Do you want to know how to start the exportation business in Nigeria? This Article contains Step By Step Guide On How To Start Exportation Business In Nigeria with Exportable Goods.
Nigeria is an unarguably richly endowed country with mineral and agricultural resources that have not been fully harnessed for the benefit of the country and its citizens. These products or resources are spread across every state in the country of Nigeria and present a lucrative opportunity for any brave investor who intends to process them into raw materials or semi-manufactured goods for export business or local consumption.
I, therefore encourage the ambition of selling these products in the export market by following the genuine procedure. As an entrepreneur, I have many opportunities that gave me a versatile knowledge of export business in Nigeria.
Notwithstanding deciding to go into the exportation business is just as important as the kind of business to go into, if not even more important. No one can afford to invest his time, energy and resources on export business yet he sees it not working out. It is quite disheartening.
There is so much information at my disposal as an entrepreneur to show you the different kinds of business you can go into.
Export business is one of such businesses that are lucrative when you are considering the kind of business to go into. One of the great assets of the export business is that it is not limited by a boundary.
It is a type of business that cuts across foreign countries and thus increases your market. So if you are contemplating going into business, you may like to go into exporting.
How To Start Exportation Business In Nigeria
Here Are Step by Step Guide to Starting An Exportation Business in Nigeria
Step #1: Register Your Business Name.
If you have concluded on going into the exportation business, registering the business name is the first thing you should do. It saves you from legal issues when you register for the company name.
Registering a company, in other words, means letting the government know that you’re now a business owner and that your business name is yours.
Moreover, I want you to know that the Corporate Affairs Commission is the official Agency approved by the Company and Allied Matters Act 1990, as stated in section 659 to register businesses in Nigeria. For more details I encourage you to visit the corporate Affairs commission on company registration.
Meanwhile, there are different types of business registration in Nigeria. They include the following;
A: Registration for Private Limited Company (LTD)
B: Public Limited Company (PLC)
C: Company Limited by Guarantee (LTD/GTE)
D: Unlimited Company (ULTD) Incorporated Trustee
The one that is directly connected with small and medium companies in the registration of the business name is Private Limited Company.
Step #2: Look For Products To Export
The exportation business is very lucrative and if well managed can be a successful enterprise. Immediately you register your business name, you are set to start exporting. On the other hand before you do that, you need to take into consideration what exactly you want to export.
If you decide to go into the export business taking a decision is an important stage that you will pass through. It is very easy to decide to go into the export business on the other hand it is more difficult to decide on a particular one to go for.
There are a good number of products one can trade-in but the condition attached to each one differs, therefore it is essential to have an idea of what each requires before one gets involved in it. Or else, it may pose a problem later. The points below will help in getting the products to export. There are so many goods you can export particularly agricultural items. Below is the entire list.
How to take a Decision On What to Export
- Study the trends: Each business has its trend therefore before you dive into the exportation business try to study the business trends to know the latest if it is something people are interested in and are talking about or something that will sell. When you find out what is trending per time it drives business and it helps businessmen to go into business with complete knowledge of the business. This is what people find out when they conduct a market survey. Moreover, in this dispensation the internet is at our disposal and it will help reduce stress to find out what people are saying.
- Acknowledge Your Passion: Your passion for doing something you need to do cannot be overemphasized. For instance, when you have a passion to start exportation business in Nigeria it is your passion that will make you be committed to the business. Even when things are tough your passion keeps you moving without regret. Therefore, you may have to acknowledge something or business you have passion for.
- Check your competitors: It is expedient for you to check your competitor’s because domination in business brings ego, meanwhile, so many competition saps business. You don’t have to trade in a particular product that has many competitors unless you are sure of adding something new to it. However, you have to research your competitors both local and international in other to learn about them and see what you may do differently or how not to copy their mistakes.
- Make research: Check all the products on the other hand study it carefully in other to learn about them. This might take time but it is better to spend time preparing than the time that would be wasted in correcting the mistake made in wrong preparation. Therefore, make a list of all the possible products you could trade-in and carry out thorough research on each so that you can make more knowledgeable decisions.
- Know government/customs policy: As a Nigerian who wants to explore the exportation business it is important for you to know about import and export laws provided by the Nigerian export promotion council and the country you would likely want to trade with. The customs laws on each of those goods may as well help you make a knowledgeable decision on the product that is worth trading in.
