Monday, May 9, 2016

Handling the Critical 5Ps of Export Business Success-Part-1(The Products)

Anyone starting a new business venture will obviously desire success in the new endeavour. However there are peculiar factors that contribute to success of any business in any area of human endeavour. For the non-oil export business, these factors will be described as the 5Ps that are critical to non-oil export business. These factors include Products, Pricing, Purchasers Paperwork and Payment. An export business plan that does not answer the questions around these factors is dead on arrival. So the aim of any export business plan should be to answer the questions the surround these 5 factors as described in this article. This edition of export matters will focus on product while the subsequent edition will address the other factors.

One of the very important factor to be considered as you go into export business is the product. An exporter needs to understand the what, which, where, when, who, why and how of the items being exported. The first question that the exporter needs to answer is, what are the exportable products from Nigeria? This is then followed by the second question, which of these products would I like to export? Then the he needs to now answer the question, where do l source for the product in the country? Another very important question is, when is the best time to source and export the item in the year? Then comes another vital question which is, who are the major buying countries abroad? The exporter also needs to understand this question, why do we have either more or fewer exporter trading in this item in the country? Finally, the last and very vital question is, how can the items be exported without quality issues?

In addressing the first question, what are the exportable products from Nigeria, I will like to divide this into 3 broad groups which include: Agricultural commodities, Solid minerals and Semi-Processed or finished goods. The agricultural commodities include Cocoa beans, raw cashew nuts, sesame seeds, ginger, fruits & vegetables etc. The solid minerals include ores of lead, zinc, copper, manganese, mica etc. The semi processed or finished goods include rubber products like slippers, beverages, soft and alcoholic drinks, processed foods, building materials, ingots of zinc, lead, aluminum etc. For more on these, you can visit the website of the Nigerian export promotion council (NEPC)

Before an exporter decides on which of the products he will like to export, it is very important to know the items on the export prohibition list as stated on the website of the Nigeria Customs Service. These include Maize, Timber (rough or sawn), Raw hides and skin, Scrap Metals, Unprocessed rubber latex and rubber lumps, Artifacts and Antiquities, Wildlife animals classified as endangered species e.g. Crocodile; Elephant, Lizard, Eagle, Monkey, Zebra, Lion and finally all goods imported into Nigeria. The next consideration in the choice of item to be exported is the amount of capital available. Base on this, you can select the different types of product that your capital can carry and then narrow down to the last few items based on purchasers, pricing, product outing challenge etc.

Upon determination of the items to be exported, he can then begin to look for where and how to source for it locally. This can achieved via Internet research, visit to relevant government agencies like NEPC, visits to mines to meet miners, visit to farms to meet farmers, contacting relevant cooperatives, visit to manufacturers and registering as a distributor. In the case of commodities, the exporter also need to decide the model to be adopted in buying, is it going to be buying at the farm gate or at his own warehouse. If at his own warehouse, when will the payment be made? Is it before or after the delivery?

After this comes the question, when is the best time to source for this commodity? This depends on the product. For the solid minerals, the period spanning between the beginning of the dry season (October) to the middle of raining season (June) is most preferred. However for agricultural commodities, it varies from one product to the other and from one part of the country to the other. For example Raw Cashew nuts (February to May), Ginger (November to May), Sesame seeds (November to June), Hibiscus flower (November to February), Shea nuts (June to October). The harvest period, for different Agro commodities, has been put on a chart to enable readers view at a glance in my book titled Export Business Made Easy.  

The next question to be answer is, who are the major buyers abroad? This question is very vital because it lets an exporter confirm there is a market and also assess his risk of going into the available market. For example, most of the hard (solid minerals) and soft (agricultural) commodities from Nigeria go to Asia, while most of the processed and finished goods are exported to Europe and America. For more details on this question, you can do an online research and also visit NEPC to obtain data on the destinations of the products exported from Nigeria.

The second to the last question is, why do we have more or few exporters trading in the item you have selected for export. This question is very important because it helps you to know why some products have more people exporting it than the other. Generally, most products that requires some level of value addition tends to have lesser number of exporters due to the cost and competence involve in processing. On the other hand, items exported in their primary state tend to have more exporters because of the lower cost and competence needed to do the exportation.

The last and most important question is, how can the selected item be exported without quality issues? This question is very vital the inability to answer it will make or mar the whole export transaction. To answer this question, it is important that an exporter know the need to and the possibility of doing quality and quantity inspection through a competent inspection agent before the shipment of the goods. This should be done before the exporter path with cash and pay for the goods either at the farm gate or at the his warehouse. If it is finished goods, then the exporter should ensure that the relevant authorities have approved the quality of the products before shipment.

In conclusion, I will like to say that a critical examination and answering of the questions raised in this article is very critical to the success of any export trade transaction.  

For questions on this thought, you can reach me via email to

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