If you are here to learn how to start a dropshipping business in Nigeria, you’ve taken a step in the right direction. In 2020, one of the lucrative businesses to begin in Nigeria is a dropshipping business. The interesting thing about dropshipping business is that you can start with little or no capital at all.
With the basic knowledge of shipment and dealing with suppliers, you are halfway to becoming successful in the business. If you are looking to start a business but don’t have a product to sell, dropshipping allows you to sell products you don’t own and make profits while at it. In dropshipping, you must be familiar with top-selling products to dropship and how the business runs generally in Nigeria.
In this article, you will be exposed to a step-by-step guide on how dropshipping business works and how you can take advantage of the business here in Nigeria. So, sit tight and learn.
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What Is Dropshipping?
Some people have heard of the word ‘dropshipping’ but don’t know what it means. Basically, dropshipping involves having an agreement with a manufacturer to market its products on your online store. Meanwhile, the products will remain in the store of the supplier while you’ll only have the pictures on your website or online store. Once someone orders the product, you’ll receive the money, and place an order for the product directly from the manufacturer or from their website.
Thereafter, the supplier will deliver to your customer. It’s that simple. So, you can see yourself as the middleman between the supplier and the customer. You don’t need to see or touch the product. Once you have the descriptions of the product and a matching image, you can start trading immediately.
If you are sourcing for products on AliExpress, you may not need to contact the seller or supplier. All you need to do is place the order on AliExpress and input your customer’s details as the buyer. AliExpress will, in turn, deliver the product well packaged to your customer without the customer knowing it’s from AliExpress. Ali Express has a dropshipping plugin called ‘AliDropship plugin’.
This plugin is primarily designed for dropshipping. With this plugin, you can import product descriptions, images, and the likes from your supplier website to your store. Also, when a product is sold on your store, it automatically sends the customer’s details to your supplier. You can then go ahead to pay the supplier. Thereafter, the supplier will send the product to your customer’s address and the customer wouldn’t know it’s from a third party.
The Parties Involved In Dropshipping Business
In dropshipping business, there are three major people involved – The manufacturer, the retailer (you), and the customer.
The duty of the manufacturer in this business model is to create products, replace bad products, send products to customers on behalf of the retailer and restock products. The manufacturer sells to the retailer at a wholesale price that allows the retailer to make a profit.
The role of the retailer (you) is to market and sell the manufacturer’s products on your website under your brand name. You’ll be the one to handle the shipping costs and set the prices for the product. Once an order is placed, the retailer is responsible for tracking the progress of the delivery and ensures the customer gets the products they ordered for as at when due.
The customer, on the other hand, places an order for the products on the retailer’s website and they also contact the retailer when there’s any issue with the products.
Is Dropshipping Profitable?
This may be one of the questions on your mind right now. Actually, dropshipping is one of the lucrative businesses you can start in 2020 because of the low capital investment. It is a cheap business idea that gives you room to scale gradually and become big.
Additionally, you are not responsible for the shipping costs and manufacturing, so you can quickly calculate your profit once a product is ordered from your site.
Furthermore, the basic need for this business is a website, and today, you can set up an online store with little or no cash.
As you continue reading, you’ll discover how straightforward and profitable this business is.
Why You Should Start A Dropshipping Business
There are several reasons why a dropshipping business is a great idea especially for someone looking for a side hustle. Here are the major advantages of starting a dropshipping business:
1. You only pay for products
Dropshipping eradicates the headache of creating your own products, maintaining inventory, paying employees, packaging, and shipping products. All the stress will be handled by the supplier and your job is to get customers and earn a profit while at it.
2. Location flexibility
There are some businesses you can’t start without having an office space or physical location. Like I mentioned earlier, with dropshipping, you can work anywhere as long as you are connected to the internet and have your electronic devices with you (laptop or mobile phone).
3. A good way to venture into entrepreneurship
If you’ve never been a business owner, dropshipping is the easiest way to start. Other than having an online store, getting a good supplier and having a secured payment gateway, there’s nothing left to worry about. With just few clicks, your business is up and running.
However, this doesn’t negate the fact that hard work is needed to scale the business.
Can You Buy A Dropshipping Business?
