Engine oil (lubricant) business in Nigeria: how to start and make money from it - Startuppreneur

Engine oil (lubricant) business in Nigeria: how to start and make money from it

If you are looking for business that few knows about engine or lubricant oil business top the list, it is a buy and sell business, you don’t need to produce anything you buy in large quantities and sell to consumer.

It profitability is not a thing of debate, it is a glaring fact that industry machine, automobile and some big generator cannot do without engine oil, they all need it to perform effectively which means engine oil is in high demand.


If you do this business you have little competition to worry about but you need to locate your store or space to street or traffic source because engine oil business thrives in high traffic area.

Note: Engine oil is a street business you need to locate it in a traffic source


Before we delve into how to start engine oil business I want you to take note of the following headings

Niches of engine oil business in Nigeria

There are two niches of engine oil business in Nigeria and they are

1) Wholesale/ distribution engine oil business
In this niche your job is to source for oil from producer and sell it or distribute it to retailer. You need huge amount of money to start this but it is very lucrative and you don’t need to be in high traffic source to make sale.


2) Engine oil retail business
Your job here is to buy from wholesaler and sell it to final consumer. It can be start with little capital, but to make a great sale you must be in high traffic source such as road side, fuel station.

Types of engine or lubricant oil to buy and sell in Nigeria

1) Motor engine oil
Motor engine oil is one of the best engine oil to sell because it is high in demand, vehicle will surely need oil before it can work effectively.

If you chose to sell engine oil as a retailer, you need to move closer to fuel station and do not sell bad brand if you do, no one will want to buy from you ever even if you now have good brand.

2) Break/clutch fluid
This is in the same categories as motor engine oil, you need to move closer to fuel station and follow the advice in motor engine oil niche.

3) Automatic transmission fluid
Moving from manual to automatic also shift engine oil demand to automatic transmission fluid.

You should take caution with this product because the number of automatic car in Nigeria is less down that of manual, you should not buy more than you can sell or else it will just tie your money down.

4) Diesel oil
Most engine oil entrepreneur do not sell diesel perhaps because of the cost of purchasing it, if you have the money you can buy and sell it; it is the second most lucrative product to sell in engine oil business.

5) Grease
Do no neglect this too, many machine and automobile uses grease to prevent rust, you will always make your sell if you chose this product.

Others are

Turbine oils
Transmission oils
Marine lubricants
Technical fluids

How to start engine oil business in Nigeria
By now I will assume you have chosen your niche and what next is to go into the step of starting engine oil business in Nigeria

1) Gathered knowledge

As usual, we always advice entrepreneur to look for someone that is already making money with engine oil business.

No doubt this article will show you everything you need to start the business but you still need to have a mentor that will show you in an out of the business in your proposed location.

You should be able to get the knowledge in 3 to 5 month and if you want it to be quick, you can hire someone to help you set up your business while also learning from that person, but be careful with this method, it can back fire such that the person you hire will reap you off.

During your knowledge gathering know how to source for oil from the producer in credit, yes oil producer give out oil in credit to their trusted customer.

2) Feasibility study
After gathering knowledge, what next is to check if your oil business will be profitable in your proposed location, don’t get me wrong oil business is profitable but not in all location, you should look for area with high vehicle and motorcycle traffic if you are starting as a retailer, wholesaler can also do this but is not compulsory?

Also you need to know the number of competitor in your proposed location can you beat them?

Hope you know that oil is commodity product, you cannot add or remove from it, what you need to beat the competition is services, therefore let your services be above average

3) Business plan and strategy

How did you plan to move from A to B in your business, write it down and complement it with a strategy.

There is high chance that your business plan will be useless once you reach your second year, but you should still write it, you never know, it might serve as a platform to use when you want to pivot and also when you want to expand your business with loan or investment In the future your business plan will come in handy.

