Key Steps to Becoming a Successful Palm Oil Supplier in Nigeria

In the palm oil business, there are three (3) classes; “extractors, producers or manufacturers, and suppliers”.

The extractors are those who pluck the kernel nuts from the trees to sell to companies interested in buying palm kernels.

The producers or manufacturers are those who buy the kernels from the extractors with the main purpose of converting them to red oil popularly known as palm oil.

While the suppliers are those who buy the red oil to sell to the final consumers or retailers.

My focus in this article is to show you how to Become a Successful Palm Oil Supplier in Nigeria, the best place to get the oil, and how to sell and make millions from this business.

But if you want a general knowledge on starting a palm oil business, then you can check this article: How to Start Palm Oil Business in Nigeria after you have read this article.

The red oil business is one of the underrated businesses in Nigeria and Africa as a whole.

This business has the capacity of turning you into a millionaire in less than a year. Even the country Malaysia is wealthy just because they focus on this industry.

And the surprising thing is that the Malaysian red oil was taken from Nigeria.

So if you still think this business is not something worth looking into, then I really can’t tell what your problem is.

One of the best things about the palm oil business is that; it doesn’t get spoilt, and it is ever in demand in and out of its season.

It is also very easy to store and can last long(years) without any signs of spoilage if properly stored.

Another surprising thing about this business is, you can start with as low as N10,000 and make at least N30,000 as a return.

This business is also something you can do part-time alongside your current job, as it doesn’t require daily activities but rather seasonal activities.

These are the things you must know before you start a red oil business as a wholesaler/supplier

How to Start the Palm Oil Business in Nigeria as a Supplier

1.  Locate the state where you can get the best oil.

Obviously, you should know by now that there are varieties of oil just like you see diverse species of other living organisms.

In Nigeria, palm oil is mainly found in the tropical region, and within the tropical region only a few states are best known for producing the best palm oil such as;

• Edo
• Delta
• Akwa Ibom state
• Imo State
• Bayelsa
• Cross River State
• Ondo
• Ekiti
• Ebonyi

All these above-listed states are where you can get palm oil at cheap prices and in good quality.

2. The Best oil to Buy

In locating the best oil there is one major thing to watch out for, which is; the color. if you are just starting it is advised you take an expert along with you.

There are many adulterated palm oil in the market and if you fall victim to any of them, you will not only lose customers you will lose trust.

"Trust is the cartilage of any successful business. If you lose it you might not be able to recover from it."

So, if you are a beginner in this business, it is either you take someone along with you who knows the business or an expert in the field to help you avoid such mistakes.

Note, when you going to buy your oil, make sure you carry your own jerrycan, for the seller(manufacturer) to turn it into yours.

The reason for carrying your own jerrycan “even though they might indulge you to carry theirs for free” is because; some of these sellers do turn water into their jerrycan, then turn the palm oil on top.

Definitely, you know due to their chemical components, the red oil will never mix with the water instead it will float on top of the water.

And if you decide to buy the red oil in the month of March to hoard till September, it will be too late to return it.

The next thing to do after buying the oil is where to store it and how to store your oil.

3. Storage of Oil

Storage of palm oil is one of the easiest to do as it doesn’t require any technological measure.

In storage of the palm oil, one major thing that palm oil doesn’t agree with is sunlight.

This means that at all costs the red oil must be stored indoors.

In storing palm oil indoors, the oil shouldn’t touch the floor, and it should rest on the wall.

In other to prevent that from happening, planks will solve the problem; put planks on the floor and the wall.

That is how easy it is to store your palm oil.

And palm oil can be stored for years without losing its initial taste or color if properly stored as written above.

4. When to Buy and Sell

The palm oil business just like any other agricultural crop has its own in and out season period.

The best time to buy your palm oil is during its season which is normally between February to June.

From February to June palm oil is very cheap and it is always high from September to January.

This means that the best time to sell is from September to January

From September to January, you can make 100% and above as profit even if your selling skills are bad.

Using last year’s market price statistics; palm oil was sold for N6,000 per gallon as of March and in November it was N25,000 per gallon which is 400% profit increment

Imagine you had invested N100,000: 100,000 X 400% = N400,000 profits

And right now in this Buhari regime things are more costly than before. So my advice for you is that you don’t miss the next market opening season of this business which is February to June.

Where and How to sell your Palm Oil

1. You can sell online.

Selling online is very easy, all that is required is that you meet the basic requirement which is; well-packaged products with an authentic NAFDAC number on them.

