How To Make Money As Product Sourcing Agents In Nigeria
As product sourcing agents, you can make some good money by plugging into the export processes and procedures. You don’t need to own a product, shop, or office. All you need is to be ready to demonstrate the zeal to succeed in this business.
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This article will teach you what you need to do to make money from sourcing products. Do you know that you can make a lot of money in Nigeria without owning a product, shop, or office? If you want to learn how then here’s a detailed guide on how to make money in Nigeria as a product sourcing agent.
Product sourcing is a near-perfect way to start an exportation business with virtually nothing and still enjoy the luxury of doing it with so much fun. You only need a little financial investment to start this business and you will be offered the privilege and prestige to work with seasoned Nigerian exporters within the country.
What you need to start:
This business does not require you to possess previous experience in the field or a similar field to get started. All you need is a good organizational ability to be able to put things together while paying attention to little details.
Making contacts with exporters
You will need to make contact with the Nigeria exporters as a product sourcing agent. You can register with some trade portals where you will have access to their chosen commodities, specifications, and contact details.
You can also reach out to them via mail indicating your interest in meeting their requirement. Most times your potential clients may require that you submit a product sample to them for their assessment before you go ahead to discuss payment issues and prices.
In this business of product sourcing, you will deal majorly with farmers directly or through local agents. Directly, you will need to go to the farms and deal with the farmers in people, then you will be confronted with the challenge of transporting the commodity to the city. Indirectly, you will have to deal with the local buying agents and the commodity merchants who will have to represent you before the farmers and make the process easier for you.
The Value Chain: How Product Sourcing Agents Make Money In Nigeria
1. Farmers cultivate and harvest the commodities
Nigeria is the most populous African country with 70% of its population employed in the agricultural sector. The country’s soil and weather conditions strongly favor agricultural production.
The population has really taken advantage of these factors as can be seen in the diverse agricultural products of the country and the substantial contribution to GDP and total export revenues.
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The Agricultural sector is being totally transformed by the federal government to enable the country to move from traditional farming to modern agriculture as a business both for small and large-scale farmers.
The objective is to ensure food security whilst also promoting exports in agriculture value chains where we have a comparative advantage. Product sourcing agents make a lot of money through this means.
With the support of the government, a bunch of Nigerian exporters is investing in a large-scale plantation of different agricultural product and making over 900% returns on their investment.
This particular trend has ensured that exporting Agricultural products remain one of the fastest-growing business opportunities in the country. As a small investor in the business, all you need to do is acquire land on lease or outright purchase and start a large-scale plantation on it.
2. Local buying agent (LBA)
Another way product sourcing agents make money is through LBA. The local buying agents are the people who buy commodities from different farmers and pre-process them in preparation for export. Before the market day, they make sure they have enough commodities in stock. The local buying agents (LBA) are divided into two parts thus:
· The Local commodity merchants
· The City-based or large scale merchants
The local commodity merchants are the local agents that operate at the basic local level. For instance, a local buying agent that operates in Jujunku in Taraba state will buy from the farmer and stock his shop with agricultural commodities before the set market day.
The city commodity merchants are those agents based in major cities such as Kaduna, Kano, Lafia, etc. These are the big players in the market and only supply to those who make orders in big quantity. They are the people that the foreigners who come to make purchases in Nigeria, such as the Asians patronize. Their ability is that big that they can make arrangements for containers in few days.
If you have the financial strength to make quantitative orders, it’s advised that you patronize these city agents as they will save you lots of stress and will always deliver your orders at your convenience.
3. Commodity Merchants
These merchants buy products from different local buying agents and farmers to process and sell to the sales agent and exporters. The merchants are usually based in Lagos and are expensive in nature as you will need to make advance payments before they can supply your commodity of choice.
For new entrants into the commodity sourcing business who may not have enough funds to deal with these commodity merchants, it’s advised that you deal with either the farmers or the local buying agents. Product sourcing agents also work as commodity merchants.
4. Commodity sales agent
The commodity sales agents who are also regarded as product sourcing agents buy agricultural commodities from merchants and local buying agents and deliver to exporters’ warehouses. They can act as a point of contact between you and the farmers and local agents, as a product sourcing man.
Some of the commodity sales agents are based in Lagos and will always make the process easy for you as a sourcing agent, with their knowledge of the market terrain. They will always come in handy when you are sourcing agricultural products.
The exporter is the receiver of the products and is in direct dealing with the international markets. Exporters are also part of product sourcing agents. In the export value chain, an exporter can decide to deal with any of the agents or commodity merchants. He or she can also decide to pay in advance for the products or pay when the commodity is delivered to the warehouse.
A lot of Nigerians are operating a highly lucrative export company and they are making a steady income of between
N500, 000 and N10, 000,000 per month regularly; and in their spare time. The profit from the first transaction can be plowed back and an investor will be able to build up his capital base.
The cheapest exportable product is charcoal and the startup capital required is
N650, 000; while the profit return on investment is N150, 000 on a trailer load.
The most interesting thing about the export sector of the Nigerian economy is that opportunities abound as the demand is always usurping the supply. So, if you have the right mix of diplomacy, desire, and determination to venture into this business, the sky is your starting point.
How To Make Money As Product Sourcing Agents For Local Manufacturing Companies
You can work for manufacturers and make money as product sourcing agents. A lot of manufacturers in the country are in constant search of their raw materials. The truth is that these materials abound in certain parts but cannot be assessed by them due to the existing level of information asymmetry.
If you can go the extra mile to discover these products in their abundance, then you can make fortunes by supplying them to these manufacturers. Some of these raw materials in short supply include cassava tuners, cassava flour, Shea butter, Cocoa, maize, Groundnut.
All you need do is discover these products in their abundance, get the LPO of companies that need them, and start supplying them. With time and your level of consistency, you can earn a whole lot from this business.
Export Business Can Still Accommodate More Nigerians as Product sourcing agents
If you wish to become an exporter in the future, it’s a good way to start with product sourcing. The non-oil export business may not be at its peak right now but its potential to grow larger is so high. Permit me to say that it’s a business for the future.
If you can create a niche for yourself in the business now that it’s still at the scratch, you will among the pioneers and leaders when it goes big. I also wish to point out that the market can never be exhausted and will continue to grow and accommodate as many people that show up, so always feel free to jump in.
Most importantly, the export business is a very lucrative one. Once you set up sales, you are rewarded handsomely to that effect. If you have enough capital, working as product sourcing agents is a sure bet for you.