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How To Start A Successful Logistics Business In Nigeria

Logistics Business

The logistics business is one of the businesses that has been given different names. Some call it a delivery business, while others call it a transportation business. Nevertheless, they all mean the same thing. The logistics business is about moving goods from one destination to another, from the manufacturer to the final consumer.

Are you considering this business? Then visit our shop page to get the comprehensive guide which contains the cost breakdown of starting the business.

Logistics Business
Start Your Business in 30 Days Even If You Don't Have An Idea
Start Your Business in 30 Days Even If You Don’t Have An Idea

Most Nigerians are becoming internet savvy and are engaging in online transactions more than before. Hence, the e-commerce business is becoming more acceptable, and the logistic business is a complementary business to e-commerce. It’s complementary because goods bought online must be delivered to the customer.

See Also: See Also: 60 Online Businesses You Can Start From Home And Become Rich

Therefore, a logistics business is a sure-fire viable business idea. However, you should also note that it is easy to lose your investment if you don’t have the required knowledge to set up this business in Nigeria successfully.

Many entrepreneurs are investing heavily in e-commerce as technology keeps advancing. However, these entrepreneurs also need a logistics company that is proven and trustworthy to work with.

We have seen and read in the news that ineffective logistics can mar an e-commerce business. To succeed in the logistics business, you need to be grounded in all facets of the business and deliver top-notch service.

This article will tell you how to start and operate a successful logistics company in Nigeria.

If you prefer to learn through video, watch the full video here and subscribe to our channel for more business ideas and insights.

What Is Logistics Business About?

A logistics company is involved in planning, implementing, and controlling the movement and storage of goods, services, or information within a supply chain and between the points of origin and consumption. You can trace the origin of logistics to the military. For example, during World War I and II, it was used to quickly move food, weapons, and other relevant supplies.

After the war, logistics became a full-fledged business people began to explore. Over the years, many companies have emerged and grown to become a giant in the industry. Some of the logistics companies in Nigeria you can study as you begin is Courier Plus Services Limited, GIG Logistics, Creseada International Limited, Ocenj Logistics, AGS Movers Lagos, AXPD Resources Ltd, among others.

Logistics may also apply to warehousing, transportation, inventory, packaging, material handling, disposal and security within the business sector.

See Also: Recycling Business – How To Start Recycling Business In Nigeria

Is Logistics Business Profitable?

A primary concern of anyone starting a business is whether the business is profitable or not. The profitability of a logistics business is determined by how many customers you can acquire per time, your pricing strategy, and delivery efficiency. There is a considerable profit in the business when you have a solid strategy on market penetration and customer retention.

As long as the e-commerce business keeps advancing, the logistics business will still be relevant and profitable. You can amass millions in the logistics business if you understand the business. For instance, if you have 20 businesses using your service, and each customer sends out 100 items every month, it means that, by the end of the month, you would have made 2,000 deliveries. In other words, you need to devise an excellent way to have repeat customers.

See Also: 10 Business Ideas To Start With 100K In Nigeria That Will Make You Millions

Equipment Needed For Logistics Business

Go from idea to starting your business in 30 days
Go from idea to starting your business in 30 days
  1. Bus/Truck/Cargo Bike
  2. Space
  3. Computer System
  4. Mobile Phone
  5. Accounting and other Software
  6. Dispatch Box
  7. Stationery

Are you considering this business? Then visit our shop page to get the comprehensive guide which contains the cost breakdown of starting the business.

Steps To Start Logistics Business

Step One – Define Your Mode Of Operation

The first step to starting a logistics company is to choose a means of delivery. Do you want to operate with bikes, buses, or trucks? Will you be involved with interstate or intrastate delivery? Are you going to focus on a particular industry or sector? Do you want to begin as an agent, transporter or contractor?

All these questions must be answered before you begin. Defining your mode of operation will help you estimate the capital you need to start and help you focus because there are many forms of logistics.

If you don’t have the required fund to get your buses or bikes and start as a standard logistics company, you can begin as an agent or contractor.

Starting as an agent means you will be the intermediary between an established logistics company and the business owner needing their service. You will be paid an agreed commission for every business you bring to use the services of the logistics company.

