When you think of dropshipping what comes to your mind? Dropshipping is one of the most lucrative business to venture into in Nigeria. The country is witnessing an upturn and increase in several buying and selling and as such a lot of different ideas emerge very often in this line of business. There is wholesale marketing, there is affiliate marketing, then there is dropshipping. In this same vein, you will find a large number of online vendors marketing various goods.
Most of these people do not have an actual store yet they make sales, this is to tell you how common it is in the country. In all of these, what is the place of dropshipping? How do you go about starting a dropshipping business in Nigeria? What are the things to consider? How do you build your brand around dropshipping? All of these are going to be dealt with in detail but first of all, it is important to know the meaning of dropshipping itself. Keep following.
What is dropshipping?
In business, there are a channel or process goods pass through before they get to the consumer. The process is from the manufacturer to the wholesaler, the retailer, and finally to the consumer. Dropshipping is the channel that allows goods to get to the consumer without the wholesaler stocking the goods or keeping the goods. It is a third party and retail channel. In dropshipping the seller only takes orders from customers but does not have an actual warehouse, does not involve itself in the supply system.
So how does the good get to the consumer?
The goods are sold through the wholesaler or retailer who is not the owner of the product. As a result, the wholesaler/retailer does not have control over the brand quality or product. Let us break it down further.
Mr R ordered a bag of tomatoes from you, you send it to a drop shipper, when the order is confirmed the drop shipper collects an amount for the product sold, package the goods and get them across to Mr R. Someone who dropships gets their profit on the changes between the retail and wholesale price. A drop shipper is just an intermediary in the business process.
Types of Business in Nigeria That Fits Dropshipping
There are several common businesses in Nigeria that people dropship for. Having a slot will determine the type of products you want to sell. There are many of them out there and you just need to go for the ones you understand. It is generally wise to go for those with a low competition rate.
But if you choose one with a high competition rate, there’s no problem. You will just need more effort to find your way around it. Have a look at these trendy categories of products Nigerian dropshippers are venturing to.
- Female fashion dresses Dropshipping Business
- Male version clothes Dropshipping Business
- Male and Female footwears
- Kitchen and Home Equipment’s
- Furniture Dropshipping Business
- Electronics Dropshipping Business
- Babies Dropshipping Business
- Pets Dropshipping Business
- Hair treatment, extensions and wigs
- Skin treatment and Organics
- Motorcycles and Cars
Advantages of Dropshipping
Here are some merits of dropshipping:
Dropshipping Removes The Need for A Warehouse
In dropshipping there is no need for an actual store, this has eliminated the stress of looking for space or place. Choosing a shop or store for a business is one of the most tasking things to do. Considering the high rate of renting a space, maintenance of the place, and stocking it up.
Followed by this is how to stock up the shop with goods. Sales can be done regardless of location. Dropshippers also covers packaging, arranging and shipping the goods, this makes you relax since you do not have to worry about how logistics. The idea behind dropshipping makes sure that you can sell anywhere in the world. It is safe to say that dropshipping is a type of digital marketing.
Wide Variety of Goods
Dropshipping covers a large variety of goods and products and you can choose anyone you want to venture into. However, some people dropship for more than 2 types of product, while some are focused majorly on one. For example, in Nigeria, you are likely to find people who are focused on female wears and shoes or female wears alone. They do not do kitchen items or electronics.
Business Owner Only Pays for The Product When the Customer Pays
After looking for a store for a business, the other thing that gives people problem is how to stock up the store with goods. Buying actual goods may run into millions if not billions of naira. Starting a business in Nigeria requires a lot of money but dropshipping means you can do business without having to worry about buying goods.
Your major concern is to market a product and get it to the customer. The wholesaler also only pays for the product when the customer pays, this has eliminated pressures on both the wholesaler, retailer and drop shipper.
In addition, this is another way to test new goods and ideas. You can put some products on your website and see how people will react to them, whether it is competitive or not. It allows you to know the market state of these products before venturing into it big time.
