Engine oil business constitutes the lucrative oil-related businesses in Nigeria and one of the reasons for this is the widespread usage of oil commodities. Particularly in auto markets, engine oils are always in high demand, hence paving the way for a sizeable population of engine oil dealers.
If you want to make success with engine oil business in Nigeria, one important thing is to master the conduct of the business while another is to understand the marketing strategies that can keep the business moving amid stiff competition.
This article is intended to guide you on how to start engine oil business in Nigeria especially if you can only afford starting with low capital.
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Steps for Setting up an Engine Oil Business in Nigeria
Step I: Feasibility Study
This is very important to ensure you don’t start up your engine oil business badly. Your feasibility study should entail the identification of potential customers in order to fetch opinions from them. This way, you’re certain to gain sufficient background knowledge about engine oil business.
While the feasibility study defines your target audience, you should try every means of knowing your potential customers depending on where you wish to situate your business unit. Advisably, find out the kinds of vehicles used in the area as well as the proximity to potential buyers such as vehicle spare parts dealers, automobile mechanics, drivers, vehicle operators, industries, etc.
Step II: Setting aside a Physical Business Unit
The physical unit where your engine oil business will operate could be a warehouse or shop depending on how you intend to kick-start the business. If you have a good deal of capital, you may set up a considerably sizeable warehouse which is partitioned into shelves and compartments for the storage of products.
Most importantly, your physical business unit (particularly in the case of a shop) should be situated in a strategic area –an area with a sizeable population of potential buyers. But if you’re damn sure of getting in touch with as many as possible buyers and can comfortably operate as a wholesaler, you may set up a large warehouse anywhere and hope to convey your products to the buyers.
Step III: Stock Purchase
If you’ve made up your mind to operate as a wholesaler and believe you have adequate capital for doing so, you may contact a number of oil and gas companies for the purchase of oil supplies. In this regard, it could be beneficial to look out for the suppliers of high-quality engine oils if you’re really ambitious about being a high-profile wholesaler.
But if beginning on a relatively small scale is what you can afford, you may have to operate as a retailer purchasing engine oils from various notable wholesalers in your locality. Do well to find out the prices of various engine oils in your locality as well as the contacts of reputable wholesalers.
Step IV: Purchase of Equipment
Just like various other businesses, engine oil business requires the purchase of equipment which may include a pickup truck, a number of fire extinguishers and the installation of a fire-alarm system.
For the fact that you’ll be dealing in oil, you really have to maintain safety precautions so as to prevent dangerous ignition. Besides the purchase of stock, buying equipment happens to be a crucial expenditure aspect of your business startup. As such, you should factor in additional expenses such as what is needed to hire and pay staff including drivers and sales representatives.
Step V: Marketing
This is just one crucial aspect that may determine your sustainability as an engine oil retailer, wholesaler or supplier. Depending on your specified scale of operation, you can choose from a variety of marketing strategies but make sure you’re getting your products in front of potential buyers such as auto mechanics, auto spare parts dealers, truck drivers, etc.
Conclusion
Engine oil business has remained one of the lucrative businesses one can set up in Nigeria both on small and large scales. If you observe that there are a large number of auto mechanics in your locality and feel you can constantly supply them engine oils, oil business could be a suitable choice for you.