- Know your market: You don’t have to know particular buyers and their location. It is important that you find more than one buyer but located in one country at least for a start to see their reaction on the product you want to trade-in.
Step #3: Look for Foreign Buyers of Your Product
You may be wondering In your mind right now how do I look for foreign buyers. You may be asking what is the point of having a product that is not demanded. I will love to encourage you that for your business to survive you need to look for people who would be interested in buying your products. It could be more complicated when you are unable to see the buyers as in the case of local trade. When it comes to international trade, you will have to strategize to get buyers.
- Go online: In this generation the internet has made life easy and accessible than you would have thought. There is no information that one needs that cannot be found on the internet. All you need to do is to consult different search engines available to find people who will be interested in the products that you are selling. You can also go through e-markets such as Amazon, Alibaba, etc to find the people whose business would need the products that you are selling.
- Chamber of Commerce: In Nigeria, we have a chamber of commerce also different countries have their Chamber of Commerce, as well as the bilateral Chamber of Commerce. You can gain a lot of knowledge about trade in these countries by visiting them and luckily, they have websites that you can visit for more information.
- Participate in Trade fairs and Exhibitions: Trade fairs and exhibitions is a medium through which different kind of companies in a particular industry come together to exhibit their products and services. It is well organized for marketing and networking. If you attend some of their exhibitions or seminar, you would have a good idea of particular individuals or companies that would be interested in your product.
- Register with National Export Boards: You must connect with the (Nigerian Export Promotion Council) NEPC which has the responsibility of promoting the enterprise of Nigerian exporters. It will add a great value to your business when you register with NEPC so that they will register you as a Nigerian exporter and refer buyers to you for inquiry. They as well organize trade seminars to create a good buyer-seller relationship.
- Buying agents: Many businesses abroad have buying agents who come into the country to help them buy their products instead of them transacting directly with buyers. However, you can make contact with these buying agents and show what you are selling to them.
- Online Advert: The world has become a global village. therefore from your little corner in Nigeria, you can reach the world with your products. You can run adverts such as Google adverts, Facebook and Instagram adverts to showcase your business to areas and people far beyond your reach.
- Connect with Industry associations: Some industries have great associations that will help you get a list of companies that may be interested in what you are selling. All you need to do is to connect with them and request a list of their companies and for those that have a website, it is will be easier.
- Use social media platforms: Social media has developed and it has gone far beyond a platform just to share pictures and catch up with friends. A lot of businesses are expanding through social media platforms. All of them can serve as a medium to connect with buyers. LinkedIn that was built with professionalism in mind and Facebook, in particular, can help you find what you are looking for. Ensure that right from your profile, what you do is clear.
Step #4: Sourcing for Suppliers of Your Product
Sourcing for the suppliers of your products is very important for your business to succeed. The quality of your product is what will make the buyers keep coming to you also you can only determine the quality of your product by the kind of suppliers you get. You need to take the time to find the right suppliers.
- However, go online and search for the suppliers of whatever product you are looking for. If you have any issues searching on Google. The trick to searching on Google is finding the right keywords, it will help if you use different keywords interchangeably. Moreover, you have to search for directories of manufacturers or adverts to direct your search.
- Speak to Referral: You may as well find suppliers through referral. You can talk to people who are already in the business to tell you who their suppliers are. You can as well ask around your circle, you may be surprised by the information the people around you will feed you with. You can also ask on the social media platforms, in other to get answers.
Step #5: Decide on the Price of Your Product
After you might have put everything in place, the next step is to start selling your product. But before you do that, you need to decide how much you will be selling your product.
- For you to be able to arrive at the right price, you need to take a record of all your products as well as the final shipping to the buyers and make calculations of your goods. Ensure not to leave anything out of all you have spent. For example all the export duties or translation costs if you had to employ a translator. Therefore, do not run at a loss.
- You will have to conduct market research to see what price others are selling, what buyers are willing to pay and as well the rate of demand. Sometimes, the demand may affect your price. A product on high demand will enjoy a higher price than the one that doesn’t have much market demand.
- You may also have to match the prices of other sellers on the market if you have many competitors. This is because if you sell higher than others, your buyers may walk away considering they have many options.
Step #6: Get a handle on Logistics
As a Nigerian who wants to start the exportation business in Nigeria you need to learn how to ship your goods and all other requirements for stress-free transportation of the goods. The exporter is expected to know how to package and label the product very well, document them properly and ensure that there won’t be any damage. Good numbers of exporters In Nigeria employ the services of freight forwarders to take care of all the logistics.
