Exportation is sending goods produced in one country to another for sales. The seller of such goods and services is called the exporter while the foreign buyer is an importer. Export of goods often requires the involvement of authorities because it is international trade.
Exportation is of huge significance to the economy of both the importer and the exporter. Exports are important because they offer a country a wider market for their goods. Exports and imports are also crucial because they contribute to the development and growth of national economies.
Not all countries have the resources and skills required to produce certain goods and services, therefore, such countries would need to buy them from another country that produces them in abundance.
Starting an Export Business in Nigeria
Starting an export business is one of the most profitable businesses you can be involved in while in Nigeria. Many have raked in their millions from the exporting business. There are many products and commodities that we have in abundance here in Nigeria, almost to the point where we do not value them.
However, these products are in higher demand and go for a much higher price in other countries. This means huge profit opportunities for those who dare to go into the exportation of such commodities. However, exportation business requires adequate research, knowledge and capital in order to get started.
List of Products and goods you can export from Nigeria
Palm kernel oil
Textiles and garments
Cosmetics and Soap
Wigs and hair attachments.
The export business in Nigeria is highly lucrative but still has its own fair share of challenges. One of the biggest challenges faced by Nigerian exporters or those who are interested in the business face is; lack of knowledge of the rules and regulations that govern the business in Nigeria as well as lack of knowledge of the legal requirements for starting and running the business. This has made many exportation businesses to crumble.
You need to know the legal requirements that you must meet before starting out in the Nigerian export industry. This is to avoid legal problems in the course of your business. Starting your exportation business in Nigeria requires some research and learning. There are things you need to put in place in order to start a successful exportation business. This article provides you with guidelines on how to start your exportation business and grow it to success.
International business is one of the most profitable businesses in Nigeria because exportation exposes you to a whole new larger market. If your business is legit and you follow the rules right, you will become successful in the exportation business.
How to start a exportation business in Nigeria: Steps Involved
Register for an exportation business course in Nigeria
The internet offers you a wealth of information which you will find useful in order to succeed in the exportation business. First is that you need a well-experienced mentor to guide you through the process and help in difficult situations.
Your mentor should be someone that is already doing the business and has recorded huge amount of success. You can also apply for an export business course which can be in any form such as a seminar, video recording tutorial, or a private tutor. It is best you go into the business with fore-knowledge and expertise advice than to venture into the exportation business world unarmed.
Decide on the type of export products you want to export
The next step in starting your exportation business is deciding on what products you want to export. You don’t need to be the one directly producing the product in order to export. You can buy the product from a producer to export.
Source the items locally
The next step is to source for a producer to supply you with the items you want to export
Obtain Trade Insurance and Regulatory Certificates
You need to obtain trade insurance which will help protect you if there is any damage to your goods while they are being stored or shipped by air, land, or sea.
Seek an export agent or forwarder
Ensure you carry the bank along by first opening a domiciliary account, and a current account
Finding a unique Business Name
One of the most important steps you must take when starting out in the exportation business in Nigeria is to register the name of your export business with the Corporate Affairs Commissions. Registering your business means your business has been added to the list of businesses officially recognized by the government. It also ensures that no other business takes and uses your business name for their own business. It is always best you register your business name immediately as you will not be allowed to register a business name that conflicts with that of another company that has earlier been registered.
A minimum of two directors and two shareholders
Another requirement when starting an exportation business as a company (limited or unlimited) is to have a minimum of two directors and two shareholders (maximum of 50) at every time. Note that this does not apply to you if you intend running your export business all alone (as a sole proprietorship) or would be involved with a business partner (partnership).
Have a registered office or an office address
Every export business in Nigeria is required to have a registered office, or at least an ‘office address’. You do not have to necessary have an office structure, but it is important you have an address that you can be traced to. If you are starting your exportation business on a small scale, you can use your home address as an office address. The government is more interested in you having an address for your business.
Registration with the NEXP
The Nigerian Customs Service has mandated that anyone willing to engage in export business must register with the Nigerian Export Promotion Council. This Council was established to enhance and encourage exportation of commodities in order to generate national revenue. Registering your business with the Nigerian Export Promotion Council is not a difficult task. All you need to do is visit the Council’s website (www.nepc.gov.ng) and click the ‘Register here’ link. After which you will be shown the full details of the procedure and requirements.
