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How To Start a Profitable Recharge Card Business in Nigeria

Starting a Profitable Recharge Card Business in Nigeria
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How To Start a Profitable Recharge Card Business in Nigeria

Everybody needs an extra source of income to sustain life; it is always a very difficult task starting a business, however, with the right knowledge and skill, your chances of success are higher.

If you are thinking of starting a recharge card business, or are starting one now, this article will help you avoid some obstacles which otherwise might stand in your way.

I will discuss the basic principles of starting a profitable and sustainable recharge card business in Nigeria. The ideas and principles discussed in this article not only form the foundation for starting a recharge card business but also apply to businesses in all sectors and even outside of commerce.

Statistics of GSM and Internet penetration in Nigeria

Profit In Recharge Card Business

Different Business Models in Recharge Card Business

Requirements for Starting a Recharge Card Business

Tips To Incorporate When Selling your Recharge Card Business

Statistics of GSM and Internet Penetration in Nigeria

According to the Nigerian Communications Commission July 2021 data on subscribers for GSM services, there are 187,470,860 active subscribers on each of the licensed service providers.

Out of 187,470,860 active subscribers using a GSM phone, 139,384,180 use it to gain access to the internet.

With World Bank estimating the Nigerian population to be 202 million, the data shows that 92% of Nigerians use a GSM phone. Because of the sheer volume of communication most Nigerians make, the recharge card business can be quite profitable.

Profit In Recharge Card Business

The recharge card business is low-margin and volume-based. The profit on the sale of a ₦100 recharge card is within the range of ₦5 to ₦10, the scale of your profitability is dependent on the volume of cards you sell.

For instance, if you sell ₦10,000 worth of cards per day, and you make ₦10 per #100 card, your profit will be ₦10 x 100 (i.e there are 100, ₦100 cards in a bay of ₦10,000 cards) = #1000. 

If you invest more in the business and you sell ₦100,000 worth of cards per day, you will be making ₦10,000 per day and ₦300,000 every 30 days.

In addition to your capital and rate of production, there are a number of other factors which influence how much you can make from business eg. marketing, distribution channels, customer service etc.

Different Business Models in Recharge Card Business

Let’s explore the different ways that a recharge card business can be run. The main difference in the models is how and to whom they deliver their services. 

There are three business models in the recharge card business

Recharge Card Dealers: Recharge card dealers work directly with mobile phone operators (MTN, GLO, 9Mobile, Airtel).  They are given licenses from a service provider that will allow them to create recharge card pins. Dealers sell to the wholesalers, then wholesalers sell to retailers. A recharge card dealership is not easy to start because of the huge capital involved.

Recharge Card Wholesalers: These are the middlemen between the dealers and retailers in the distribution chain. They buy directly from the dealers at a reduced price and sell to the retailers who in turn sell to end-users.  

Recharge Card Retailers: These are the sellers in the value chain that interact with everyday buyers. Retailers buy from wholesalers at a cheaper price and sell to end-users at the card’s surface price – the price written on the card. The average profit they make per day is between N5,000 to N15,000.

Requirements for Starting a Recharge Card Business

What you need to start a recharge card business are:

1. A desktop or laptop computer.

2. Internet access.

3. Printing software.

4. Printer.

5. Recharge PINs.

6. Capital.

Tips To Incorporate When Selling your Recharge Card Business

Choose Ideal Location: Location is one of the 4ps of marketing. The ideal location for your business is where the market meets the road. If you’re selling recharge cards to direct consumers, it makes sense to choose a place where there are lots of people who might want recharge cards. 

Customer Service: Customer service means understanding your customers and treating them with the utmost respect. It is the reason why people will choose you over other competitors selling recharge cards. To ensure continual retention of your customers, you have to pay attention to how you serve them.

Sell good products: The only way to retain the trust of your customers is by delivering on your promise of good quality. Ensure your recharge cards are always in good condition when you sell and do not sell a used recharge card to consumers, there is no faster way to ruin your business than this.

Conclusion

Using recharge cards is an essential part of our everyday lives which makes the recharge card business extremely easy to run, and effectively loss-proof. 

Which recharge card business model catches your eye, let us know in the comment section.

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