Below are what you should include in your plan

  • Executive summary
  • Company/business background
  • Competition analysis
  • Marketing strategy analysis s and strategy
  • Staffing

4) Source for capital

Do not use bank over draft to start your business and you should be warry of bank loan that does not require collateral.

Below are the sources of capital you can look into for funding your engine oil business

  • Personal savings
  • Friends and family
  • Bank loan
  • Trade credit (Buy oil in credit and pay back later)
  • Seek investor

5) Register your business
If you are starting as wholesaler you need to register your business to avoid confrontation with government authority such as CAC (Corporate Affairs Commission).

If it is retailing, you can leave it till your business become big.

6) Set up your warehouse or shop
For wholesale you need to rent or build a warehouse that will house your oil product.

You should not forget to buy vehicle which you will use to deliver oil although most time retailer will come with their own vehicle.

For retailer you should set up shop to a traffic source where you know you can sell very well.
Whatever niches you are choosing do not light cigarette near it and create a sign that will wade people off.

In other to prevent fire disaster, buy fire extinguisher and keep bucket of sound.

7) Stocking
Stocking of oil is not hard, you don’t need any manual just make sure they are placed firmly. Below are the brands to buy oil product from

  • Exon
  • Mobil
  • Castrol oil
  • Tonimas oil
  • Total engine oil
  • Shell engine oil

Engine oil or lubricant distributors in Nigeria
Chucorl Nigeria limited

  • Kk internat
  • Al trust int.service
  • S.C dubinson nig lmtd
  • Woopet ogbus
  • Elton ventures

8) Marketing
Engine oil marketing is not hard since producer of this oil would have spent a great amount of money to advertise their product and if a product is not selling, you can opt in for another one but all the same if you want to have a great sale, you should look for a location with high traffic.

Below are the advertisements medium you can use to make people aware of your business

If you have been reading our article you will know that flyers always top the list of advertisement medium because it is the best medium to use if you want your family and friends to help broadcast your business. Let your flyers be neat and catchy.

Since engine oil is a location based business you can erect a sign post to a junction, it will tell passerby about your business and also lead them to you.

Radio and T.V

This is for wholesaler, do not think radio and T.V ads is old cargo in fact according to research they are the best advertisement medium for location based business.

Social media
Social media will not do more since engine oil is a commodity business. You can only use it to let people aware that your business exists.

Set up you google my business account, you never know someone might type ” where to buy oil in so so place” and voila your business will pop up.

Cost of starting engine oil business in Nigeria

Though It depend on scale and location below is the average capital needed to start engine oil business in Nigeria

Whole sale
You will need between #1,000,000 and #3,000,000

Engine oil retail business
You will need between #200,000 and #1,000,000

How profitable is engine oil business in Nigeria

Engine oil is profitable but not the kind of cryptocurrency profit, lol. You should get between 10% and 15% of your investment capital which is a good thing considering the fact that you can double it in month.

To analyze it in figure if you invest #1 million you can get #100,000 to #150,000.

Challenges of oil business in Nigeria

1) Bad location
If you have been reading this article carefully, you will find out that I harmer on traffic source location a lot, if you make mistake of setting up in poor location you will hate yourself, only your family and friends will patronize you.

2) Bad brand
Once you know that a particular engine oil brand is bad, do not sell it if you do, it will affect the sales of other product.

3) You have no say
Since you are not the producer clearly you cannot dictate how your product will look, it is also hard to have a unique selling preposition that will differentiate you from others

5) Competition
You will surly have competitor, if you don’t check that area very well, it might be that the area is poor. The only solution to this is to set up your shop close to fuel station. If you are stating as wholesaler you don’t need to fret.

How to start engine oil business with low capital

To start engine oil with low capital you need to start as retailer, and must have a good negotiating skill such that wholesaler can give you oil in credit while you pay back when you make sale.

It is a good thing that you read the above content but it will be a waste of time if you don’t act on it, stand up and go for your dream business move away from wantrepreneur and become a startuppreneur, believe me Nigerian are ready to buy your solution.

Thank you for readying

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