How to Start Fairly Used Cars Business in Nigeria.
More than fifty percent of the cars bought by Nigerians are fairly used. This includes cars that were imported from abroad. In fact, the definition of “new cars” in Nigeria now includes “tokunbo” (fairly used cars from abroad) cars. There is a very large population of cars in Nigeria, as it is the commonest and the major means of transportation.
Where there is the highest population of cars in Nigeria are in Lagos and Abuja. Here, the roads are always busy. Car dealers in Nigeria buy automobiles from overseas at a cheap price to sell at a profitable price in Nigeria.
Fairly used cars are not as bad as some people feel. They are often cars which have been used elsewhere but are still very roadworthy and functional. Countries where Nigerian car dealers buy their cars from other countries like Cotonou, USA, Europe and other countries of the world.
How Lucrative the Fairly used Cars Business is in Nigeria
Dealing in fairly used cars is very profitable depending on the way you handle it. Fairly used cars are sold by local dealers in different parts of the country, especially in States like Lagos, Kaduna, Kano, etc. Here the gist is that you buy the fairly used cars at a much cheaper rate than the price you eventually sell it. This way your profit is secured.
Also, since cars will always be demanded by many Nigerians, people will always want to buy cars to aid their movement, your market cannot run low on customers
More so, not everybody can afford a brand new car, this increases your patronage.
Demand Status, Market Structure, Competition and Opportunity
The demand for cars is one of the highest in Nigerian, this is because it lessens the stress of going on trips, and for those who by personal cars, to aid the convenience in their journeys.
It I advisable to open your shop or business close to workshops of professionals like the mechanics, rewires, panel beaters, those who deal in tires, etc.
Basic things to consider before starting up a Fairly Used Cars Business in Nigeria
- Do a Feasibility Study:
This should be done with respect to the area you wish to set up your business. Try to know the taste of the people in that area, the type of cars that they will likely demand.
- Suitable Location:
Do well and find a location that will suit the car business. This includes a vast area of land where interested buyers will easily see it. In other words, display the cars well in such a way that passers-by will have access to it.
- Attractive Business Name:
Take your time to device a catchy Business name. It is a signage for your enterprise. And very importantly, make sure you register the name with the corporate affairs commission (CAC) so as to avoid using a Name already in Use by another company.
- License your Business:
In Nigeria, it is expected of every prospective business owners to get a license for their business. In car dealing with the legal requirement is to get your fairly used car business licensed.
How to set up Fairly Used Cars Business in Nigeria
Follow the steps outlined below to set up your fairly used cars.
1. Skills or Training required
Your Fairly Used Cars Business will grow rapidly if you are well learned in the operation of the business. It is advisable for you to first familiarize yourself with already established fairly used car business owners, for example, dealers of “tokunbo” cars. You should also endeavor to read books and articles about the business, these will widen your knowledge in starting the business.
2. Certificate and License to operate as a fairly used car dealer in Nigeria
The process of licensing a car business in Nigeria differs from that of one state to another. Every state in Nigeria has its own licensing body. You will be asked at the licensing office, some basic question such as; do you have the startup cost? Do you know what you are going into? Are you up to the task? Etc.
3. Startup Cost-Effectiveness of a Fairly Used Cars Business in Nigeria
Like I said earlier, you will need a huge sum of cash to set up this business, as you are going to have to first buy the cars (at cheap prices) and resale (at a much higher price).
Your pocket will determine the type of cars you will deal with. You should try to pick cars that will suit your budget, don’t go and over-budget so as not to run into debt. It is best advised to start with your personal savings.
Look for an appropriate space for displaying your cars. Locations close to mechanic workshops, spare parts dealers, electricians etc. can promote your patronage, and it will make your business grow faster.
5. Technology Needed to Startup
Ensure that the cars are well pimped and fixed before displaying them. As such, you will need to employ a car washer. The cars should be well repaired if need be to enable buyers to have a good impressing about the car and your business.
Administration and Management Structure of a Fairly Used Cars Business in Nigeria
Staff: You will have to employ trustworthy and honest people to work with you. You cannot do this business alone.
Advisors: You should listen to credible and rational advice from already established dealers and experts in the business.
Advertising Agency: What makes most businesses grow is the exposure of people to it, how well known the business is in the country. You should endeavor to publicize your business. You can do this through radios and television stations, newspapers etc.