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ANALYSIS OF PROFITABILITY AND OPERATIONAL EFFICIENCY OF SHEA BUTTER MARKETING: EMPIRICAL EVIDENCE FROM IBADAN, OYO STATE
Abstract
This study examines empirically profitability and operational efficiencies in the marketing of Shea butter in Ibadan, Oyo State, Nigeria. Primary data were used for the study. Well structured questionnaires were used to obtain information from a total of 120 Shea butter marketers in three major Shea butter markets. Costs and returns analysis were used to determine profitability of the marketers while efficiency ratio, profitability ratio and operational efficiencies were used to examine the Shea butter marketing performance in terms of efficiencies measures. The results of the analysis revealed that marketing of Shea butter was highly profitable in the study area; but the marketers that perform the function of both wholesalers and retailers (wholesaler/retailer) had the highest operational efficiency level (85.8%) followed by the retailers (83.5%) while the wholesalers have the least (59.7%). Similarly, for every ₦100 invested in Shea butter trading in the study area, wholesalers/retailers, retailers and wholesalers realized ₦ 76.7, ₦ 51.4 and ₦ 23.2 respectively while total gross margin per quarter of wholesaler/retailer and wholesaler were ₦ 1,017,000 and ₦ 922,000 respectively. The retailer has the least gross margin of ₦ 890,000 per quarter. This positive and size of profit obtained for each Shea butter marketing institutions is an indication that these institutions were able to recover their operating expenses. Hence, Shea butter market is profitable and efficient.
ANALYSIS OF PROFITABILITY AND OPERATIONAL EFFICIENCY OF SHEA BUTTER MARKETING: EMPIRICAL EVIDENCE FROM IBADAN, OYO STATE
