Since 2012, when e-commerce giants Jumia and Konga made their heralded debuts in Nigeria, e-commerce has experienced exponential growth. The year 2020 alone saw the number of online shoppers in Nigeria reach a staggering figure of 76.7 million, impressive against the backdrop of a population of 206 million. If you’ve ever wondered how to start an e-commerce business in Nigeria, we’ll share the significant factors to consider in this article.
1. Research e-commerce models before you start an e-commerce business in Nigeria
The two significant models we’ll discuss are drop shipping and warehousing.
Drop shipping is an e-commerce model where the products listed on the website are not owned or warehoused by the seller. The seller purchases the goods from manufacturers or wholesalers only when he gets paid for taking orders for them on his website. So, he gets each item ordered from the supplier and delivers it to the customer.
An advantage of drop-shipping is the minimal startup capital required. With this model, you’re leveraging the stock others have purchased or manufactured to sell without buying any products.
Another advantage is the minimal risk involved. You’re not purchasing products for storage, so you’re not susceptible to issues like products decaying or losing value in storage. Fluctuations in the market price don’t affect you that deeply, either.
A disadvantage of using this model to start an e-commerce business is the potential unavailability of goods. You don’t purchase products in bulk, so you can’t control stock levels. Also, you’re at risk of getting orders on your website that you cannot fulfill.
Using the warehousing model to start an e-commerce business in Nigeria:
If you’ve raised substantial capital and are ready to plunge into the waters of e-commerce, then this model is for you.
Here, you own most of what you sell and store goods in a warehouse. Also, you’re less likely to have unfulfilled orders because you control your stock.
A significant disadvantage of this model is the high amount of capital required to purchase goods in bulk, rent and equip your warehousing facility, and pay staff.
If you’re trying to decide, an easy way to think about it is in terms of what level of financial commitment you can provide and what degree of control over stock you require.
2. Pick a niche
Unless you intend to be the next Konga or Jumia and sell almost everything, deciding on a specific niche for your e-commerce business is essential. It helps you know who your target customers are early, and once you know who they are, you can tailor your marketing efforts to that select group.
It also keeps you top of mind for your customers when they are thinking of making purchases.
For example, you want to start an e-commerce fashion business. Deciding on fashion is the first step, but what else? Fashion for whom? Men, women, or kids? Let’s assume you decide on women. The next question is, “What type of women?” professional working-class women? Pregnant women? Muslim women?
3. Use Glade Payment Links
Glade Payment Links help you receive payments from your customers easily. You can:
- Set up payment links in seconds, and customize your details and payment options.
- Offer customers multiple payment methods via one convenient link to pay quickly and conveniently.
- Send the link to your customers – via email, social media, WhatsApp & other messaging apps.
- It does not require additional infrastructure, a website, or code.
4. Use the Glade Payment Gateway
Glade’s payment gateway is an application that helps you receive or make payments on your website or app, to your customers.
Integrating the Glade Payment Gateway simplifies your payment collection process as with just a few lines of code, you’re able to sell and collect payments immediately.
5. Register your business on Glade before you start an e-commerce business in Nigeria
Before considering fancy things like a catchy social media handle, brand colours, or packaging materials, registering your business is the first step. Not only is it for your protection, but it is also required by law if you are operating a business in Nigeria.
You can easily register your business on Glade. When you register your business with Glade, we save you time and money by shortening lengthy processes and handling all paperwork.
It takes just 5-7 working days (subject to Corporate Affairs Commission guidelines and additional requests).
If you are ready to register your business, Open a Glade account to get started.
6. Open a business account on Glade
After registering your business, the next step is opening a business account. A business account makes your business look more credible and helps you receive payment from your customers faster.
On Glade, you can open a business account in just 5 minutes. When you open a business account with Glade, you get access to tools that will improve your productivity and help you grow. Such as:
- The bulk Payment feature helps you save time and money by enabling you to make payments to all your suppliers, locally and internationally, at once.
- Invoicing – Create and send a professional invoice to your customers and get paid instantly.
- A Payroll system that helps you schedule and automate staff payments quickly and seamlessly.
- Access to loans to grow your business, with funding within 24 hours.
- Expense management tools that help you manage your business inflow and outflow seamlessly.
Now that you are clear on the significant factors to consider when starting an e-commerce business in Nigeria, the next step is registering your business and opening a business account with Glade.