Dropshipping is a desirable and profitable business that works in Nigeria.
Many people are hesitant to establish an internet business because of the high initial expenses and difficulties running a small business in Nigeria.
Are you in this boat?
If YES, this article will show you how to establish your own dropshipping business.
Starting a dropshipping business is a great way to break into the world of entrepreneurship.
Customers will purchase items from you, and you will set your prices and brand.
You don’t have to pay for inventory until a customer buys it.
If you’ve been looking for an ultimate guide on dropshipping business, then you’ve come to the right place.
What is Dropshipping?
Dropshipping is a type of retail fulfillment in which a store does not keep an inventory of the things it sells.
Instead, when a store sells a product, it purchases it from a third party and promptly ships it to the customer.
Dropshipping is a business strategy that allows a company to operate without keeping an inventory, own a warehouse to store their items, or even transport their products to their clients.
How Does Dropshipping Work in Nigeria?
In its most basic form, dropshipping is the act of selling goods without first purchasing or possessing them.
After you’ve made an internet store and put your goods into it, here is how it works.
When I say product, I’m referring to images and descriptions of the item.
It is because actual product stock is not required.
Once you’ve made your sales, all you have to do is contact your third-party supplier (the product’s owner) and send them your customer’s address and pay the supplier with the money you received from your buyer.
Your customer receives the shipment from the supplier.
You and your consumer went home happy.
If you’re going to source things on AliExpress, you won’t need to contact the vendor.
All you have to do now is pay for the items and fill up your customers’ information on AliExpress as the buyer.
Asking no questions, an AliExpress seller will package, process, and ship your product to your customer without them knowing it came from AliExpress.
Pros of Dropshipping Business
- Dropshipping allows you to start your online store without investing hundreds or thousands of dollars in inventory.
- You aren’t dealing with physical inventory, running a dropshipping business is easier to start and run, aside from finding a supplier and setting up your online store.
- You won’t have to worry about purchasing inventory or managing a storage facility, so your costs will be kept to a minimum. A laptop could run your dropshipping business from home!
- You don’t need to pay high rent because your dropshipping business can be run from almost anywhere as long as you have an internet connection.
- When you use drop shipping providers, most of the work is taken care of by them, allowing you to expand and scale with minimal effort.
Cons of Dropshipping Business
- Operating in a highly competitive dropshipping market means lower profit margins. Because it’s so simple to get started with low expenses, many merchants may launch their stores with extremely low prices to swiftly increase income.
- If you use multiple suppliers, as many drop shippers do, your shipping costs can become complicated because shipping costs vary from one supplier to the next. You also lose control over the quality and speed of your deliveries.
- When you work with suppliers, you also outsource some of your customer services. Someone else is designing and distributing a product that is an important part of the customer experience. The customer will blame you if something goes wrong with the supplier’s shipment.
Which Niche is Best for Dropshipping in Nigeria?
A niche is a market segment where a certain industry can be exploited to start a business.
Dropshipping is a business where you must select a niche to establish the type of store you want to open and the products you will sell.
Dropshipping AliExpress products necessitates a specific selection. It could be animals, automobiles, or motorcycles.
Your specialization will determine the product category you sell. It isn’t easy to find a niche.
Within the industry, there are many niches. Some niches pay off better than others.
As a result, rigorous research is critical.
If you’re unsure what topic to choose, here’s a list of dropshipping niches currently popular this year.
- Clothing and Accessories for Men
- Women’s Accessories and Fashion
- Health and Wellness
- Kids and Babies
- Home and Kitchen
- Phone Accessories
- Automobiles and Motorcycles
- Hair wigs and Hair Extensions
Steps to Starting Dropshipping Business in Nigeria
Here are the right steps to start a profitable dropshipping business in Nigeria:
1. Choose a Product to Sell
The initial step is to decide the product you’d like to sell.
Many people are tempted to sell anything they can get their hands on.
It would help if you kept in mind that dropshipping is a business.
Just like any other firm, you’ll need to conduct extensive research and develop a business strategy for turning a profit.
You can achieve this by seeking winning things to sell, for example.
Another thing to keep in mind when selecting your product is that you cannot simply start selling any product you come across.
Try to use Google Trends as much as possible to track the demand for such products.
It has to be in line with the market.
Demand for it must be reasonably high or at the very least consistent, and there should be little competition for it.
To be successful in this business model, you don’t need to have a lot of products on your website.
Your focus should be on popular products in a specific area.
