How profitable is fabric business?

If you walk past ten shops in the market, there is a possibility that at least two or three sell fabric. Fabric selling is one…

If you walk past ten shops in the market, there is a possibility that at least two or three sell fabric. Fabric selling is one of the busiest and profitable services rendered in any mainstream market. Daily Trust Saturday interacted with a few fabric dealers to understand the activities of the business.

Depending on how you intend to start, fabric selling is one of the most profitable businesses one can invest in.  It’s interesting to know that it is a business that constantly moves as fabric is regarded as a necessity by many. 

This is because items such as personal clothing, uniforms (school, staff, security), bedsheets, duvets, table cloth etc are always in constant demand, therefore the rise in demand for fabric.

One of the fabric dealers Mr Solomon Chinonso who spoke to Daily Trust Satuday said he served his master for 8 years in Wuse Market before starting his own business.

“In this business, the profit comes out quickly and you’re at an advantage when you’ve been trained by someone. It’s important that you at least work with someone who is grounded in the business for a period of time,” he said. 

Mr Chinonso has been selling fabric for a period of 10 years. He deals in materials like Khaki, cashmere, suit material, senator material, Turkish materials etc. 

“Most days, business doesn’t move the same. Some days are slow while some are relatively good. On a bad day, the least we get is about 10 customers. On a good day, we can have up to 30 – 50 customers.”

“The prices of materials vary depending on the quality. Some sell for N2000 or N3000 per yard. We have the ones that are 6 yards for N10,000. Regardless of the material, on a slow sales day, we could sell 200 yards of clothing and on a good day, we could sell 500-700 yards,” he added. 

However, Mr Chinonso noted that due to peculiar reasons, it’s really hard for business owners to enjoy the profits of the business. One of the issues which poses a big threat to his business is the current hike in foreign exchange.

“Fabric business is one without season therefore sales and profit tend to be consistent. However, with the high exchange rate, sometimes we can’t sell certain materials at the price we want to because we don’t want to lose our customers.

“If we are to consider cost price, shipping fares, custom duty and logistic fares before adding the profit, when we eventually add it, customers will complain that’s it’s too high. There are so many instances where we can’t really make enough gain as we are supposed to and so end up running at a loss,” he said.

Other reasons he gave why some dealers don’t enjoy their profits are high cost of rent and poor electricity.

“My shop rent is N3m, which is really high for a market and the light situation here is very terrible. Because I need my shop to be conducive enough for my customers, I run my generator all through the day and that costs me nothing less than N6,000 daily,” he added.

Another fabric dealer, Shafiyu Abubakar, said he and his father have been dealing in fabric for eight years. In their shop, they sell a variety of Ankara and lace fabrics which range from N2000 per yard depending on the material. There are some which go for N20,000, N60,000 and even as high as N320,000 for six yards.

According to Shafiyu, their customer head count is about 20-40 people in a day and total sales in a day runs into hundreds of thousands.

Unlike Solomon who raised the issue of foreign exchange as a challenge, Shafiyu mentioned that though the exchange rate fluctuates, their business is not severely affected as they buy directly from the source so it comes fairly cheap.

“If the material is an expensive one, then the price will definitely be high. But we try not to add too much gain because we deal directly with the manufacturers and so purchase the materials at a fair price,” he said.

However, Shafiyu’s dad said he would like his son to take over his business. “Whatever profession he decides to choose is up to him, however this is the business that has sustained the family so him taking over won’t be a bad idea.”

Another fabric dealer, Mr Fabian Uchenna, tells a different story from Chinonso and Shafiyu as he started his business solely by himself after raising enough capital. Starting the business was capital intensive because at the time, funds were not much of a luxury for him.

“Starting this business doesn’t come cheap especially if you want to start here in the market. The starting price for rent here is at least N1.5m. We have not even spoken about money to buy the materials and then having it shipped to your location. When I started, I used almost a total sum of N500,000.”

Unlike Mr Chinonso who focuses mainly on male fabric, Fabian deals in all kinds of material including chiffon, crepe, cotton, silk, khaki etc.

According to him, he chose to sell in Wuse market because of its central location and calibre of customers he could attract. He also believes that being in the market is the best place for a business like his.

