There are many business ideas in agriculture; this article focuses on one of them. We will see how to start a profitable business buying and selling agricultural products in Nigeria.
If you like farming, but have trouble starting a farm due to financial constraints or any other challenge that farmers face, buying and selling agricultural products is an interesting area. Take a look at this post, you will learn a lot from it.
The good thing about this business, and what I love most about it, is that anyone can do it. It doesn’t matter if you are unemployed, busy, poor, rich or poor, leaving school, a member of the Corps, anyone can do it.
You do not need special skills or large terrain or any bank account. I will guide you on how to start a profitable business buying and selling agricultural products with as much money as you can get.
Decide what you want to sell
Let me start by saying that you can sell everything and also on any scale, whether as a trader, wholesaler or distributor. It may not sound like there are items you can’t sell. The decision becomes necessary because there are other factors to consider when choosing which produce to buy and sell agriculture.
While deciding what to sell, you will need to develop a plan for the sustainability of your business.
Your plan should take into account the amount of capital you have to start the business. The amount of money you have will decide very well what to buy and how / where to sell it.
You can start with at least N20,000; you can even start with less than that. The amount of money you have will determine what ROI you can expect at the end of the day.
Your plan should also look carefully and determine how much time you can spend on the business and which model of business suits you best.
For example, if you work full time, you don’t have time to go around the market and find out who buys fresh pepper baskets, right? But it makes a lot of sense to buy a melon seed (Egusi) once a year and sell it during the low season. Do you see where I’m going?
There are three ways to approach trade in agricultural products:
1. Buy / sell small quantities
You can buy the products you want from the farmers and sell them in the market in the same area. It does not require much capital, as there are few problems in terms of logistics / transport. Everything is done in the same conditions, so your costs are minimal.
If you establish a relationship of trust with farmers, some may even sell their produce and return the money, so you won’t even have to pay.
The downside is that the ROI can be expected to be minimal. Because trade is done in the same state, many farmers felt that they could sell their own products themselves and make even more profits.
So if you have the guidance of a decent ROI, it may not be the way to go. But whether or not you have little money to start this business, you need to get started.
2. Medium / large scale
Another way to approach the trade in agricultural materials is to buy products in one country and sell them in another.
Here is an example: you can buy rattle tubers in Benue state where they have a jam in many countries and sell them in Sokoto state where they are usually scarce. On the way back, you can buy everything that Sokoto State has in abundance and sell in Benue State.
It can even be bought in one African country and sold in another. I know people who would buy dried fish in Mali and sell it in Nigeria. This model has the highest ROI, but it also carries a higher risk because a car accident can wipe out all of your capital, especially if you don’t have insurance.
It takes a lot of time and you have to be willing to travel a lot. This is not the business you start with N50k; only the shipping cost can cost more than the N50k you have.
To start a business, you need a larger capital base. One thing you shouldn’t worry about is the benefit; All in all, you will need to earn a very good ROI on your investment.
3. Save now / sell later
Another way to approach the trade in agricultural materials is to buy a specific product during the high season when the price is cheap, store the product and then sell it out of season.
Some of the items you can store are palm oil, melon seeds (egusi), ogbono, graffiti, dried pepper, and so on.
You need to know when the products that interest you are. In season, these products will be significantly cheaper. So you buy it when it is cheaper and sell it when the price goes up.
This business model is best suited for employees or employers who need to invest their money elsewhere instead of saving it in the bank. It takes a long time between buying and selling. You have to be patient.
If you buy large quantities of products, you get insurance for freight traffic. Accidents can happen at any time, you don’t want to be on the side of the loss.
Finally, the decision to start is the most important. If you can’t afford to start big, then choose to start small and grow into a big company.
If you are already in the business, I would love to hear your experience in your comments.