by visiting the Nigeria Customs Service’s website .You might also need to insure your goods in case of damage or loss. It is advisable to do so.
Once the necessary documentation to begin the business have been sorted out, the next step is to source for the products to be exported.
What can you export?- Exportable Goods from Nigeria
There are a number of items you can export ranging from agricultural produce (like cassava, cocoa, coconut, ginger) to furniture to fashion items and the list goes on and on. You can either purchase the items from a manufacturer or produce the items yourself. Typically you need to choose items that can be easily sourced, have a high demand and have a good market value. You also need to consider the costs of producing, packaging and transporting the product in question. Other things you need to consider before deciding on the product to export are the market trends of the product, possible export countries, regulations regarding the product in these export countries, competitors and so on. Once you have carried out your research and decided on the product(s) you want to export, you need to connect with your clients.
How you can connect with the export country.
You can sell directly to an importer in your target country that would in turn sell the products or you can market the products in your target country yourself. Whatever option you decide on, you can connect with the ‘clients’ by participating in international trade fair events in your country. You could also seek assistance from registered agencies that help with such like the NEPC. You can also find potential clients by browsing the Internet or visiting your target export country (if you can afford it). Once you have a potential client in mind, you can schedule meetings with them, send them emails, letters or even give them a call. Basically, you have to introduce your company, the products you are offering, market value of your product and the edge your product has over your competitors.
It is necessary to package your products properly for branding purposes and also for shipping purposes. This is to ensure that the product can withstand the shipping process and be attractive for potential clients. Packaging should meet Customers’ requirements, international standards and regulations.
Mode of shipment.
There are several methods by which your products can reach your target export country; air, road, water, rail. The mode of shipment will depend on the location of your target export country, distance to your export country and your budget.
There are different payment methods that can be used in this business. You can either utilize the cash on delivery option, in which payment for the exported goods are received once the items have reached the client. You can also opt for the cash in advance option, which involves the payment of cash by your client before the goods reach them. There are other options like letters of credits (issued by banks) and the countertrade and barter method. The payment method you choose will depend on what you are most comfortable with and the agreement between yourself and your client(s).
Like in any other business, there are some difficulties that can arise in export business but if other people have successfully overcome these hurdles, so can you! All you need do is focus on the bright side (profits are high!) and be informed. Remember, the quality and branding of your product go a long way in keeping you in the game.
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