The answer is yes. Rather than starting from scratch, you can easily find a dropshipping business for sale on Exchange. Basically, Exchange is a marketplace for Shopify stores for both people looking to invest in a fully-functioning business and those that want to skip the building phase and start directly with marketing. You can see that Shopify has made life easy for you.
On Exchange, you will find great collections of online stores and dropshipping e-commerce businesses at different prices. There are different niches that will catch your attention. So, if you are looking for a dropshipping business to buy, Exchange is the way to go.
However, when buying any dropshipping store on Exchange, consider the design, cost, how long the website has existed, how much money it has made, how popular the niche is, and other relevant details.
How To Start A Dropshipping Business
In five simple steps, you will learn how to start a dropshipping business almost immediately.
Step One – Decide On The Products You Want To Sell
First and foremost, decide on the product you want to be dropshipping. It is very important to research the type of product to dropship. Preferably, choose a specific niche you want to be known for.
For instance, you can deal with electronic devices or wears. That way, people know they should contact you when in need of such products. Just like every other business, it takes a lot of hard work to scale a dropshipping business. Therefore, it is always advisable to select a product you are passionate about.
More than that, also ensure there is a market for the product and you can make a profit selling the product. Additionally, research about the quality and durability of the products you want to dropship.
Remember that you’ll not see the products before they are delivered to your customers. So, ensure to check the reviews and the authenticity of any product you choose.
Check out the platforms below when selecting a niche:
Oberlo saves you time by creating a list of trending products you can invest in. Overtime, they have been able to identify winning products. Some of the top-selling products identified by Oberlo are Jewelry, Fashion, Fitness, Beauty, Tech, Purses, and backpacks. On Oberlo, you can check out the order volume for products to help you understand how popular a product is.
2. Google Trends
Since many people trust Google’s submission on several things, you can as well check Google Trends to know whether the niche you are interested in is on an upward or downward trend. Importantly, check the search volume as some products can be on an upward trend but have low search volume.
3. Ubersuggest’s Keyword Tool
This was developed by Neil Patel. Ubersuggest is a keyword finder tool that helps you to identify the best keywords you can use on your website based on how well they are been used.
Step Two – Research Your Competitors
Once you’ve selected the niche you want to operate in, the next thing to do is to research your competitions. Find out the people already in that niche, their pricing, and sales strategy.
There are several ways you can research your competitors:
- Enter the name of one of the products you want to sell on Google and take note of the brands that come up first depending on your location. You can use SEM Rush or Ahref to get information about search results in different locations across the world.
- Check social media for brands that are into your kind of products. On Instagram, you can search using specific hashtags. You can also browse Facebook ads within a niche and social media pages for top brands. Check how they market their products, how much engagement they get, and what makes people patronise them.
- Check Alexa or SimilarWeb to find niche competitors that you may not see on general search results
Competitors’ analysis will save you from making unnecessary errors and help you know the right strategy to employ.
Step Three – Choose A Reliable Supplier For Your Dropshipping Business
This is one of the most important decisions you will have to make in the dropshipping business. The products belong to the suppliers and you’ll need a good knowledge of the supplier’s capacities. Find out if they can be relied upon for a long time so that they don’t stall your growth process.
One of the suppliers you can trust in Nigeria is AliExpress. AliExpress makes it easy for you to spot a good seller. Before selecting a seller, check their score and rating. Try as much as possible to avoid sellers below a 90% rating.
Most people involved in the dropshipping business in Nigeria import their products from overseas, especially China. This is because the products are cheap and you can make a huge profit on the products compared to Nigerian sellers.
However, if you have a reliable seller in Nigeria, you can as well kickstart your business with them. Otherwise, Alibaba, AliExpress, or 1688.com are your best bet. Alibaba and AliExpress deal in wholesales products but you can get those products at a cheaper price on 1688.com.
So, all you have to do is place your order through them and they’ll handle the logistics within Nigeria. You must, however, take note that the shipping process with these establishments is long and this is one of the things to consider when you begin. Ensure the delivery time you give to your customer is in sync with AliExpress’s time.
You can also find good suppliers on Oberlo platform. There you’ll see reviews, ratings, and how long the supplier has been on the platform. Come up with a long list of suppliers and begin to ask them important questions like minimum order quantities and shipping times.
