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PRODUCT SOURCING AGENT
An Ultimate strategy to get into the Nigerian export value supply chain
As a product sourcing agent you can conveniently plug into the export value chain, what a good way to build up a successful exportation business from nothing and have fun doing it? Not only does it require little financial investment to start, but it offers the prestige of working with Nigerian exporters spread all over the Country.
What you need to start: You don't need previous experience in the field, but you should have a good head for organizing and constant attention to little details.
Making contacts with exporters: As product sourcing agents, you will need to make contact with the Nigeria exporters, you can register with some trade portals where you will have access to their chosen commodities, specifications and contacts details, you can send a mail to them and inform them that you can met their requirement, you will need to submit a product sample, and you can then go ahead to discuss the price and the terms of payment
You clients: As a product sourcing agent you will deal with farmers, you will need to go their farms and deal with them directly and you might need to transport the commodity to the city, you can also deal with the local buying agents and the commodity merchant, although, they are very expensive but they make product sourcing very easy.
The value chain:
Farmers: Cultivate and harvest the commodities: Nigeria, one of Africa's most populous countries, has a highly diversified agro-ecological condition, which makes the production of a wide range of agricultural products possible. Agriculture is one of the most potentially viable sectors of the Nigerian economy, particularly in terms of its employment generation potentials as well as its contribution to Nation's Gross Domestic Product (GDP) and export revenue earnings
The Agricultural sector is being totally transformed by the federal government to enable the country 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. A lot of Nigerian exporters are investing in large scale plantation of different agricultural product, making over 900% returns on their investment. As a small investors you can get involved in the export value chain by getting a land lease for a year at N5,000 per hectare or buying the land completely and start large scale agricultural plantation
Local buying agent (LBA): They Purchase commodities from different farmers and pre –process them for export. They make sure they have enough commodity in stuck before the market day The local buying agents (LBA) is divided into two parts we have the local commodity merchant and city or large commodity merchant..The local commodity merchant operate at the local level, for instance a local buying agents that operates in Jujunku in Taraba state will by from the farm and stock his shop with agricultural commodities before the markets day, The city commodity merchant are in Kano, Lafia, Kaduna, they are big players before you can buy from them you must have a big order, some Asians that come to Nigeria do buy from them because the city commodity merchant can arrange for five to ten containers within few days As a product sourcing agent, you can buy from them if you have big orders, especially when you have the financial muscle to buy in large quantity, dealing with them ultimately saves time of the sourcing agents because you will get your commodities at one point
Commodity Merchants: Purchase commodity from different local buying agents and farmers to process and sell to the sales agent and exporters. They are in Lagos and you will need to give them advance payment before they can supply you your chosen commodity. I will advice any new entrants into commodity sourcing to deal with the farmers, or the local buying agents, because commodity merchant are very expensive to deal with.
Commodity sales agent: Purchase the commodity from merchants and local buying agents to deliver to exporters’ warehouse. Some of them are in Lagos.
Need a point man: As a product sourcing agent often times you will need a point man, when you are sourcing for agro products, a point man will make product souring very easy for you they know the terrain and they now how to deal with the agents, they help in quick and effective coordination of your chosen agricultural commodity.
Exporters: They are the receiver of the products, they deal with the international markets In the export value chain an exporter can decide to deal with any of the agents or commodity merchants, he can decides to pay in advance or 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 monthly, regularly, and at their spare time. The profit from the first transaction can be ploughed back and an investor will be able to build up his capital base. The cheapest exportable product is charcoal and the start up capital is N650,000 and the profit on investment is N150,000 per trailer, Nigerians cannot even met the demand coming from the Europeans Countries now. If you have an ability to sell, and an air of diplomacy, the export business might be right for you. All you need is the desire and determination to make it work.
Product sourcing for the local manufacturing company Do you know some local manufacturers looking for ways to increase their market for the goods they produce? You can help them source for their raw material, a lot of Nigerian companies are looking for cassava tuners, cassava flour, Shea butter, Cocoa, maize, Groundnut, you can get their LPO, I discovered that some of them pay on delivery being their regular supply can raise your income level.
Export Business Can Still Accommodate More Nigerians: The non-oil export business is still at its very primitive stage in Nigeria with a very high potential for growth. The market is, thus, inexhaustible (especially for agricultural commodities and other consumables). Therefore, there is space for everyone that will like to earn foreign exchange via the export business. If you are interested in the export business, you can start as a product sourcing agent and increase your skill in the export value chain.
The biggest advantage is the money you'll make. Once you get the business underway, the commission for setting up sales is very profitable. And after you establish and maintain a number of exclusive accounts, you'll find the time you spend is highly rewarded with money.
Tunji Afuwape is small business and SMEs finance expert