See Also: Palm Oil Business – How To Start Palm Oil Business In Nigeria

Step Two – Draft A Business Plan

A business plan is a comprehensive document stating the goals and objectives of your business and how you intend to achieve them. After identifying your ‘modus operand, it is safe and business-wise to put down the step by step plans in writing.

Additionally, drafting a business plan also helps you access funding opportunities. The information that should be in your business plan are:

  1. An overview of your logistics business
  2. Executive summary
  3. General company description
  4. SWOT analysis
  5. Market Research
  6. Your Strategy
  7. The Team
  8. A marketing plan
  9. An operational plan
  10. Financial projection
  11. An appendix

See Also: Business Plan – How To Write A Business Plan Step By Step For Your Business

Are you considering this business? Then visit our shop page to get the comprehensive guide which contains the cost breakdown of starting the business.

Step Three – Register Your Business With CAC

Corporate Affairs Commission (CAC) is the approved body for business registration in Nigeria. Therefore, the first step to structuring your business in Nigeria is to register the business with CAC. Customers trust and see your business as credible when you register your business.

First, you can either register as a business name or as a limited liability company. The business name is cheaper than the limited liability company; your choice depends on the ownership structure and funding capability.

See Also: Top Legal Documents Every Entrepreneur And Start-Up Should Have

Also, it is crucial to get your registration certificate because you cannot open a corporate account without it. Visit CAC’s portal to run a name availability search to get started. Once your name gets approved, you can then begin the registration process.

Many aspiring entrepreneurs find it challenging to complete the registration due to the procedures involved. That is why it is advisable to hire a lawyer to help you with the registration. One of the trusted firms in Nigeria that helps with business registration is ReDahlia. ReDahlia is located at 43B, Emina Crescent Off Toyin Street, Ikeja, Lagos.

Additionally, location is not a barrier because you can send all the registration requirements via email, and your certificate will be delivered to your preferred location.

Asides from registering with CAC, there are other licenses and permits you need to obtain from the government. Research them and make sure you get them so that your bikes or buses are not harassed on the road.

See Also: Benefits Of Registering Your Business With Corporate Affairs Commission (CAC)

Step Four – Acquire Funding And Capital

You need funding to acquire the appropriate equipment listed earlier and pay your workers. The capital you need will depend on your level of operation. Actually, with as low as N500,000, you can start a small logistic business.

The business plan will help you apply for loans from commercial banks and other forms of business grants. Also, you can get an investor or venture capitalist who is interested in your business idea with a good business plan.

See Also: 11 Ways To Get Funding And Grow Your Business In Nigeria

Once you get your funding, acquire your equipment. If you are operating in a state with high road traffic, you may want to consider investing in bikes. However, new government rules are debarring the free movement of bikes, especially in Lagos.

Therefore, ensure that your means of transportation will not infringe on any law whatsoever. Also, getting reasonably used cars or bikes can be a good strategy for minimizing your start-up cost.

See Also: Small Business Funding – 9 Ways To Fund Your Small Business In Nigeria

Step Five – Set Up A Website For Your Logistics Business

A logistics business must have a website. Your website will serve as the intermediary between you and your customers. If anyone wants to learn about your business, they can easily visit your website, get the information they need and contact you directly from the site. WordPress or Woocommerce are accessible platforms that can help you set up a cost-effective website.

See Also: Digital Marketing Skills To Acquire In Nigeria As An Entrepreneur

Step Six – Get An Office Space

The logistics business is both an online and offline business. Some customers will prefer to visit your office to send their deliveries. So, you need to get an office space where you can also park your vehicles and bikes.

Also, brand your office and vehicles to create awareness and attract your target market. The office space must be spacious and the compound large enough to accommodate your cars and bikes.

See Also: Coworking And Shared Office Spaces In Lagos And Outside Lagos, Nigeria

Step Seven – Hire Staff For Your Logistics Business

In the logistics business, a driver or rider is critical. Hence, it would help if you were careful in selecting and training them. Preferably, you can start as your own driver/rider to get familiar with the routes you operate and the business system. That way, you will have first-hand experience with the business operation.

Depending on the scale you want to operate, it might not be feasible for you to be the only driver or even be a driver at all. But, it helps that you know and understand how the process works. You can develop winning strategies and communicate better with your drivers/riders when you know how things work.