Possible Disadvantages of Dropshipping
While dropshipping has its merits, there are also a few potential disadvantages.
Hard to Build a Brand
Most of the times people do not reckon with drop shippers because they are only an intermediary, they do not own the brand. Although the hard work put into getting customer and getting the goods to the consumer is not minute, people hardly remember them because the result of all that work all goes to the brand. Dropshipping has the same disadvantage as ghostwriters or those who work behind the scene.
The income varies according to products sold. Most of the times the expenses incurred in keeping the web running and marketing the product compared to the profit has kept a large margin. However, if you make a lot of sales or you can build a big e-commerce business, you can fill this margin.
Dropshipping Business Is Very Competitive
Well, this is high because dropshipping requires little cash to start up. In Nigeria, there are a lot of people engaging in this business, it is most common with young people. When a business brings profit and does require renting a shop, stocking up goods, paying for maintenance amongst other things required it is bound to be saturated. The popular a market is, the more competitive it becomes.
No Control Over Brand Quality, Product or Warranty
A drop shipper is not the manufacturer of a product nor the producer, neither are they the direct buyer of goods they sell. Therefore, the quality of the brand is not within their capacity although when something goes wrong with a product, they get the blames for it. Sometimes they may even run into legal issues (which is rare ). Remember that drop shippers also does not have control over the supply chain but because they are the closest to the consumer, they take the blames These are the hazards of the business.
A Step-By-Step Guide on How to Start Dropshipping Business in Nigeria
1. Find a market/opportunity
Finding a market is also finding what you want to market, the product or goods you want to sell. Considering the competition, you may want to go for something less competitive. Try doing research online, or even ask around in the market and decide on a product. There are sites where you can look out for these like Amazon, eBay, Shopify, AliExpresss, etc. Deciding on a product may have to do with the things you would love to involve yourself in and those you don’t want to do. Then consider the pros and cons of the goods, consider the price, and choose whether you want to sell cheap or expensive products.
2. Find suppliers
You need someone or people that will supply you the products you have settled for remember, you should get someone that you can get a product from, make sure they are reliable and trustworthy. Also, go for a supplier/s that only sell high-quality products. You do not want to take responsibility for a damaged product that you didn’t produce, right?
3. Have an online store or a platform
Of course, you need a platform to market your business, maybe an online website, an e-commerce platform, a place to display and market the goods.
You need to strategize if you want to succeed in this online business. You can create a list of your plan. The strategies of your market, your time, and how you want to earn. Be realistic with your plans as much as possible, to be successful as a drop shipper in Nigeria you need to put into considerations the realities of the Nigerian market.
5. Use valid payment methods
One of the things that serve as hitches in the dropshipping business is banking options. The more problem a dropshipper has with this, the more it affects customer’s relationship. The solution to this hitch is to go for banking options that are the most reliable.
For example, GTB had issues with alerts for some time last month. When someone sends you money, you will not get the alerts at all. Imagine this happening with drop shippers, where customers claim to have sent you money for a product and you did not receive an alert for it, you also do not have a mobile banking option. What to do?
Keep going higher, keep getting better. To grow you have to think like your competitors, like Jumia. Think of what you can do different, think of your target audience and how to make it grow bigger.
Building a brand around a dropshipping business is the toughest thing to do. You need to build a strong online store/audience by using social media, you can also make use of influencer marketing.
In all of these make sure your customer service is great. You also need to build trust with your customers, that way they can refer you and your business.
Dropshipping is not only very common these days in Nigeria but also profitable, but there is a lot to know about it. Now you know what dropshipping is, how to go about it in Nigeria, the hitches and benefits. Following the aforementioned steps will do you a great deal of favour as you start your business.
Put in mind customer service so that you can gain their trust, also work towards building a brand through consistency and hard work. With all these, your dropshipping business in Nigeria can grow.
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