There are two distinct methods for locating products to sell.
Manual product research is the first choice while winning product research tools, some free and others paid, are the second.
2. Find a Supplier
Doing business with the wrong supplier might be disastrous for your company, so don’t rush this stage.
Make sure you do your homework. Most drop shipping vendors suitable for Nigerian enterprises are based abroad (mostly in China).
Alibaba has become one of the most widely used online venues for locating and engaging with potential manufacturers and suppliers.
If your business grows quickly, ask lots of questions and learn about their manufacturing capabilities.
You’ll want to be sure they can scale with you.
One way to recognize a good AliExpress supplier is to look at their seller rating.
You shouldn’t choose a seller with less than 90%.
AliExpress is most likely the best option for anyone interested in dropshipping from Nigeria unless you have a credible Nigerian manufacturer or supplier prepared to collaborate with you.
All you have to do in this situation is promote their items and send orders to them, and they will handle the logistics within Nigeria.
AliExpress products are reasonably priced, allowing you to scale your business profitably.
The good news is that AliExpress is used by over 80% of drop shippers in Nigeria; thus, it may be your best option.
However, using AliExpress has its own set of difficulties! Of course, the problem with AliExpress’s lengthy shipping times.
“Will your consumer be able to pay for their items before they arrive in Nigeria?” is an example of a question.
Come up at this point. Will they be able to wait over 30 days for their package?
These are questions that will arise in your mind.
Then you’ll question if dropshipping in Nigeria has lost all hope.
Nah! You can easily sell to international markets or start a small importation company.
3. Choose your Platform
Here, consider your platform to be your online store. When launching a dropshipping business, you can create your e-commerce site or sell on one of Nigeria’s famous e-commerce platforms (such as Jumia and Konga), which enable other merchants to sell on their platform.
It would help if you began with the second option because it addresses many issues that you may not have the resources to address when running an ecommerce business.
As your business grows, you might create your e-commerce website.
4. Promote your Business
“Nothing happens until someone sells something,” as the business adage goes.
The primary goal of starting a dropshipping business is to sell something, which can only be accomplished by always seeking new and less expensive ways to promote your company.
You can have a fantastic product and a website, but you won’t have a business unless you have buyers.
Don’t overlook the importance of internet marketing in growing your customer base.
You can accomplish this by running customized Facebook and Instagram advertisements, SEO to optimize for certain keywords on search engines like Google, and other growth hacking strategies.
5. Get your Finances in Order
When beginning a business, one of the most common mistakes entrepreneurs makes is not taking financial management seriously.
Every money-making firm should be on the lookout for financial gaps that could lead to the company’s demise and take steps to avoid them.
Small business accounting, tax remittance, payroll administration, and invoicing are all financial activities that should be treated carefully.
You should keep your work and personal funds as distinct as workable.
Payment Gateway Issue in Nigeria
Several internet businesses in Nigeria continue to be hampered by the payment gateway.
However, there are only a few options for dropshipping.
Stripe, PayPal, and Paystack are among them.
Stripe: Even more so than PayPal; Stripe is the most extensively used payment gateway.
Their seamless integration allows you to accept payments from anywhere in the world on your website.
It doesn’t work in Nigeria by default. You’ll also need to register your firm in the United States to use it lawfully.
PayPal: This platform is one of the most extensively used payment channels available in Nigeria.
Paystack: This platform only accepts payment in Nigeria by default. However, if you wish to accept payments from outside the United States, you must have an account with them, have your business registered with CAC, and have a corporate bank account in your company’s name.
Following that, you can send them a request for international payment.
You can start earning payments within 24 hours if everything goes smoothly.
Dropshipping works in Nigeria just like any other online business.
All you need to know about products and marketing is what works and what doesn’t.
In Nigeria, Shopify works flawlessly. You can use it to set up a dropshipping store and sell your product simultaneously.
Oberlo integrates seamlessly with Shopify in Nigeria to help you get started with your dropshipping business.
With your Shopify store, you may get started with their free plan.
AliExpress provides shipping to Nigeria. It might be free shipping or paid shipping.
Free shipment takes longer than paid postage.
Dropshipping has become a very popular business strategy among young entrepreneurs, particularly Nigeria.
It’s quite easy for new competitions to spring up because you don’t have to stock or handle the products you’re selling.
The above tutorial will walk you through the steps you’ll need to start your own dropshipping business from the ground up.
Still, to be highly successful, you’ll need to keep innovating product variations, price, marketing, and delivery methods.