Everyone you hire must learn the company’s culture, behave in a manner that protects your image, speak politely with clients, etc. The more you grow, the more drivers/riders you can employ. This step does not apply to you if you are starting as an agent or contractor.

Apart from drivers, you also need other employees that will attend to customers when they visit your office. You have to train, retrain, and keep training your drivers and staff because their actions and inactions affect the growth of the business, especially the drivers.

Are you considering this business? Then visit our shop page to get the comprehensive guide which contains the cost breakdown of starting the business.

35 Booming Business Ideas And Step-by-step Guides On How To Start Them. A Strategic And Financial Breakdown Of The Most Lucrative Businesses In Nigeria.

Step Eight – Market Your Logistics Business

Nobody will hear about your business if you don’t market it. So advertise your logistics business both offline and online. Connect with e-commerce business owners and offline organizations. Luckily, it is easy to market your business now due to the advent of the internet.

See Also: How To Acquire New Customers For Your Business And Make Them Stay

Here are some of the marketing channels you can explore:

  • Word of mouth
  • Referral
  • Social media advertising
  • Newspaper publications
  • Google advert
  • Collaborations/Partnerships

See Also: 21 Ways To Acquire New Customers For Your Small Business

Challenges Of Logistics Business

Every business has its challenges, and being aware of the challenges is the first way to surmount them. Here are some of the challenges you might face:

1. Some customers are unsure what they want or may change their minds about buying an item. As a result, they may refuse to pick your calls or reply to your text when you get to their location, thereby making you waste fuel and time.

2. Another challenge is the issue of returns. Some clients may say that what you delivered is not the exact item they ordered and request that you return it.

Finally, the logistic business is a business you can start if you have a passion for it. For every business we discuss here, nothing is cast on stone. You have to put in the work, be determined and wait it out to succeed.

Are you thinking of venturing into the logistics business? Do you already run a logistics company? We will like to read your thoughts in the comments.

Are you doing something extraordinary in your industry, and do you want the world to hear about it? Reach out to us today to tell your story.

To keep track of your activities, follow us on Instagram.

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72 thoughts on “How To Start A Successful Logistics Business In Nigeria”

  1. Excellent tips for all startups.

    The logistics business has come to stay but I suppose linking up with key components of the business matters alot. So that you can earn some bucks if you’re starting as an agent or contractor .
    Thanks

  2. adebayo olayinka

    Thank you so much for this article. It has inspired me a lot. How can I get more information about this business? I have a bike already. But I need to know more

  3. Ogbuagu Nkechinyere

    Good day writer,
    I am delighted after reading through this article, I was prompted to take down notes and key points. I presently quited my demanding job in a school as an administrator with a pay of 77k and have been considering to be an enterprenure and start up my own business with the amount of money I have.
    I have thought of trading,POS, but have a strong passion for logistics which was my responsibility at my last place of work.
    I discussed the idea with a friend who is a fashionista and he has allowed that I make use of his office space and be an agent to him.
    I am ready to kick start my logistic business.
    Having a business advise from you will not be a bad idea.
    Thank you very much.

  4. Akachukwu Joshua Obijuru

    I took my time to read all the articles here,and they are all interesting..so am ready to commence this business, seeing it’s my passion.. Thanks so much

  5. John Destiny

    This tip was really helpful. How do I get a business plan template on logistics: that can be started with about 300k using motor bikes.

  6. kingsley okafor

    Thanks so much for the brief explanations on the basis to start up a logistic business. I will love to know if you have any contact on how to undergo comprehensive training on its management also.

  7. Onipede Farouq

    Can a bicycle be used for logistics in neighboring local governments? I have a registered business already.

      1. Akachukwu Joshua Obijuru

        I took my time to read all the articles here,and they are all interesting..so am ready to commence this business, seeing it’s my passion..

  8. Olukayode Jacob Oladipupo

    Lovely write up ,it is educating and inspiring….thanks for the knowledge ,it is a good guide to start up with.

  9. Hey,
    Kudos to you guys. The article is quite informative and educative.
    However, I would like to meet with you for some discussions.
    Many thanks and looking forward to hearing from you.

