4 Ways Your Business Can Cope with the Effects of the Fuel Subsidy Removal

Fuel queues are back on the streets of Nigeria, and are putting panic in the hearts of the citizens. This time around, there’s a more stressful angle to these queues; the increase in the price of fuel that caused these queues is here to stay, thanks to the subsidy removal that was announced by the federal government on the 29th of May.

For business owners, the effects of this hike have even instant.

• Delivery fees have instantly skyrocketed, and most business owners have talked about how they’re already experiencing as high as a 300% increase in delivery costs.

• The prices of items have started to climb up already, thereby causing business owners to consider an increase in the price of the products they sell.

It doesn’t end there. There are other effects which haven’t even been immediate, but will definitely become prominent in the coming weeks.

• The cost of importing items to sell will increase, thereby affecting the prices of the products being sold.

• Purchasing power of customers will reduce, and more customers will likely reduce their frequency of shopping, thereby affecting the revenue of these businesses.

But, it’s not all doom and gloom. We recently spoke to some business owners who have been putting their heads together in our Telegram community channel (which you should absolutely be a part of!) and they gave some really innovative solutions that can help business owners cope with this period, and the effects the subsidy removal and fuel hike will have on their businesses. Let’s dive in!

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This was what sparked the conversation.

Business owner Serah Kassim had this to say:

1. Pairing deliveries for the same location; people in that location can pick up from one person and get a discount.

2. Advising customers to come pick up from the store if they would prefer that option.

3. Avoid incurring new expenses at the moment; automate everything you can and reduce having to pay for manpower for things that you could easily automate.

Related: 10 Ways to Get more Customers & Increase Sales for your Business

4 Ways Your Business Can Cope with the Effects of the Fuel Subsidy Removal - What You Should Do!

Here are other things that I think could work:

1. Consider delivery services that use bicycles:

Most delivery companies have started adopting bicycles as a way to introduce faster deliveries and lesser spending on fuel. Finding one of these companies and using bikes as a delivery option could be a great way to maintain current delivery costs, and not have to incur more expenses for your business or customers.

2. Take your Business Online:

The cost of running a physical shop right now will increase drastically; it’s the best time to take your business online if you can. An added advantage of this is that you open your business up to more customers by targeting them where they are mostly, which is on the Internet.

3. Use Public Transportation as much as you can:

Taxi fares have also skyrocketed, and will only likely continue to increase. Instead of running errands or deliveries with taxis, consider using public transportation for errands that you can use them for.

4. Combine deliveries and plan ahead of time:

You’ll be saving a lot more money if you combine your deliveries and plan them out carefully. If you have a couple of customers in one area, consider delivering to them all on the same day, thereby saving the amount it would have cost you to deliver from one end of town to another. This should be discussed with your customers first, so that they are aware, and do not simply think that you’re delaying their delivery.

Conclusion

Knowing how the fuel subsidy removal might affect your business can be a bit scary, but it helps to start considering other possible ways to run your business without letting it affect your output, sales and profit. You might think that increasing prices instantly might be the way to go, but that could scare off your customers. To avoid losing your customers while you get enough time to prepare them for possible increases in prices, you can try out the methods listed above to help your business cope with the effects of fuel subsidy removal.

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