2 Hot-Selling Commodities That You Can Export To Make 100% Profit On Every Sale
Finding the right type of business to start up is one of the most difficult things many people have to face. As a result, 9 out of 10 businesses fail in 10 years, and most of the last ones standing do not survive the next 10 years that follow.
The same applies to finding the right type of commodity to export.
The export business in its own right is a highly lucrative business to venture into, but determining the right type of commodity to export depending on the profit margins you’re targeting can sometimes be a problem.
While some exporters are okay with netting profit margins of between 10-30% per non-oil transactions, many others are uncomfortable with that, especially as an export cycle in a country like Nigeria is about 45 days, and so, would want to make the most of the time and possibly make up to or more than 100% profit on the commodity exported.
If you’re looking for high-margin commodities that can take your export business from 0 to 100 in 45 days, here are 2 hot-selling commodities that you can export to make up to or more than 100% profits on every sale:
Sheabutter is a hot-selling commodity in the cosmetic world, especially as the biggest brand names all over the world use it in a lot of their products. It is produced from the shea nut, is white/orange/beige in color, and packaged in plastic containers for local supplies and international deliveries.
Why Is Sheabutter So Profitable?
At the start of the shea nut season, the nuts are usually sold in the local Nigerian communities for around $313/mt in the producing states of Nigeria and when they’re processed to shea butter, the cost per each rises to around $600/mt.
Now when international buyers from Asia look to purchase the shea butter, they usually target a $1,600/mt to $1,900/mt price. And since local shipping charges can cost about $200/mt, the total cost price of the product would amount to around $800-900/mt.
Even better, shea butter is sold to European and North American countries for sometimes up to $3,800/mt; and in rare cases, up to $8,000/mt. At this price, the exporter could make over 400% profit margin at the beginning of the season.
But as the season progresses, the profit margin drops and the only place an exporter could make a 100% profit from is if they ship to Europe and North America, as Asian profits would drop from around 100% to 15-20% range.
2). Cashew Kernel:
The cashew kernel is the roasted cashew produced from the raw cashew nuts. When it is processed to cashew kernel, it comes in many sizes ranging from W240 to W320, W450, and so on, and each size has its own price range.
Why Is Cashew Kernel So Profitable?
At the start of the cashew season, raw cashew nuts are sold in the local Nigerian communities for around $200-520/mt. At this time of the year, the quality of the raw cashew is very high, and so, the production outturn to the kernel is also good.
Good raw cashew nuts are processed to cashew kernels on a 4:1 basis. Meaning that 4 tons of raw cashew nuts produce 1 ton of processed cashew kernels.
What this means is if you’re purchasing the raw cashew nuts locally at a median price of $360/mt, you’d spend $1,440 plus another $400/mt in processing fees to achieve 1 tonne of processed cashew kernels. Making the total amount spent in production being $1,840/mt. If you then factor a $200/mt cost for local shipping charges and documentation to the port, the total expense comes out to about $2,040/mt.
Now, selling W320 processed cashew kernel’s international price as of 2020 was around $6000-7000/mt. Meaning that if you trade W320 processed cashew at the start of the 2020 season, the profit margin would have been around 300%.
The most interesting part is when this same cashew is been exported to some parts of Europe and America, the price can go as high as $8,500/mt.
But as the season progresses, the price of raw cashew rises, and so the profit margins drop. During this period, if you want to export processed cashew and still net a profit margin of almost 100%, you’d need to exclusive target the European and American market which might be a bit difficult to break into at first.
To Sum It Up
There are several commodities that can be exported at margins that are up to or more than 100% on every trade. Identifying them and doing all it takes to build an international market for them can be key to building a successful export business very quickly.
You also need to improve your negotiation skills and learn how to get international buyers emotionally inclined to want to instead do business with you.
If you’re looking for highly lucrative commodities to export, you can start with the two above.
An Important Point
Startup Tips Daily Media’s sister company, Globexia Limited, is a global commodity trading firm that exports agricultural products like Sesame Seeds, Raw Cashew Nuts, Dry Split Ginger, Soybeans, Dry Hibiscus Flower, Tiger Nuts, and much more agro commodities from Nigeria to international buyers around the world. The company also exports solid minerals like muscovite mica and Lithium ores, and facilitates oil and gas trade within Nigeria.
If you’re an international buyer looking to purchase commodities from Nigeria through an export company you can trust, Globexia is an organisation to work with.
You can contact us through the details below.
We look forward to hearing from you.