Nanocomposites made of polypropylene reinforced with exfoliated graphite nanoplatelets (xGnP™), are fabricated by melt mixing, polymer solution and coating. Coating is a new compounding method proposed in this research, where xGnP and PP powder are premixed in isopropyl alcohol using sonication to disperse the xGnP by coating individual PP powder particles. It is found that the coating method is more effective than the polymer solution method widely used, in terms of lowering the percolation threshold of thermoplastic nanocomposites, and enhancing the probability that the large platelet morphology of xGnP can be preserved in the final composite. The research reported here provides an understanding on how the compounding method used during the fabrication of nanocomposites is important to achieving the optimal flexural properties, electrical conductivity and percolation threshold. This method should have wide applicability to all thermoplastic matrix nanocomposite systems.