Auto dealership, this is one of the most stressful and time consuming business system in Nigeria. Automobiles could take as long as 1 year to sell but definitely with huge and bulky profits anyways. One of the stress sources in this system comes from the Customs and Immigration systems (depending on where you import from). Most people i know do buy cars from Lome Togo or Cotonou Benin Republic and drive down to Nigeria to sell, the reason being that automobiles are cheaper and more affordable in these places due to their low and relatively affordable duty costs. Yes their duty and clearance costs are very much lower as compared to what we have in the Nigerian system so these dealers take advantage of this to buy from there to resell in Nigeria and guess what they make huge profit.
But then the story has changed and the business has no longer remained as lucrative as it used to be due to to shattering crash of the Naira and practical devaluation of the economy. I was at Lome Port sometime earlier this year with a friend to price a Toyota Corolla 2010 Model, i got the pricing of 5 million Cfa including duty. The car was very clean and new and you can understand its just a 2010 model. As at 2014, 5 million CFA was equivalent to about 1.5 million Naira, but ever since Naira lost its place in the global economy, 5 million CFA is currently about 3.7 Million Naira, you can clearly see the difference. Whereas such cars if bought at the price of per say 2 million Naira including cost of conveyance before were sold in Nigeria between 3 to 4 million Naira, you can imagine the profit on just one car and it even gets more interesting if you’re dealing on order or requests, you just come, deliver, take your cash and off to the next one. The same cannot be said of the business with the current situation of economic affairs in Nigeria.
However, the system still holds out promises to its dealers because once the economic situation reverts to its previous condition or a better one, comfort and viability would be restored so if you desire to invest in autodealership, now is the time to commence your plans, structure and set up. Becoming an autodealership really doesn’t require formal education or academic excellence, nonetheless some basic training is necessary and there are quite a number of ways to go about starting up this enterprise.
One such way is by investing into already existing platforms of such business with known and trusted individuals. Another way is by making ready a shop or site for this activity where you can bring in, keep and display your stock. The third way is by dealing directly with buyers who place orders which you’ll import and deliver to them, this is the swiftest way of all!
So here’s a step by step diplomatic approach of the matter.
1… SAVE UP OR RAISE FUNDING
Autodealership requires money and inarguably, it is one of the businesses that require relatively large funding. Perhaps you may love or prefer to import directly from dealers in Europe or US either for brand new cars or fairly used ones. If you’re planning on this, i’ll suggest about between 15 million Naira to a 100 million. But if you’d love to be inbound, perhaps shuttling between Togo and Cotonou to buy from there and bring down, then you can start with 5 million Naira and your turn could multiply within months.
2… GET A DEALERSHIP LICENSED OR CERTIFICATION
Yes this is necessary to escape you from hassles and harrasment from the Law as well as to authenticate your business and project your genuiness and the lagal standing of your goods to buyers.
3… GET A FEW TRAINING AND UPGRADE YOUR SKILLS
Yes, you’ll need to improve your skills on record keeping, book keeping, credit and sales, account, self-management, self-marketing and customer service experience.
4… HOW WOULD YOU LOVE TO OPERATE?
So would you need aids or are you capable enough to man the company alone? Would you need a cashier, a secretary, a salesrep etc. You’ll need toconsider all these and more.
5… GET READY A BUSINESS MODEL
Every successful business runs on a strong business model, this is a projection of the objectives and goals of your business in writing. Where would you like to be next year? Usually a business model is renewed every year. It doesn’t cost much to prepare one. Contact me for such professional services if you need my help.
6… A SUITABLE LOCATION
A good location is mandatory. Not necessarily in the market or a busy place, best practice is along the express and not too far from a Mechanic Workshop for the sake of maintenance and repairs.
7… GET YOUR BUSINESS REGISTERED
Now, its different getting a license and getting registered. A license means that you are certified and free to operate your business, it saves you from being harrased by legal representatives. Getting your business registered takes on a bigger toll. It is a process of making your business and company Nationally and or Internationally acknowledged. This reflects a sense of professionalism and seriousness, with this you are eligible to pay direct tax anyways but it is very much beneficial and healthy for you!
Written by Ogbaragu Michaels