THE RED OIL BUSINESS AND ITS HUGE PROFITS Whenever you tell people about starting red oil business, the first thing that comes to their mind is “so I will get stained” Lol.
But the fact is this business is very lucrative. In case nobody ever told you, Orji Uzor Kalu ( He was a former Governor in one of the states in Nigeria) was into this business big time and he made it huge.
Starting a red oil business I must agree is tasking, but once you are plugged in, it won’t be a bad venture, but a bank venture.
Red oil is used by every body in one way or the other. Either for domestic purposes or industrial use, meaning you will always sell as far as you have good products… I mean good oil.
This has been a multi million dollar business in Malaysia. Remember the fable saying that they took the seedlings from Nigeria? Well the fact is they started red oil cultivation before Nigeria.
So let’s go to the main gist:
Starting Red oil business. Just before you start, listen to this carefully.
Some years back a friend of mine told me about the business and after careful study I keyed in. And this is what I did. First we traveled together to do a marketing research for the oil, or build suppliers list….
Those in the rural region who will always supply the oil to us. Thus, we were told to visit one village in Enugu…. Though very far from where I was living then in Nigeria, but was worth the huge experience.
We left to the village from Port Harcourt and we saw for ourselves how the oil was being produced. We tested, priced and took samples.
Right in this village we also got to understand that the business has season, that its better bought and kept around February and then resold at a very good profitable price during November and December when it becomes scarce and expensive.
What I’m saying is that it’s better you buy huge quantity during February when its very cheap and easy to get and stock it, then resell at a higher price during November/December when it becomes scarce and expensive.
So after we did a wonderful market survey, we went back to our station, Port Harcourt visiting major markets and this time building buyers list.
We took their names, address, phone numbers and time they always want us to supply. This makes the whole process easier… This is how to plan a strategic marketing that yield huge profits.
We were surprised how these market women had our time; gave us all the details we wanted. Thus, we knew our customers before time, when to take the oil to them, and how much discount they will prefer we give them, to start buying from us and dump their formal suppliers. Lol. Funny but true.
Another thing we had to consider was to cut expenses…. 20 liters of this red oil from Enugu was then sold at N2,500, but sold in Port Harcourt for N4,000-N4,500. What we needed to also consider was the transportation.
If we added the transportation costs it will be like N2,800 per 20 liters of the read oil. Wow! Not bad at all.
Now if you start this business with say N60,000 that’s plus all expenses you get 20 liters at N3,000 average cost and that’s plus transport to your location.
This means you are getting 20 gallons of 20 liters and if you sell each at N4,000, you make a profit of N1,000 per gallon and since you have 20 gallons, you just made N20,000 from this single transaction.
Note that if you have already built your buyers list that you can supply 20 gallons in less than a day. It means you know who need what and the quantity he or she needs.
Now that you know that this business is lucrative, there are other things you need to know…. When not to sell and how not to sell.
If you really want to stay long and enjoy this business, don’t rush to always sell off as product becomes very scarce during the dry season…
And also expensive. Don’t retail, stick to your wholesale supplying…. Yes there’s more profit on retail per gallon than whole sale, but it will waste your time.
Stay in The business big as a supplier.
Now take this as your assignment if you are interested in this business I want you to do a research around your area where you can easily get this red oil.
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