The best way to test the service of your supplier is to place an order from them yourself and compare their product quality, packaging, customer service, and other relevant details.
Step Four – Set Up Your Dropshipping Business Platform
Actually, there are several ways to set up your dropshipping business store.
1. Sign Up For Shopify
Shopify is one of the biggest ecommerce website you can find. There are features, themes, tools and resources that will make running your business online easy. You can connect with someone using Shopify to sell to walk you through the process.
Shopify gives you the opportunity to build a website under a few minutes. Within 30 minutes, you can create an online store on Shopify and start advertising your products.
With Shopify, you can focus on branding and marketing while they help you manage your store and give you access to their array of customers.
Interestingly, Shopify gives you a 14-day free trial before you pay for the subscription. So, you can make a profit within the 14 days before subscribing.
2. Use WordPress
WordPress gives you the opportunity to create a website without knowing anything about coding. As a matter of fact, you can open a free WordPress site for a start. But the domain name will have wordpress.com at the end.
However, when you pay for the website, the extension will be removed and you will have your preferred domain name.
If you don’t want to use WordPress, you can create and design your own or paying a web designer to get one done for you. Importantly, you will need to get a domain name, especially when building a long term brand. Preferably, get a .com domain and ensure it has a keyword that can be easily seen when searched.
3. Install Oberlo
Basically, Oberlo dropshipping allows you to find products online that you can sell the same day. It is advisable to aim for 10-25 products when starting out because it may be difficult to write out the descriptions for much more than that. Once you get your preferred products, post them on your website with perfect descriptions and prices, and move to the next stage.
Other platforms that help you create an online store are Jumia, Konga, Kaymu, and Dealdey.com.
Step Five – Promote Your Dropshipping Business
Marketing is the lifeblood of any business and without it, nobody can discover your online store. You will need to be all over your prospective customer’s faces by advertising your products to them.
You can start by opening accounts on several social media platforms. Social media allows you to run ads on your products to draw your client’s attention.
Facebook and Instagram are great platforms to start. Run paid ads targeting your customers. The DIY; A Practical Guide To Running Instagram Ads will guide you to set up your ads. Once they buy from you, they would keep patronising you if they are satisfied with their first purchase.
Other ways to market your product are to reach out to people selling the products on a small scale here in Nigeria and offer to supply to them at a cheaper price since you’ll be ordering in wholesale. There are other channels like:
- Word of mouth
- Google ads
- Content marketing
- Email marketing
- Influencer marketing
- Retargeting ads.
Once you start marketing your products, you will discover that some marketing channels are more successful than the other and you can choose which to focus on and which to spend less on.
Challenges Of Dropshipping Business
1. Issue of Payment Gateway
This is one of the major challenges for online businesses in Nigeria. But, this should not be a setback if you know the right way to go about it. There are two widely used payment gateways in Nigeria that have proven to be trustworthy.
Paystack is trusted by many businesses in Nigeria. Before you can use Paystack to receive payment internationally, you’ll need to register your business with CAC and create a corporate account with your business name.
This is widely used all over the world. You can receive payment from across the globe through this platform. However, you cannot use Stripe in Nigeria by default. You’ll have to register your business in the US to use it
Apart from these two, you can research for other payment gateways that can work best for you.
2. Shipping Costs
Another challenge you may face is the difference in shipping costs from different suppliers. However, with due diligence and good business sense, you can smartly consider all your costs before setting your price.
3. Unsatisfactory Deliveries
The mere fact that you cannot see the product before it gets to your customer makes dropshipping business risky and dicey. If there’s any contradiction in customer’s orders, you will be held responsible. To avoid this, ensure the product you are advertising on your platform is tested and trusted.
In conclusion, some people make the mistake of not treating dropshipping as a business. If you don’t treat it as a full-fledged business, you may never get the best result.
There you have it. Dropshipping business is a simple business model many Nigerians successfully operate and you can join the league now. We wish you all the best.
Are you thinking of venturing into a dropshipping business? Do you already run a dropshipping company? We will like to read your thoughts in the comments. Also, share this content with your audience if you found it useful.