I have a friend who has been in the auto parts business in Nigeria for more than two years, and when I returned to China this time, I asked him how his grades were, and my friend said that he now has a net loss of 600,000 US dollars per month, which is more than 4 million yuan, which is very stressful.
My friend has always been in the auto parts business in China, and his model is to take the goods in large quantities, lower the price and then supply them to auto repair shops. In the past, when business was good, making money was booming.
Now it is difficult to do business in China, the competition is too great, and the channels are becoming more and more transparent.
Two years ago, I worked with a company that was in the electrical business in Africa, and that company was in charge of investment, and my friend was in charge of the whole project.
When I first arrived in Nigeria two years ago, I saw business opportunities everywhere, and I told me that I could make money by doing some business in Africa, looking at his circle of friends in 2022: "Guangzhou's Chentian Market is world-famous, and today I came to Africa to be even more shocked, the market is large, there are many people, and the technology is super strong, I saw on the side of the road that there are directly changing engines, steering machines, and direct painting, it's really amazing, China has not seen such a spectacular flow of people for a long time!" ”
Compared with the high spirits at that time, this time I came back to share with me more rational thinking about the African market.
This year, the domestic individuals and companies looking for business opportunities in Africa can be described as a swarm.
The large number of domestic people has brought about the intensification of price competition. Originally, most of the domestic supply partners were found in Guangzhou, and now they find that the price of products in Guangzhou is no longer advantageous. There are fewer and fewer African merchants on the streets of Guangzhou, which is the concrete embodiment of this phenomenon.
I make bags myself, and I found a problem that makes people feel emotional. The price of materials quoted by the factory in Guangzhou is the same as the price of the whole package produced in some luggage industrial areas in the north. That is to say, 50 yuan is only enough for the cost of materials in Guangzhou, but 50 yuan can already give me a finished product package if I put it somewhere else.
Some people say that the products produced in Guangzhou are of good quality, good materials and good workmanship, which cannot be denied. But the products produced in the north, after years of training, are actually not bad in quality.
Many companies in Guangzhou are engaged in resale trade, and the trading companies want to earn a part of the profits, and such products are put in Africa to compete with some domestic counterparts, and there is no advantage.
My friend returned to China for a month, only stayed at home for two days, and found that some products were doubled by the price of goods in Guangzhou and the price of goods at the auto parts factory.
The past two years have really been a waste of time to sell in Africa with a product that doubles the price. It's no wonder that his team has a net loss of more than four million every month.
The losses incurred are mainly labor and rent expenses.
Whether it is office space, dormitory, or warehouse in Africa, it is a one-time rent of at least one year.
The team led by a friend has more than 300 people abroad and more than 200 people at home.
The salary of Chinese employees abroad is generally 20,000 to 30,000 a month, and the salary of local employees in Africa is not more than 1,000 a month, and some people are 4,500 a month.
In two years, tens of millions of losses to buy a sober understanding of the African market, the cost is high enough.
Of course, in the face of such a huge market, there must be business opportunities, but making money seems easy and simple to think about, but it is a professional field that needs to be deeply cultivated.
China has abundant products, perfect industrial chain, coupled with a group of people who are diligent and dare to break through and dare to go out, I believe that the infinite and wide world will have your place, come on!!
I am Li said, an online self-media worker, every day to share interesting and in-depth topics around you, if you have like-minded people, welcome to pay attention to the message, we will discuss the big and small things around you, people warm and cold.
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