“Before the recession, you’d have customers who will come in and buy fabrics worth millions in a day. Sometimes, it could even be just one customer buying fabrics which will sum up to a million naira or more.

“However, things are not the same anymore. Now, we deal with at least 30-50 customers daily,” he added.

“Many times, customers complain about being cheated when prices go up but the reality is, as a heavy importer, there are so many dues that have to be paid and if you don’t add all that to your selling price, it would be difficult to make reasonable profit.

“Imagine purchasing goods worth a million naira or more, custom tax may run into N500,000, you still have to ship it down from Lagos to Abuja which may cost you another N100,000 – N150,000 and when it arrives, you have to hire a vehicle that will take it to the warehouse which may cost another N15,000 – N20,000, mind you I didn’t even add the international shipping.”

“If you don’t find a way to factor in all these expenses when setting a selling price, then your business and personal finances will be running at a huge loss.” 

In Kano, fabric selling has proven to be profitable for those who have ventured into the business.

Abdulhadi Ahmed who has been selling fabric for about 28 years in Kano said prices are adjusted according to the market prices from distributors.”

Abdulhadi, who currently sells mainly men’s fabric, originally started with the popular women’s material known as ‘Atampa’ and then moved on to selling veils and laces.

“I started in Hajj camp market with women’s fabric before I decided to focus on men’s fabric. About five years ago, I was able to open another shop in Kwari market, which is the biggest textile market in West Africa.”

Starting up his business 28 years ago wasn’t difficult because the naira had more value then, he said. “I started with N25,000 before I expanded and decided to focus on just men’s fabric. Today, I deal mostly in wholesales. There are days I supply just to customers and some days I attend to family and friends who may like a fabric I post on my WhatsApp status.

“I sell out over 200 yards of different varieties of men’s fabrics and the cheapest goes for N1,500 per yard on wholesale while on retail, the starting price is N2,500 per yard,” he added. 

Most of his fabrics are sourced from Dubai and China which majority of the fabric production work is done in India and Bangladesh.

However, importing the fabrics often proves a challenge as the constant hike in foreign exchange is an issue that affects his business.

For a country with a huge demand for fabric, Abdulhadi noted that Nigeria doesn’t produce fabric because of lack of proper infrastructure. “The main reason why textile production won’t work here is because of lack of stable electricity, proper management and maintenance. No textile company produces in Kano anymore. If textile production is to be revived, then we need to address our electricity issue,” he added.

Hauwa Shehu Ashaka is another fabric dealer who’s been selling fabric for over 12 years in Kano. She started her business from home before getting a shop in 2017. 

With N100,000, Hauwa was able to start selling fabric.  She sells super wax exclusive, brocade, getzners, holland wax etc, and her prices range from N8,500 to N95,000. 

According to Hauwa, before the dollar crisis in late 2017/2018, she used to source her fabric from the UK. However, when the exchange rate became very high, she had to source from other countries like India, China, and Cotonou.

“In this business, there’s nothing like a slow season because there’s always demand for fabric. For women fabrics, it’s an all-season affair and because of ceremonies, I can sell up to 30 pieces in a day.” 

With online shopping becoming popular by the day, it’s also easy to source from fabric dealers on different social platforms such as Instagram, twitter and Facebook. 

Bilkisu Mahmoud is an online vendor who has been selling fabrics for four years. She sources her material from Kano, Lagos and sometimes Cotonou.

“I think I started with less than N60,000 in 2019. Then, I’d advertise the goods on my WhatsApp status or Twitter and when I get an order, I’ll use the money to get the items from my supplier and then I’ll get paid after delivering the items.

At first it was really challenging and risky, because sometimes people would change their minds after I got the fabrics but I made a few changes afterwards,” Bilkisu said.

“I have customers who are into ready to wear. These set of people can buy up to 20 pieces of material or more. Just recently, I made a dispatch of 17 and 22 pieces of material to two different customers in Abuja. But if it’s personal shopping, it’s mostly between one to three items,” she added.

Fabric business is a very good and lucrative business, the CEO, Faite Marque Ventures, Abimbola Adepoju-Bonire told LEADERSHIP WEEKEND.