- As a result of poor packing a lot of goods have been lost in transit. However, the major problems are usually moisture because of rain or humidity as well due to poor ventilation, breakage as a result of piling up the goods together or when moving them, weight and theft. Therefore, you need to package the goods very well to avoid all these problems. Get the right materials to package your goods in other to avoid moisture, breakage and so that it can carry whatever weight that could be piled on it. And as well avoid labeling with brand or content name to avoid stealing.
- Even though it is better not to label the products with the brand and content name, it is as well expected to label the goods. The label will be known to be a buyer also in other to make it easy for them to identify the goods. Some of the most important items you need to add label consist of; country of origin (exporter’s country), shipper’s mark, the size of cases also the number of packages (in centimeters and inches), weight marking (in kilograms and pounds), cautionary markings, like this side up or use no hooks (within the language that the country of destination speaks, in English) handling of marks as in international pictorial symbols, the port of entry, as well the labels of hazardous materials and the universal symbols used by the International Maritime Organization.
- The product you are shipping requires some documentation, which is mostly based on the requirements of both countries.
- Commercial invoice: The commercial invoice is a bill for the goods that you purchased from the buyer to the seller, which contains basic information about the transaction, like a description of the goods, the correct address of the shipper and the seller, as well as the delivery and payment terms. The invoice is normally the proof of ownership and to get paid, however, some governments use it to evaluate customs duties.
- Bill of lading: Bills of lading are contracts between the owner of the goods and the carrier (as in case of domestic shipments).
- Consular invoice: Some nations, like Nigeria require a consular invoice, which is used to control and identify goods. The invoice is purchased from the embassy of the country to which the goods are being shipped and is mostly prepared in the language that the country speaks.
- Certificate of origin: Certificate of origin is the certificate that indicates the origin of the product. Most nations require it and it can be obtained from the Chamber of Commerce.
- Inspection certification: Most of the buyers and countries might want a certificate of inspection to know if it is in line with the provisions of the products shipped. Inspection certifications are always carried out by independent testing organizations.
- The warehouse receipt and Dock receipt. Such receipts show accountability when the export item is conveyed by the domestic carrier to the port of origin and left with the foreign carrier for export.
- Destination control statement: This statement shows up on the commercial invoice, ocean or air waybill of lading, and as well the SED to alert the carrier and all the foreign parties that the item might be exported to a specific destination.
- Insurance certificate: The insurance certificate shows the provisions of the insurance.
- Export packing list: The export packing list shows the details of the material in each package, itemize the type of package if it is a box, crate, drum or carton. It as well shows the individual legal, tare, net, and gross weights and measurements for each of the packages. The forwarding agent or maybe the shipper uses the list to dictate the total shipment weight/volume and as well to check if the right cargo is being shipped. Moreover, customs officials might use the list to check out the cargo. The packing list has to be attached to the outside of a package as indicated.
- Shipping: The type of shipping is very important. Before you proceed to ship, you need to ask the buyer where they want the products to be shipped to. Also, you have to consider other factors, such as cost, delivery schedule and availability of the destination to the buyer before considering if to ship through the air or the ocean. However, booking ahead of time is mostly safer.
- Get Your Insurance Covered: As a result of the damage that could come with the goods, it is safe to ensure the product. The local insurance may not cover the foreign shipment. However, the buyer or seller, depending on the conditions of sale, can apply for insurance with the foreign insurance carrier or you can contact the freight forwarders for more details.
Step #7: Obtain special Licences and Permits For Goods that you are Dealing In
If you are starting an export business newly, you must obtain special licenses and permits for goods that you are dealing with. Because, it is easy for you to ignore the need to obtain special licenses and permits.
Getting licenses and permits is easy but if you fail to do so and as well follow the right procedures from the onset is one of the common mistakes the people that are new in export business make.
- Licenses are required for 3 reasons:
- You need to identify your business and ensure you’re accountable for your actions.
- You need to keep records of your finances for tax purposes.
- To protect public health and safety from disease.
Step #8: Register with Customs by Completing Form NXP
The form (NXP) is an obligatory legal report to be completed via all exporters for the shipment of consignment outside Nigeria.
According to Nigerian custom service an exporter is expected to complete and register these Form (NXP) through an Authorized Dealer, Merchant bank or any commercial bank of his or her choice.