  10. Doubara Austine Iwolo

    Such a great article. In the long run, I will need enough capital to start up. But still, I need more planning and more consultancy. Thank you.

  11. Ben C Chime

    This is a million Dollars information shared on pro bono. I really appreciate your choice of diction which made the article easy to comprehend. Over the years, I have been a commercial/private Driver.
    I believe am loaded with on-the-job experience.

    To this end, I’m planning to establish Driver’s Outsourcing Agency with a plan to delve into Trucking/Logistics contractor. My Boss graciously suggested sharing our spacious office within the business hub of Lagos so as to encourage a smooth take off.

    Kindly advise me on the immediate steps towards realizing this vision.
    Thank you so much.

    1. Hello Ben,

      Thank you for reaching out to us.

      We have a guide that’s more comprehensive than what you read. It has step-by-step guides even the startup cost of starting the logistics business. Also, we have other resources that will help you run sustainable businesses. Get the guides here: https://www.entrepreneurs.ng/shop/

    2. Hi Ben, I’d like to have your contact information so I can source my drivers from your agency if that’s okay?

  12. Ajayi moshood

    Thanks for the write-up. I want to start the business. I have bike and other means of advertising like Facebook, WhatsApp, and others but my main problem now is how to strategize my business plan so It will be useful for me.

    1. Hello Moshood,

      Thank you for reading our content. We are glad that you want to start the business. You need our researched resource on starting the logistics business. To get the step-by-step guide to start the logistics business, visit https://www.entrepreneurs.ng/product/start-your-own-logistics-business/.

      The book contains everything you need to start the business; startup cost, how to market, etc. If you have more questions about setting up your business, please reach us on 08038874148. Thank you.

  13. The write up is well stated and easy to comprehend .. well I have plans for logistics next year. I want to know if 250k can start it up.

  14. Obiora Donatus

    Good day, Thanks for the write-up, I want to start a bike delivery business in the Level of Themaps.ng

    So, I really want to know what it could cost me to start to that standard and also the Educational qualifications of the staff needed and how to make a research to know how to start.

    Thanks, Obiora Donatus

    1. Hello Obiora,

      We’re glad you’re interested in starting a standard logistics business. You can get the costs of everything you need to start the logistics business here: https://www.entrepreneurs.ng/35-business-ideas/

      It’s a comprehensive proposal to start the logistics business and 34 other profitable businesses. You can reserve us for a session to develop a winning business model for you.

      Thank you.

  15. Ugo Chibueze

    Thanks so much for these information. I really elated. Pls I need more of guidelines on how to go.

      1. Moneke Tochukwu Dorothy

        Please I will like to know more. Can I get a personal coach as am very very much in need to start my logistics company standard.

  16. Elimhingbe Endurance

    This is very insightful, I have been nurturing the ideal long time ago. This can guide me well. Thank you.

    1. Hello Afam,

      Thank you for your interest in starting the Logistics business.

      We have an update. We just published https://www.entrepreneurs.ng/35-business-ideas/

      It’s a comprehensive proposal to start the Logistics business and 34 other businesses. It will answer any questions you may have and give you a head start on your entrepreneurial journey.

      Thank you.

  17. Simon Joshua

    Your article has eased my burden a little. Thanks for this. Pls how much can it take to start a small bike dispatch riding business in Lagos. Cos I want to venture in to it.

    1. Hello Simon,

      Thank you for reaching out. We’re glad you have an interest in starting the Logistics business. We published a crash course that serves as a crash course in starting the Logistics business and 34 other profitable business ideas. The comprehensive guide contains the cost of everything you need to start the logistics business.

      Get it here:https://www.entrepreneurs.ng/35-business-ideas/

      Thank you.

  18. Ohanz Okonz

    I currently on the verge of starting up an interstate logistics company, infact I am currently working on my license before I commence operation but I have found this article of great use and importance.
    Guess I have skipped a whole lots of steps here, so I would like to go back to my drawing board.
    Thanks I really do appreciate.
    God bless

    1. Hello Ohanz,

      We’re glad you found the content insightful. Interestingly, we have a more in-depth guide coming out soon that contains the strategies and cost investment of starting the Logistics business and other businesses. We will send you an email and make the announcement on entrepreneurs.ng once it’s launched.
      Thank you.