Report from Statista revealed that, revenue in the fashion/fabric business segment is projected to reach $1.70 billion in 2023, adding that, revenue is expected to show an annual growth rate (CAGR 2023-2027) of 10.72 per cent resulting in a projected market volume of $2.56 billion by 2027.

Adepoju-Bonire averred that Nigerians buy clothes, adding that, “they always want to look good at all time. Just the way, people cannot do without food, most Nigerians cannot do without clothes as it is one of the basic necessities of life. 

“Despite the hash economic, Nigerians must buy clothes, if they are not doing naming ceremony, they are doing graduation ceremony; if they are not doing graduation, they will be doing wedding and sewing aseobi; if they are not doing wedding, they are doing burial, if they are not doing burial, they are doing photo shoot and church programmes as well.

“It is a profitable business. It is a business that you will do and earn profit at the end of the day. Although it is capital intensive, but at the same time, you will have a good return on investment.”

Nitty-gritty Of Fabric Business 

Before one can venture into the business, he or she must have passion for it. “Passion is the first thing that will motivate you into doing the business. You must also be a fashion lover. You must love fashion and love to look good as well. You must also know the latest fabric designs. For instance, I love looking good and it gives me pleasure to see people around me looking good as well. I have passion for fashion. I know when there is the latest fabric in the market, and I keep my customers updated. 

“You must also understand the market very well. I stand out in the fabric business in Abuja because I understand the market. You must know the type of fabric that people in different location love. For instance, when I was in Lagos, I sell a lot of lace, because the people in Lagos love lace a lot. However, when I moved to Abuja, I noticed that Abuja people like light fabrics, they like blinks, beaded fabric, embroidery and luxury. 

“The first thing I did was to understand the market very well.  I then move my business in that direction. It didn’t take me much time before I started having customers.

“Next, is to be innovative. I don’t just sell fabric, I can bead and put stones on clothes, I can do embroidery as well. I can also sew clothes. That makes my fabric cheaper than others,” the CEO revealed. 

Starting Fabric Business In Nigeria 

Though, fabric business is capital intensive, especially, when one is a wholesaler, Adepoju-Bonire stated, that  one can decide to start small.

“Whichever way, you can be rest assured that there is huge profit. I didn’t start my business with big money, I started it 15 years ago with just N3,500. I remembered going to Yaba, to buy chiffon which was sold for N100 per yard. I will then sew them and sell them. 

“In the same way, you can start the business with N20,000 and with passion and help of Jehovah, your business is sure to grow. My N3, 500 that I took to yaba, grew to N17,000 within one week, which later grew to about N34,000. I then decided to go to Aba, to buy in bulk. That is how I got to where I am today. So, you must not start with big money. Just have passion for fashion and leave the rest for Jehovah,” Adepoju-Bonire averred.

Challenges 

Having access to soft loan is a very big challenge, the CEO, Faite Marque Ventures disclosed, adding that, the economy situation is also affecting fabric business. Adepoju-Bonire averred, “the increase in dollar rate, really affected us. Most of us import fabrics and must dealers request dollars. We do not have access to forex, so some of us resort to black market to buy dollars, which is very expensive, hence the reason why fabrics are so expensive. Sadly, when fabrics are too expensive and the economy is bad people will not buy.”

She however pleaded with the Central Bank of Nigeria (CBN) to grant the fabric industry access to soft loan.

“Government should also formulate policies that can help the economic to grow. Once people have money, they will look for ways to spend it. So I plead with government to make the economic stronger,” Adepoju-Bonire stated.

Advice

“You must have strong passion for fashion. You must have the passion to make people look good. You must be hardworking and be humble, because you will meet customers who don’t have manners. You must be able to accommodate them.

“You must not be selfish. You customer can tell you that they need a fabric at times that may not be favorable to you. Ensure you satisfy them accordingly. Don’t cut corners. I don’t sell fake and I don’t deceive my customers, that is what makes me stand out in Abuja

“Don’t give up. Don’t wait until you have millions of naira. If it is N40,000 that you have, start with it. With God’s help and when you show personal interest in your neighbors and friends, you will excel in the business,” she advised.