How to register with NEXP
Register via the e-registration platform of NEPC. You will also be able to access yourself to know if you are export-ready.
NEPC also provides general market information and reports to help an exporter make informed decisions
Other benefits of registering with NEXP
Export trainings and seminars
NEPC also provides specific training programs, seminars and other export support programs for exporters
Matching Nigerian exporters with potential buyers
NEPC also helps to match Nigerian exporters with potential buyers
Advisory and coaching
NEPC offers consultation and advisory services on product development, market information.
Administration of export incentives
NEPC facilitates two export incentives, which are the Export Development Fund and Export Expansion Grant.
Support for women in exports
NEPC focuses on supporting women-owned businesses in Nigeria
Registration of Form NXP
In order to start your exportation business, it is required that you complete and register Form NXP with any authorized dealer of your choice (commercial or merchant bank). This is mandated by the Nigerian Customs Service. The dealer you choose will be in charge of handling your funds and transactions. You will also be required to set up and maintain a domiciliary account with the bank, to which your payments will be deposited.
Special licenses and permits
The next important step in your exportation business is to obtain the required licenses and permits. This is evidence that your business has been approved by the government. You need the services of a business lawyer to know the licenses and permits you must obtain for your exportation business. Your lawyer must be one with deep knowledge of the Nigerian business environment. Failure to obtain the required permits might bring you huge problems and losses in the future.
Licenses from target foreign country
Exportation business means sending products from Nigeria to other countries. All countries in the world require that you must obtain certificates and licenses before you can sell your products to their citizens. It is important you find out the requirements for any country you want to sell your products in. For many countries, your products have to be well inspected before you will be given a license. You will only be permitted to sell your products if they meet the standards set by the government of the target foreign country.
Additional documents needed for exportation business
- Certificate of incorporation (for companies registered as corporations)
- Tax certificates
- Insurance covers
- Verify your products are not on the prohibited goods list
- Get your insurance covered
Source for customers
The soul of the exportation business is having customers. If there are no customers, then the exportation business will crash. You have to be intentional about finding customers. It is important you present a good picture of your brand and products since you will be working with foreign clients. One of your marketing strategies is good adverts and promotions. This might cost you some money but can make you more profit than if you did not do it. You can come up with a website design and promote it on web search platforms, such as Google or social media like Facebook and Instagram. The mode of adverts depends on the products you plan to export.
Ensure your website is multi-functional so that all products will be displayed, along with your contact information and all other necessary information that the client might need. This helps reduce stress on the part of the customer so they can reach you easily. The internet is the best place to get connected with clients and help your business develop. You can also partner with other companies that will supply you with the connections you need.
How to find buyers for your export business
- Use professional apps such as Linkedin
- Register with Export Promotion Councils (EPC)
- Find local buyers who represent foreign companies or 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 Chamber of Commerce for the country you are exporting to
- Participate in trade fairs
- Internet Marketing
Different ways to get involved in Exportation business in 2021
Exportation business is a capital intensive business. There are other ways you can get involved in exportation business at this time.
Direct Goods Export
Companies involved in direct goods export are the ones who manufacture the products locally and then source for international clients whom they export the products to. This form of export is usually capital intensive, as you have to produce them yourself or buy the products out from the producers so you can export them yourself.
Going into the export business as a broker will not cost you as much as direct exportation. As a broker, all you need to do is leverage on a wide network of local suppliers to supplement your goods. This way, you will make more sales and be able to build a successful business. This is the most popular, safest, and effective form of exportation business in Nigeria. You can in fact act as a broker for either an importer or exporter.
For example, if the cost of white Sesame seeds from Nigeria is $1,500 per ton, you could come up with a deal where a supplier accepts $1450 per ton or find a buyer who would make purchases for about $1,550 per ton. This way you make a profit for yourself.
Being an exportation broker is a safe yet profitable way to be involved in the exportation business. One of the other benefits of being an export broker is that you can be involved in exporting different products across various industries, and still generate even more profit margins.