The cosmetics business in Nigeria is gradually becoming a lucrative business in Nigeria because many Nigerians now care about their skin and the way they look generally. The average Nigerian woman spends about 5% of her monthly income on body creams, bathing soaps, hair creams, hair relaxers, face masks, powder, and more just to look different from every other woman around them and to attract men.
Is Cosmetic Business Profitable?
Cosmetic business is a profitable business in Nigeria for many reasons. One of them is that the average Nigerian men spend less but still chases after all these cosmetic products to also look good. Those that are dark in complexion want to become light in some cases and those that are light want to become lighter. This is why in Nigeria cosmetics business is highly profitable now. Many Nigerian youths are not left out of this either they want to look flawless and attractive and do not mind spending a huge amount to money to be able to achieve this.
Asides from all these, the cosmetic business is also profitable and lucrative because it is a very large business sector in Nigeria. Because it consists of make-up business, an organic care business – a kind of cosmetic business where natural fruits and vegetables are used to glow the skin, and a skincare business – a kind of business where you recommend products or solutions to customers having skin problems.
So it is a very large business in Nigeria as regards the overview of the cosmetic industry in Nigeria. You can either go into just one aspect of the business in Nigeria or go into all aspects of it if you can afford the capital needed to start.
How to Start Cosmetics Business in Nigeria
Here are steps on how to start a cosmetics business in Nigeria.
1. Do your Market Survey
In as much as all Nigerians use body creams, soaps, and other kinds of cosmetics products you still need to do the due diligence and perform a market survey or cosmetics business plan in your area, state, or town if starting a cosmetics business there can be lucrative.
Doing a market survey when starting any business in Nigeria is important as it lets you know if the business you are trying to start is lucrative especially where you want it to be located or not. It let you understand what Nigerians basically the ones in your area can afford as regards cosmetics.
For example, an average Nigerian living in the village cannot be able to afford expensive creams like Nivea even though they might want to buy it. They will rather use cheap creams like Vaseline or shea butter as they have other important needs like food to spend their money on.
So starting a cosmetic business in areas like this might not be successful. Remember the customer (consumer) is king. Conducting a market survey or business plan before starting a business in Nigeria also gives you a picture of how Nigerians in your area think as regards their money and expenses. What cosmetics products will sell to them and what cosmetics products will not sell?
That is why after carefully considering all these, my best advice here is for you to start your cosmetics business in a city rather than just any random place. If you look around you and you do not see any cosmetics business in your area, it might not necessarily be because no one has not come up with the business idea.
It might just be that all business starters or investors have discovered that the business will not be lucrative or profitable therefore opt-out. Watch out! If you are also writing a cosmetic business plan or you are getting someone – a professional to write it for you all these will be noted in the business plan of the cosmetic business.
2. Get the Capital Needed
After doing your market research or market survey, the next step here is for you to source the capital you will need to start your cosmetics business in Nigeria. Writing a cosmetic business plan PDF will inform you on the kind of cosmetics business you can start and therefore inform you how much capital is needed to start the business.
A cosmetic business plan is very important for your cosmetic business especially if you are going into the business on a wholesale level (large scale). As for how you can get the capital to start the business you can do this by self-funding the business yourself or by getting the money as a loan and as time goes by paying back the money on an installment basis.
The exact money you will need as capital in this business is not specific as it all depends if you want to start the business on a small scale, medium scale, or large scale. However, if you want to start the business on a small scale level you will need capital not less than N100,000. To start the business on a medium scale level you will need a capital of N500,000 or more.
And if you want to start the cosmetics business on a large scale you need capital not less than N2,000,000 (N2M). Starting at any of these scales has its advantages and disadvantages. For example, if you start at a small scale the most benefit you will be getting from this business is low risk in terms of the capital you invest.
And if you start the business at a large scale the most advantage you will be getting from this business is higher profit. Either of these scales is beneficial in one way or the other. It just depends on the one you can afford.
3. Rent a Shop or Space
When it comes to starting a profitable cosmetics business in Nigeria renting a shop at the right location is very important. So when renting a shop you should consider these 3 factors. An area where:
1. Buyers or consumers can easily afford to buy your cosmetics products
2. Thousands of Nigerians pass by every day
3. Customers can easily locate you
After you have gotten your cosmetics shop. You need to design it – create a brand for your cosmetics business hence, creating a cosmetics shop image and design in Nigeria that will attract customers to your shop to buy your products. You can get a graphic artist to do this for you.
