As long as there’s a need to move about on land quickly, there will be cars to get the job done. And there will be people who want to buy them.
Figures from the National Bureau of Statistics (NBS) indicate that Nigerians continue to buy vehicles for various purposes. A 2017 report from the NBS indicated that there were 11.4 million vehicles plying Nigeria’s roads at the start of that year. By 2018, that number had jumped to 11.6 million- an increase of about 200,000 vehicles in one year.
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That’s a big figure. But there’s scope for even bigger growth in the vehicle sales sector. With the demand for cars steadily rising, you can play a part in helping more people own cars, and get a share of the profits being taken by car retailers in the country.
Here are the steps you can take to establish a thriving car retail business.
Decide What Kinds Of Cars You Will Sell
You can sell used cars or new cars. The path to setting up and running a car dealership will be determined by which one of these options you go for.
If you’ll be selling used cars, your startup capital will be much lower than what you’ll spend on launching a new car dealership. The downside is that your profit margin will be lower. A dealership that sells new cars will cost more to set up, but they also tend to generate bigger profit margins.
Get A Business Plan
A business plan contains descriptions of the business and what it does, what it sells (cars), its target market and prospects for that market over time, the resources you’ll need to start and run the business in its early period (equipment, personnel, etc.), and what it would cost you to get those things in place.
Apart from being a useful reference and guide for you as you build the business, it’s also a document that might be required by lenders if you’re seeking funding from them.
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Your business plan should reflect the reality of the world you plan to operate in. Costs, revenue estimates and profit margins, equipment, and other items mentioned in it should be in tandem with what you would expect of an actual car dealership. It’s important that you research the market before plunging headlong into the business.
Get A Car Dealership License
You should obtain a car dealership license; it’s important that you have it if you want to be recognized as a legitimate car dealer. Some state government agencies issue these licenses; in Lagos, it’s the Motor Vehicle Administration Agency (MVAA).
You can also visit the office of the Federal Road Safety Commission closest to you to find out more about the steps you should take in this regard.
As a certified dealer, you’ll be able to bid for vehicles on certain sites and auctions which would be closed to you if you don’t have a dealership license.
Set Up In ADecent Location
Many car dealerships in Nigeria are located on or close to major roads and highways. There’s a reason for this. You want to be visible to potential customers; you’ll also want to make their entry into and exit from your location as convenient as possible (especially if they’re driving).
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The shape of your business place takes will depend on its size of the business. You may just need an office and a shed to cover your cars, or you may want an office block with a space that’s wide enough to take two dozen cars. Go with whatever fits your budget and plans.
Link Up With Suppliers
Partner with vehicle importers who will help bring in new or fairly used cars that you’ll sell at your dealership. Of course, you’ll be paying to get the imports, so you should factor those costs into your startup plans.
Bid for Cars
This is another way to get the cars you’ll be selling. Car auctions present you with a chance to obtain vehicles at relatively low prices. The Nigerian Customs Service’s (NCS’s) e-Auction platform is probably the most reliable auction service in the country. If you’re going to use the platform and bid for cars there, you’ll have to register there first.
Hunt For Your First Customers
The internet gives you an opportunity to reach out to your potential customers. Put your car up for sale on an online listing site like ConnectNigeria Cars. This will involve you placing pictures of the vehicle(s) you want to sell along with descriptions and price tags. Anyone who visits the website and gets interested in your cars will contact you via the phone number or email you list in the advert.
Featured Image Source: Nigerian Guide
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