Platforms like; Jumia, Konga, Kara, etc. are the online platforms you can easily access to sell your palm oil.

The compulsory criterion they will all ask for is your NAFDAC number.

To get the NAFDAC approved number is by joining the “Nigerian Association of Chambers of Commerce, Industry, Mines, and Agriculture (NACCIMA)” or any other registered small agric group that could be of help.

It is also important to note that NAFDAC won’t approve your product if it doesn’t look appealing to the public (ie the packaging speaks a lot if they are to approve your product).

2. You can sell to restaurants

Selling to restaurants might be tiring but profitable as you might be called upon to deliver within short intervals due to their high consumption of palm oil products.

Selling to restaurants directly doesn’t mean you shouldn’t have your packaging right or your NAFDAC number missing, both are very important.

Matter of fact the restaurants you intend to sell to will highly value your product if they are well packaged and have the NAFDAC numbers.

These restaurants don’t exclude international eateries such as KFC, Mr. Biggs, GT, Chines restaurants, etc.

Though they might have their current suppliers, it is also open for you to pitch your own product to them. That is why you must have your packaging right and the NAFDAC number intact.

3. Selling Internationally (EXPORT)

Exporting your red oil might come with a little task, but it is a worthy journey.

You can either join an online platform that allows foreign countries to buy from their sites or you can create a website for your product.

In the case you opt for the creation of the website, it is important to also create Facebook and Twitter ads that have a landing page for your website.

The website might demand a bit more currency (money) just to put it on top of other websites in SEO ranking.

That is why you will have to start with the local market first, when you’ve been able to conquer your local market sufficiently, you can then start the international market.

By then there will be a lot of capital to spare for the building of your brand and website to compete internationally.

And you can use courier services like shoptomydoor.com to ship your palm oil internationally.

Challenges of Selling Palm Oil Products

Selling palm oil products in Nigeria comes with its unique set of challenges, and addressing these challenges strategically is essential for success in the market.

Here are some common challenges you are likely to face selling your palm oil products in the Nigeria Market and potential solutions:

1. Fluctuating Market Prices: Palm oil prices in Nigeria can be volatile due to factors such as global demand, weather conditions, and market dynamics.
   Solution: Diversify your customer base, explore value-added products, and engage in forward contracts when possible to secure stable pricing.
2. Quality Control: Maintaining consistent quality is crucial, but issues such as contamination or improper processing can impact product quality.
   Solution: Implement stringent quality control measures at every stage of production, invest in modern processing equipment, and ensure adherence to hygiene standards.
3. Market Competition: The palm oil market in Nigeria is competitive, with numerous producers and sellers.
   Solution: Differentiate your product through branding, quality assurance, and sustainable practices. Explore niche markets and build strong relationships with wholesalers and retailers.
4. Supply Chain Challenges: Issues in the supply chain, such as transportation bottlenecks or delays, can affect timely deliveries.
   Solution: Develop robust supply chain networks, work closely with reliable logistics partners, and maintain adequate buffer stocks to handle unexpected disruptions.
5. Regulatory Compliance: Adhering to local and international regulations, including quality standards and export requirements, can be complex.
   Solution: Stay informed about regulatory changes, seek necessary certifications, and ensure compliance with industry standards. Engage with relevant government agencies for guidance.
6. Environmental Sustainability Concerns: Increasing awareness of environmental issues related to palm oil production, such as deforestation, can impact market perception.
   Solution: Embrace sustainable and environmentally friendly practices, obtain certifications like RSPO (Roundtable on Sustainable Palm Oil), and communicate your commitment to responsible production.
7. Access to Market Information: Limited access to accurate market information can hinder effective decision-making.
   Solution: Invest in market research, leverage digital platforms for market insights, and participate in industry events to stay informed about market trends and demand.
8. Seasonal Variations: Palm oil production may vary seasonally, leading to fluctuations in supply.
   Solution: Plan production schedules to align with peak seasons, explore storage solutions, and diversify product offerings to maintain a steady supply throughout the year.
9. Financial Constraints: Limited financial resources may constrain investments in equipment, technology, and market development.
   Solution: Seek financial support through government agricultural programs, agricultural loans, or explore partnerships. Develop a budget and financial plan for optimal resource allocation.
10. Changing Consumer Preferences: Evolving consumer preferences, such as a preference for healthier oils, foreign oils can impact demand.
    Solution: Adapt to changing consumer preferences by diversifying product offerings, exploring healthier variants, and communicating the nutritional benefits of palm oil.

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