Gold is one of those few luxury items that have not gone out of fashion over the years. Gold speaks of wealth and status. It also used to be one of the former legal tenders and has thus maintained its value, irrespective of economic situations such as a recession or currency devaluations and the rise of precious metals.
People buy gold as a means of retaining the value of their money. One can also resell gold at an even greater price when you need money.
Buying and selling gold is a lucrative business with great profits. One could start right from the comfort of one’s home if one understands the basics of the business.
This article provides guidelines and tips on how to start a gold business in Nigeria.
Read on below:
Different ways to get into the gold business
There are different ways through which you can be involved in the gold business. These are:
Direct ownership: You can buy and own gold by storing them. This serves as a means of holding value in an asset.
Investing in gold mutual funds: Gold mutual funds are those that invest predominantly in gold bullion or gold-producing companies. Since the gold business is a lucrative one, there is a high return on investment
Flipping gold: This is when you buy gold when the price drops so you can resell for profit when the price rises.
Opening a reseller shop: As a reseller, you can buy second hand used gold jewellery from people and then resell
Gold mining and sale of raw gold
Opening a goldsmith centre: At a goldsmith, you can provide services such as gold casting, molding, purification, customization of gold products such as bracelets, etc.
Steps to take before starting a gold business in Nigeria
Obtain Knowledge and Experience
Trading in gold requires that you have good expertise, knowledge, and experience. You need to have a good eye for jewellery, so you can be able to differentiate the real ones from the fakes. One also needs to know the latest prices and trends in the gold business. In order to thrive in the gold business, one must also have strong negotiation and sales skills.
Research on the Best Type of Gold to Invest in
Before starting out on your gold business, ensure you take time to carry out an extensive market survey and feasibility studies on the different types of gold you can use in business, where you to source for the market and the types you can invest in.
Get Experience In Gold Value Assessment
Gold comes in different alloyed forms and weights. You must be able to evaluate how much gold is contained in a product. You must also be able to know its weight in grams or kilograms.
Look for Reliable Sources to buy Gold
Ensure you find a reliable supplier who will give you gold at a price that will guarantee you get your profit when you resell and a high return on investment. Your gold supplier must also be one to deliver on time. There are fake gold sellers so ensure you are not deceived by talk of gold that is cheap, gold is never cheap.
Gold Business Promotion
Advertisement is the soul of any business. Find advert means that are suitable to your target market. This could be via print media, TV, radio or online via social media platforms or a website. It all depends on the best means to reach a wider range of your target market and what you can afford. There are several online platforms are available for affordable advertisement.
Monitor Trends In Gold Investment
The demand, supply, market price and use of gold fluctuates, hence, you must monitor these changes and make wise and smart decisions to influence your business. For example, the taste and demand for jewellery vary at different times of the year such as during festive seasons, etc.
Buy Equipment for Gold Business
It is always wise to get your own equipment and tools to be used in this business. Some of these equipments include those used in gold smelting, molding, weighing, testing, etc.
Equipments needed to start a gold business in Nigeria
- A shop, in case you do not want to operate online
- A metal or wooden showcase to display your gold jewellery
- A measuring scale for weighing gold
- A gold testing kit to differentiate fake from real
- Security doors. This will help prevent cases of theft.
Situating your gold business in the right place is also essential to its success. Major cities where you can start your gold business include Abuja, Lagos and Kano. While you can start a gold business in many other cities, what is essential is that you locate it where demand is reasonably high and not in remote areas where the standard of living is low.
Registration and Licensing
It is important that you register and document your business name with the Corporate Affairs Commission. Make sure you also join the gold dealers association in your state.
Secure Your Gold Business
The gold business is capital intensive and deals with huge amounts of money. This usually attracts stealing and pilfering. It is wise to maintain tight security around your gold business premises.
- Make use of security guards
- Install security and safe doors, electric fencing, CCTV cameras
Capital needed to get started in a gold business
The essential items that you need capital for in the gold business include buying a good gold scale and gold testing kit. This may cost you around 10,000 Naira. You will also spend money on advertising the business. Finally, you will need money to purchase your first few pieces of gold. This may cost you about $500 – $5000. It all depends on how much gold you want to start with.
How to obtain a Gold Mining License (Lease) in Nigeria
If you are considering obtaining a license for mining in Nigeria, you can purchase an already existing gold mining property from the original owner. After which you can apply for a business license from the Ministry of Solid Minerals Development.