        1. Hello Mark,

          Thank you for visiting Entrepreneurs.ng. We’re excited to inform you that we just launched: 35 Booming Business Ideas And Step-by-step Guides On How To Start Them. It contains the steps to start the Logistics business, the cost analysis and everything about starting 34 other profitable businesses.

          You can get the guide from: https://www.entrepreneurs.ng/35-business-ideas/

          Do let us know if you have any concerns.

  19. Omoboye Funke

    I really appreciate this, I believe with this article, I can start my business easily. Thanks.

    1. Hello Funke,

      We’re glad about this! This part of the reason why we do the things we do. Please know that we have a comprehensive guide coming out soon that contains the strategies and investment cost of starting the Logistics business and other businesses. We will send an email and also make the announcement on Entrepreneurs.ng once it’s launched. Thank you.

  20. How much does it require to run logistics and supply organization, how would it look like, as in infrastructure setup.

    1. Hello Yusuf,

      Thank you for reaching out and we’re glad you found the content insightful. For the cost of starting the logistics business, we have a comprehensive guide coming out soon that contains the cost investment of starting the logistics businesses and other business ideas. Do keep tabs on Entrepreneurs.ng because we will make the announcement once it’s launched.

      Thank you.

        1. Thank you. Please know that we have a comprehensive guide coming out soon. It contains the investment cost of starting the business and other businesses.

          Thank you.

    1. Thank you, Moses. We’re glad you found the content useful. Also, we have a comprehensive guide coming out soon that contains the investment cost and marketing analysis for the logistics business and other business ideas. Please, keep tabs on Entrepreneurs.ng, because we will make the announcement once it’s launched.

      Thank you and stay safe.

    1. Thank you for reading, Smart. It will interest you to know that we have a comprehensive coming out soon that contains the investment cost and marketing analysis for starting the Logistics business and other business ideas. I’m sure you will find the answers you seek. Please, keep tabs on Entrepreneurs.ng because we will make the announcement as soon as it’s released.

      Thank you.

  21. Ikechukwu Maxwell

    Thank you very much for this insight now i can start my logistics business with your guide.

    1. Hello Ikechukwu,

      We’re glad that you found the content very useful. Please know that we have a comprehensive guide coming out soon that contains the cost of the investment for starting the logistics business and other business ideas. Do keep tabs on Entrepreneurs.ng because we will make the announcement as soon as it’s released.

  22. Good article do you know other licenses one must obtain apart from CAC registration before commencing operation?

    1. We are glad you found it insightful. The license will depend on the scale of operation and the location. We have a guide coming out soon that’s more in-depth. We will make the announcement on Entrepreneurs.ng once the guide is released. So, keep tabs on Entrepreneurs.ng.

    2. Akowei Solomon

      I’m really impressed and satisfied with all the explanations given here concerning opening a logistic business.

      1. Hello Solomon,

        We’re glad that you found the content insightful. Please tabs on Entrepreneurs.ng because we have a comprehensive guide coming out soon that contains the investment cost of starting the business. Thank you.

    1. We are glad you found it insightful. We have a guide coming out soon that’s more in-depth. We will make the announcement on Entrepreneurs.ng once the guide is released. So, keep tabs on Entrepreneurs.ng.

  23. Olarinde Ibrahim

    I found this very useful, please, how can you help to start up my logistics service. It is urgent.

    1. Hello Ibrahim,

      We’re glad you found the content insightful. We have a guide coming out soon that’s more in-depth. Once, it’s launched, we will make the announcement on Entrepreneurs.ng. Please keep tabs.

      If you’ll like to consult us on business strategy, reserve us by visiting the link;
      https://www.entrepreneurs.ng/business-consulting-services/

      We look forward to hearing from you.

      Thank you.

  24. Ezeme Michael Nnaemeka

    Yea, thanks for this insight. I had to Google Starting a logistics business because am serious about starting one. I will love to be guided properly.

    1. Hell Nnaemeka,

      We are glad you found the content insightful. We have a guide coming out soon that’s more comprehensive. Keep tabs on Entrepreneurs.ng because we will make the announcement once it’s out.

      Thank you.

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