4. Buy Cosmetic Products from Wholesalers
Depending on how much you want to use in starting your cosmetics business you can either buy your cosmetics products from wholesalers in popular markets like Aba market (Abia State), Onishta market, or Eko/CMS market in Lagos State or import your cosmetics products directly from the USA or China. You can start by buying from the local markets around you and as time goes by when the cosmetics business has started yielding massive profits year in and year out proceed to import directly from China.
Importing from China can give you a total makeover in your brand because you can add your brand to the cosmetics products right from when the products are made making it look like you produce your own cosmetics products yourself.
This gives you authority in the cosmetics business and makes you own the beauty sector in Nigeria easily. I know a popular cosmetics brand that does this very well but I won’t mention their name.
5. Stocking your Cosmetics Shop
Stock your cosmetics in your shop after buying them from your wholesaler extreme care must be taken. The first care is to make sure the cosmetic products are well packaged into the delivery van to avoid spillage or damage. And the second care is to make sure cosmetics goods are well arranged in your shop. This is after doing your stock.
Stock is the process whereby you make sure all the cosmetics you brought from the wholesaler are well accounted for with their wholesale prices so that you can know how much you will add to it as your profit.
Stocking or inventory as some people call it is very important in the business of buying and selling as it lets you know how much you bought each product and how much you are willing to sell them. After all these, you can now proceed to arrange your products: creams, powders, mascaras, lipsticks, make-up brushes, and so on in your shop.
Do not forget to use display shelves that are very attractive to the eyes to arrange your cosmetics. You can contact your local furniture shop for this. Also, lightning is very important as this makes your shop look attractive from the outside to the inside. There are some specific kinds of bulbs that are used in this kind of business in Nigeria. Contact your local electrician on this too.
6. Start Selling your Products
At this stage start selling your cosmetics. Many business starters in Nigeria think to start selling their products they need a grand opening but this is not always true. There are some businesses you just have to start anytime and any day as long as the goods are available and there are customers to buy them.
This is why I advise Nigerian youths to always advertise what ventures they are into even before they actually start these ventures so that buyers will start coming in right on time. In any kind of business, the first people or consumers you should always try to sell to should be your family and friends.
Aside from the fact that doing this helps you to learn how to advertise your products easily it also helps you make money on time as a beginner in any business. So as regards this cosmetics business in Nigeria, try to advertise your products to your family and friends for profits to start coming in from day one or before day one.
7. Selling your Cosmetics Online
If you are into any business in Nigeria selling your products or services online cannot be overemphasized. E-commerce websites like Konga and Jumia and Websites like Jiji can be used to promote your cosmetics products online to intending customers. This is because 70% of your customers will not pass in front of your shops rather they will be online either shopping or snooping around on social media (Instagram, Facebook, and Twitter).
You need to meet them there. With a good phone that has a good camera, you can snap these cosmetics products and upload them online for advertisements.
A. Keeping Cosmetic Products from Spoiling
When it comes to keeping cosmetics products in Nigeria and making sure they are sold in good condition there are some precautionary measures you must take as a seller to avoid losses. These precautionary measures will be mentioned below so that it will be easy for you to take notes of them.
B. Keeping Cosmetics in Cool and Dry Places
Because cosmetics products are made with fruits, vegetables, minerals, and some chemicals they have to be kept in a cool and dry place despite being packaged in good containers. So it is advisable that anybody who is into the cosmetics business should always make sure they store their cosmetics products in good places.
Make sure your shop and store are not damp and at the same time not hot as this can affect the effectiveness of the products.
C. Watch Out for Expiration Dates
Cosmetics products don’t last forever this is another consideration you need to put in mind. You need to watch out for their manufacturing dates and expiration dates before buying them from your wholesaler, distributors in Nigeria, or even manufacturing companies so as to know how to sell them off your shelves before they expire.
You can get a separate book to keep accounts of all your cosmetics products manufacturing dates and expiration dates to conquer this. The last thing you want is to be sued or arrested for selling expired cosmetics products to customers.
D. Prioritize Low Prices First
It is normal for anybody who is into a new business in Nigeria to want to make big profits shortly after starting but in the cosmetics business, I strongly advise that you yield to this as it will chase your customers. No customer in his or her right senses in Nigeria will want to buy their cosmetics at almost double the price all in the name of encouraging you.
They don’t know you before and have yet to develop a good relationship with you. Rather they will go somewhere else they can get it cheaply. So you need to reduce your price to a good extent just to attract them. Another benefit you stand to gain if you reduce your cosmetics product price a bit (for a while) is that it will speed up sales of your products which will in turn not allow your cosmetics products to spoil or expire on your shelves.
You can start your cosmetic business just the way you are and after some time when the business starts making good profits, go ahead and register the business. The main thing here is to start and focus on selling.