Post by Trade Coach on May 19, 2017 13:52:09 GMT 1
CHALLENGES TO EXPECT WHEN STARTING AN EXPORT BUSINESS IN NIGERIA
Whoever told you that starting and running an export business in Nigeria is easy definitely knows little or nothing about the business. As with any other business, the export business in Nigeria has its fair share of challenges. And to succeed as an exporter in Nigeria, you need to know these challenges as well as the strategies for overcoming them.
I will explain some of the commonest challenges that you will most likely face when starting out in the Nigerian export market.
Lack of startup funds
The amount of money you will need to start you export business depends on many factors including the type of products you want to export and your target foreign market. However, even if you’re exporting cheap commodities to countries that are inexpensive to break into, you will still need a decent amount of money as startup capital. Remember, you will need funds for business registration, obtaining licenses and permits, purchasing export commodity, visiting target market (if necessary), and so on.
Difficulty in finding reliable foreign agents
It goes without saying that you will need to sell your products in another country with the aid of a distributor or agent in that country. That is, the distributor or agent will be the link between you and the consumers of your products in that country. Finding agents or distributors that are credible and reliable could be a daunting task. Many new exporters have fallen victim to fraudsters who disguise as agents and distributors. So, you need to really take your time to carefully find out about any agent before working with them.
Unplanned extra costs
Even after you have planned adequately before starting your export business, you will most likely need more funds than you earmarked. This is due to the ever-changing nature of most foreign markets. For example, new importation policies in your target foreign market might require the payment of certain fees, which you never planned as part of your budget. Such extra costs could significantly reduce your profit.
Rejection of products in foreign market
In many countries, there are specific safety standards that must be met by imported products. This means you need to modify your products to meet the standards of your target foreign market. For example, if you import electrical gadgets with a voltage rating of 220V to a country where the standard voltage rating is 110V, you will have your products rejected for obvious reasons. This can lead to huge losses.
When dealing with a foreign market, you will most likely use payment collection methods that are more time-consuming and more complicated than those you will use for a domestic market. Worse, these payment methods are not perfectly secure; as there are chances you could lose your money to fraud. So, you must carefully weigh the financial risk involved before starting an export business.
Lack of enough market information
Your interest in the export business must have been fueled by some information you got about it, no doubt. But chances are that you still need to learn a lot about the business.
You could solve this by getting the right training on export business.