Many people are skeptical about starting online businesses because of the startup costs and the many difficulties involved with running a small business or making an investment in Nigeria. However, dropshipping is a highly lucrative and profitable business to start in Nigeria. It is simple to start, and you could operate your company from just about anywhere. In my own opinion, dropshipping is one of the most profitable online businesses in Nigeria right now!
Dropshipping is an extremely popular business model for new entrepreneurs, especially Millennials, due to their internet skills far outweighing their financial capacity. It is one of the best ways to get your entrepreneurship off to a flying start, with the potential to become a top business in Nigeria.
It provides an all-encompassing platform that lets you sell products to customers, set prices for your products and market your brand. What’s more, you do not have to worry about inventory and product fulfillment. Since you do not need to stock or handle the items you are selling, it is possible to start a dropshipping business with limited funds.
In this article, I will show you a simpler way to reap all the benefits of an online store with minimal work. This will cover what dropshipping is all about, why it is a brilliant business model, the difference between dropshipping and Mini importation, and how to select the best supplier for your dropshipping store. By the end, you will have a good grasp of how to start a top business in Nigeria that can compete with retail giants, and how to position yourself to reap the amazing benefits that the future of eCommerce holds.
What is dropshipping?
Dropshipping is a retail fulfillment model that allows you to buy products individually from a wholesaler and have them ship directly to your customer. Instead of purchasing a large amount of inventory, you simply make contact with a dropship wholesaler or distributor that will ship products directly from their warehouse to your customers once you receive an order.
As part of your partnership, you and the dropship supplier will agree on a wholesale price for the products you want to list on your store. Once you have an agreement with the supplier, here is how dropshipping works.
- The dropship supplier will give you access to their product images so that you can post them on your website, auction, blog or however you plan to sell online.
- The customer will then place an order for an item on your online store and you receive the payment.
- You go ahead to forward the order request and customer’s shipping details directly to your dropship supplier and pay the agreed wholesale price for the product.
- Your dropship supplier packages and ships the order directly to the customer like it was shipped from your online store.
- The difference between your selling price and the wholesale price is yours to keep as profit.
What this implies is that you have limitless access to a variety of products without ever having to stock any inventory whatsoever. In other words, you are essentially selling products made by, stored by, and shipped by someone else. Your main job is just to sell the products; this makes dropshipping very appealing for home-based online businesses.
Why dropshipping is a great business model
If you are able to secure quality dropship suppliers, dropshipping is an extremely attractive investment in Nigeria, because all you would need to startup is a computer and an internet connection. If you plan to get into a small-scale business in Nigeria with a low budget, dropshipping is the perfect stepping-stone, and then you may transition to other models when you are ready.
In addition to convenience, here are the reasons why dropshipping is a great business model.
Low Capital Requirement
If you had to start a physical store, you would have to invest a lot of money. One of the biggest advantages of dropshipping is that you do not need to sink hundreds or thousands of dollars in inventory.
All of your setup time will be spent building relationships and creating a great web presence, and since neither a large investment nor a heavy inventory is necessary, you are still able to sell an abundance of products to customers.
Easy to Setup
Setting up a dropshipping business eliminates the hassle of managing a storage facility and essentially involves finding the supplier, setting up your website and selling the goods. To anyone who aims to start a small scale business in Nigeria, this model is relatively easy to grasp and implement.
Because you do not own any inventory, you do not have to make any extra payments for warehousing. The fact that your store is digital also means you do not require physical space. Your only fixed costs are what it takes to run your website, compared to what you would have to pay if you were to rent or buy a warehouse and office space, startup costs of dropshipping is nothing.
Significantly lower risks
In the event that your dropshipping business does not make enough sales, you do not lose anything, so there is very little pressure about having to sell your listed items. In other words, if things do not work out, you aren’t stuck with thousands in inventory you have to sell at a loss.
For the reason that you do not have to worry about fulfillment, running a warehouse or paying employees, it is highly possible to run a dropshipping business from anywhere as long as you have a computer and an internet connection.
Huge product selection
You are able to offer a significantly larger variety of products to your customers when you do not have to pre-purchase all the items listed on your store. There are dropship suppliers for almost everything, and as a result, you would rarely ever find a product that cannot be dropshipped. You can rely on one great product or mix it up, it is all up to you. This makes it a highly lucrative business to do in Nigeria.
Dropshipping affords you the option of starting as small as you wish and scaling up whenever you want to. By leveraging dropshipping suppliers (they will bear the majority of the work) you will not have to sink thousands of dollars into your store to raise it to the next level.
Who can start dropshipping?
The dropshipping business model’s ease of use and flexibility ensures that it is perfect for anyone interested in eCommerce, including startups. Given that it takes very little cash to start a dropshipping business, it is a great option for new eCommerce businesses and those looking for businesses to do in Nigeria without external support or capital.
Dropshipping is also perfect for those who want to test out a product or idea. In the event that you have trouble deciding if a new product or idea will resonate with your audience, a great way to see what people really want is by testing out a similar one with dropshipping.
