In Nigeria, the import and export sector is the main force behind growth or recession as the case may be.
The effect of this important sector on rising economies like Nigeria, is often profound, depending on whether there are more imports or exports than the other.
While the industry mainly is private, with brokers helping to facilitate a lot of transactions, the government controls and regulates this sector even as it retains some state-owned goods like crude oil, which can only be exported by the country.
Speaking of a country with high mineral resources and a good number of agricultural products like Nigeria, the tendencies of exportation is quite vast and this is good news for any interested individual who wants to go into the exportation business.
What is this business called import/export?
The import/export industry is a sector concerned with the production and export of goods and services from all countries in the world.
An exporter usually receives a purchase order. After the two parties have satisfied the contractual terms, a deal is signed, in which the importer typically signs a contract for a year with the exporter and is then extended to five years after the first successful delivery of one year.
Facts & Benefits Of The Importer And The Exporter
The following are the main facts and benefits you need to know before you venture into the import or export business in Nigeria:
First, know that the import/export business is capable of building the economy of a country, on the other hand, it is also capable of destroying the economy of any country.
Another fact is that you are required to have a license before you can be a direct exporter.
Note that this business can be capital intensive though it can also be started with $0.
Talking of trust, there’s usually a lot of mistrust issues coming up between importers and exporters.
Lastly, you may be shocked to find out that most of the products you would want to export are already banned by the government.
Business Opportunities In Import And Export
1. Direct Goods Export:
In this kind of export business, a local manufacturing organization could seek patronage in foreign countries and send their products to them.
Truly this requires lots of capital and it entails that you are either manufacturing the goods yourself(which requires a good amount of cash) or you are buying from the available manufacturers of those goods in order to export with your own discretion.
2. Export Management:
Companies involved in export management usually support organizations that have export goods but can not or do not want to learn how to send goods.
The export management company now stands as the counselor to the direct distributor and they deal with the foreign customers by using the company name of the manufacturer and signs agreements on behalf of the supplier.
The supplier would usually pay the Export Management Company monthly for a fixed sum and would also receive a fee for each successful sale.
3. Export Brokers:
This is regarded as the most common, safest, and most efficient export source.
Under this section, you will be working as a broker for the importer or the exporter or even for both.
For example, if you could sign with a supplier a contract to accept $1450 per ton or better of white sesame seed from Nigeria, you could purchase a buyer for $1,550 per ton. if that is valid for white sesame seeds from Nigeria, for example.
The best way to approach the industry is to broker any export transaction as you can export goods through different companies and still build a much greater profit margin than the people you broker on behalf of.
Basic Requirements For Starting The Business Of Import And Export
The following are the basic steps you need to take before starting the business of importing and exporting
- First, register the business under the appropriate bodies
- You can register under NEPC; The Nigerian Export Promotion Council
- Also, register with the Customs authority and make sure you complete the form NXP.
- Meanwhile, you have to obtain special Licenses And Permits
- Concerning the goods you intend to be dealing, confirm that your products are not listed amongst the prohibited products.
- Be well settled with your insurance company
- Lastly, ensure you partner with a freight forwarding service company so that the shipping of your goods will be well sorted.
How To Get Patronage For Your Import/Export Business
To get the attention of reasonable clients for your import and export business, you have to do the following:
- First, get registered with EPC; Export Promotion Councils
- Also, you can seek for local buyers who represent foreign organizations.
- Another way to go about it is for you to fill orders from local buyers who usually export to countries outside Nigeria.
- Make sure you register under International Trade Platforms
- Have a good international website that is always SEO ready
- Engage in Email Marketing
- Contact the chamber of commerce resident in those foreign locations where you intend to export your products
- Ensure you participate in Trade fairs
- Lastly, do a lot of internet marketing
Challenges in The Import/Export Business
- The very first challenge that will easily come to mind is the problem of financing and loans.
- The second problem is volatile exchange rates
Other challenges include:
- Customs and Taxes
- Drought, pests, diseases and other natural factors that affect agriculture products
- Government policies always interrupt long-term contracts
- Acquiring export license and documentation
- High and unstable product pricing
- Cost of Logistics
- Poor product modification to meet international standards
Even though several people assume that export business cost millions of dollars, its advantages are quite much.
It not only helps to create productive businesses that generate high revenues in wide-ranging brokering fees, but it also contributes to Nigeria and every other country.
I’m sure this article has really opened your eyes to know the opportunities involved in the export and import business.