The aim of completing the Form NXP is to make sure:
- that goods to be exported outside Nigeria meets the buyer’s expectation hence the goods will be presented for an inspection conducted by appropriate Government agencies.
- The only goods that have to meet the buyer’s order have been shipped – the Nigeria Customs Service on shipment will rightly certify a copy of the form.
- that proceeds (payment) because the exporter is rightly repatriated within 90 days of shipment of goods and wired to his Domestic Account maintained with the Authorized Dealer that proceeds or registered the Form NXP.
Step #9: Check If Your Products are not on the Prohibited Goods List
You can export different kinds of goods outside Nigeria, however, some things aren’t allowed to export and import. No matter where you are exporting them to there is prohibited goods that cannot be exported. Therefore, you need to check if your products are on the prohibited list.
Here is a list of prohibited goods in Nigeria, which includes:
2. Wildlife animals classified as endangered species and their products
3. Timber (rough or sawn)
4. Scrap metals
5. Artifacts and Antiquities
6. Unprocessed rubber latex and rubber lumps
7. Raw hides and skin
8. All goods imported
The following steps above will guide you on how to start exportation business in Nigeria but let us look at another aspect of the exportation business like how profitable the business is in Nigeria
How Profitable is Exportation Business in Nigeria
The exportation business is very lucrative in Nigeria. A good number of people focus on importation without knowing how profitable exportation is. Many people call it “goldmine.” The exportation business expands your market.
Now when you sell locally in the market, you are limited to the customers in your country but the exportation business takes you globally and increases your market. It as well reduces your competitors and also increases the customers that you will have shared with others. So many customers attract more sales and more sales bring more profit for you. Therefore, in every way, you will do much better.
Statistics have it that the exportation business in Nigeria worth over $900 million alone.
Here Is a List of some popular Exportable Goods In Nigeria
1. Shea nut or Shea Butter
2. Rice husk
3. Dried Split Ginger
5. Palm Oil
6. Cassava Flour
8. Zobo Leaves
10. Dried Bitter Leaf
11. Ogbono Seeds
12. Bitter Kola
13. Ugu Leaves
14. Smoke Fish
17. Hibiscus Flower
20. Cashew Nuts
25. Moringa Seed
26. Tiger Nuts
28. Bread Fruit
30. Palm Fruit
32. Edible Local Chalk (Nzu)
33. Kola Nut
Shea Butter Export Business In Nigeria
Shea butter is fat that is gleaned from the nuts of the shea tree. It is solid at hot weather and has an off-white or ivory color. Shea trees are locally found in Nigeria, and maximum shea butter still comes from Nigeria.
Over 100 various types of agricultural products are grown in the country. And profitable as they might appear, one of the most globally demanded agricultural products which are grown in vast volumes in Nigeria is Shea Butter.
Foreign buyers all over the globe are always looking to purchase Shea Butter from Nigeria because of its price, abundance, and quality. Therefore, the high demand for this product in Nigeria by international buyers makes going into the export of Shea Butter from Nigeria to some countries around the world a lucrative export business to venture into.
Food Export Business in Nigeria
I want you to know that the food exportation business in Nigeria is very lucrative because of the high demand for African food abroad. If you know any Nigerian who lives in a foreign country or has been traveling to a foreign country, you will see how they load their luggage with different kinds of foodstuffs because they understand how expensive and scarce it is. Therefore, It is a good business decision to go into this untapped business area.
Here Are The Functions Of The Nigeria Export Commission (NEPC) In Exportation Business in Nigeria
(The Nigerian Export Promotion Council) NEPC is one of the government agencies that are responsible for rendering different services in other to make export trade easy. Nigeria focused on crude oil for many years and did not look at other areas.
NEPC was designed to help entrepreneurs who intend to diversify into exportation. They as well provide lists of products that can be exported. If you want to start an export business you need to visit their website to get the list of goods that may be exported to make your choice. Therefore, if you register with NECP you may access the grants that the government gives in other to help exporters. Also, they might assist you with concrete information on where to get loans for your business.
Also Read: Being Industrious Has Its Rewards
Many are under living their potential and underplaying their roles in life because they are yet to access the requisite knowledge on how to start the export business in Nigeria, but with this guide you have all the necessary information you need to start exporting.
Therefore, starting the exportation business in Nigeria have its challenges but you have seen that it is accessible if you are diligent enough to glean the right information and process it.