Tuesday, September 23, 2014

How to set up an Online Retail Store in Nigeria

The Nigerian Online Retail Store Business is one of the fastest growing business opportunities you can find at the moment in Nigeria. A recent study done by one of Nigeria’s leading management companies – Philips consulting – showed that Nigerians spend more than N1.3 billion monthly on online shopping with Jumia enjoying 38% of the market and Konga coming second with 26% among others including dealdey, Olx and Kaymu. These are the top 5 online shopping malls in Nigeria and the funny thing is only 8% of Nigerian internet users have actually shopped online before. So imagine how much sales they could be doing if 40% of the estimated 48 million active Nigerian internet users were to shop online just once a month and spend not less than N10,000 on each transaction, we would be talking N19.2 billion per month in sales.

What you need to start an Online Retail Store in Nigeria
So you want to set up an online retail store and you’re wondering what you need to take off? Take note;

Good and well stocked Inventory
If you don’t have a product but put it up for sale, that is fraud and could land you in big trouble. So ensure that you have the products before displaying it for sale with pictures of course and price as well as product description among other details.

A well Optimized Website
It’s not enough to have a website, ensure you have one that not only ranks well for google searches but is also designed in a user friendly way. Customers shouldn’t waste their time whenever they visit your website.

Safe and Secure Payment System
If your customers pay for your goods would they lose their money? Can hackers access your database? Will their transactions be secure? If you can safely answer these questions and win their trust, you’re good to go.

An effective delivery system
After paying for your goods, would they be able to get prompt delivery – not when you state delivery within 5 days on your website but it takes 2 weeks for it to reach the customer.

Benefits of Setting up an Online Retail Store for the Nigerian Market
What are some of the things you stand to gain from owning an online retail store?

Low overhead cost
You don’t need a sales boy/girl, a cashier or even book keeper with an online store that means less money paid as salaries, no need for rent as you can keep your goods in your house. It also runs on auto pilot except for the part where you have to answer customer enquiries or deliver their goods.

Higher Profit Margins
With less overhead costs your profit margins increase so you can beat your chest that compared to a competitor who owns a shop where he/she pays N300,000 a year as rent or hires a sales person to work with you can keep that money for yourself as profit.

Strategic Partnerships
Websites like Kaymu and Jumia have arrangements whereby verified merchants can actually sell their products online through their website. So you can benefit from that partnership and increase your sales potential.

Runs 24/7 so you can do other businesses too
When you’re doing this business you can diversify and run other businesses as well. You may have a regular job from Mondays to Saturdays and still run this business. The challenge though would be with replenishing your stock.

Business Opportunities in Nigerian Online Retail Stores
You’d be amazed at how quickly Nigerian online businesses are transforming

Nigeria is going cashless really fast
According to a report monitored on Businessday, Nigerians transacted of about N38 billion in 2013 using POS terminals. That is against N2.4 billion recorded in 2011 and N14 billion in 2012. POS terminals are not the only cashless option available, there’s mobile money, internet banking, electronic funds through quick teller and now paypal through first bank. Come back in 2015 and these figures would be very little to compare with.  

Many Nigerian consumers have smart phones and mobile devices
More than 60% of middle income earners own and use smart phones in Nigeria. That’s a staggering 11.5 million people but less than 8% of them are active online shoppers. The challenge is getting more people to come on board and it’s only a matter of time before that happens.

Very tight work schedules for Nigerian workers
Many Nigerian workers are busy during the weekdays and are too tired to go shopping during the weekends, so they opt for the next best thing which is online shopping. It’s a trend that won’t die anytime soon.

Greater convenience
If all I have to do to buy what I want is to browse my phone and make a purchase on an online shopping website why do I need to stress myself driving from home or work through traffic, under the hot sun or in the rain, inside the congested market with so much noise and filth then return home again? Good man hours stressing myself meanwhile my goods just arrive at my doorstep when I shop online.

Variety in shopping
One thing shoppers love is variety, they want to see as many available items as possible rather than be forced to make do with what is before their eyes.  Online shopping gives a consumer plenty of options to deal with making him/her feel they’re getting value for money.

Challenges of Shopping Online in Nigeria
Well it’s not all rosy there are still a few problems to with such as;
Cybercrime: how do you protect yourself and customers from internet fraudsters?
Cost effective marketing: how do you reach your target market without spending too much?
Stiff Competition: when you start there are at least a dozen others who are probably doing exactly the same thing like you.

Start-up Summary
Customize Shopping Website – N100,000
Inventory – N300,000
Cash at hand – N50,000
A Smart Phone (to constantly monitor sales and respond to customer enquiries) – N15,000

Total: N465,000

Want to start up an online business in Nigeria and need a comprehensive business to guide you from start to finish? Give me a call 0803 206 4106 or email: paulonwueme@gmail.com