People who want to sell a ton of different items without having them all in stock have the opportunity to do this with dropshipping. In addition, if you are looking to make extra income on the side to finance your secondary expenses, dropshipping is a great way to get some extra cash rolling in.
Dropshipping vs. Mini importation
Mini importation involves spotting the hottest products from platforms around the world like Aliexpress, 1688, and Alibaba, buying a few of these products and then selling them in your home country. While this model has become increasingly popular in a few African countries and one of the most lucrative businesses in Nigeria, it requires that you buy and ship the physical items you purchased down to yourself, and this process makes the importation business in Nigeria take a significant amount of time.
The Dropshipping model, on the other hand, does not require that you buy the products upfront and store them, therefore you get to save a lot of time on shipping and warehousing expenses. In addition, while mini importation business in Nigeria requires that you pay for items upfront, dropshipping lets you set up your online store and attract traffic, which is all you would be concerned about.
How to select a great supplier for your dropshipping store
The dropshipping business model hinges on the supplier doing their job well and fulfilling orders efficiently and on time. Therefore, selecting a great supplier is the most important step towards setting up a trusted and successful dropshipping brand to become one of the most lucrative businesses in Nigeria. You cannot afford to have a supplier who messes up orders as your business will be held responsible, so the key is to find someone who is trustworthy and willing to communicate about any issues they may be facing.
Keep these in mind when selecting your dropship supplier:
Get a dropshipper who is efficient and punctual with the shipping process.
Due to how competitive the market is, long shipping times are unattractive to potential customers, and it will be detrimental to your store’s goodwill to give customer’s delivery timelines that your suppliers cannot meet. Dropshippers who ship orders within a 48-hour period have found a great way to maintain customer happiness.
Get a dropshipper who provides high-quality products.
High-quality products are a no brainer for dropshipping as they yield a high level of customer satisfaction, which means a lower rate of customer returns. Product ratings and reviews also help to boost business success, so having products with top quality is imperative to your business’ future.
Get an experienced dropshipper with helpful sales representatives.
Any dropshipper who knows the pitfalls of dropshipping and how to handle them efficiently will reflect positively on your business. You would also need a sales rep who can answer all your product related questions on the team, in order to put your mind at ease.
Get a dropshipper who is good with technology.
You want to make sure that any dropshipper you choose has the technological abilities to keep up with the times. A time might come when you need to scale your business, and it would be terribly inconvenient if you have to sever ties with a decent dropshipper just because they cannot keep up with your growth.
Dropshipping on Shopify vs WordPress Woocommerce vs Bigcommerce
The decision has been made to set up your own dropshipping store, and you are unable to decide which eCommerce platform best suits your needs. Shopify, WooCommerce, and BigCommerce are in simple words, the best eCommerce platforms available on the market. Each comes with its own set of strengths and can potentially be the best solution for your dropshipping business. It is also worth mentioning that you can start your own store on these platforms without any help from designers and experts.
Here is a breakdown to help you decide which one is best for your dropshipping business:
WooCommerce offers over one hundred thousand themes and designs, with many of them being free. Shopify has 100s of storefronts with only 10 being free, while BigCommerce has a collection of 111 premium themes and 7 free themes.
Pricing and Scalability
WooCommerce is a free WordPress plugin and a fully customizable platform that is highly scalable with reusable features and components. Shopify is subscription based and it starts at 29.99, while the pricing for BigCommerce starts at $29.95, and is quota-based.
Help and support
BigCommerce and Shopify offer real-time email, chat and phone support. WooCommerce, on the other hand, offers forum support, ticket support, and many online blog help.
WooCommerce is based on WordPress, ergo it is SEO optimized and has additional plugins like Yoast SEO. BigCommerce also has SEO optimization, while Shopify has limited SEO support.
In the end, if you are looking to find the easiest way to start your dropshipping store, Shopify offers you the chance to do that with just a few clicks. WooCommerce and BigCommerce give you a lot more features but are not as easy to set up.
The future of eCommerce, how you can position yourself now
There are many brands looking to compete in the current eCommerce climate. These brands are looking for ways to differentiate themselves from the crowd, and as a result, it has never been more important to have a clear plan around your brand’s current and future positioning.
The effects that Amazon has had on the consumer and the retail industry is changing the way consumers research, plan, and shop. While your dropshipping store may not be on Aliexpress or Amazon’s level just yet, taking advantage of this powerful tool is key to ensuring your eCommerce business succeeds in the future. To position your dropshipping business for the future, you will need to be strategic in identifying a set of products or a niche that is trendy, or not so easy to find in stores or popular eCommerce platforms like Amazon.
Research is also integral to the success of your eCommerce store. You will need to look at who your competitors are and what they are doing. The research will help you identify better products to sell and give you a great understanding of how to start a successful online store. Investing in creating a great brand is also key. Also, eCommerce marketing is really essential to standing out from your competitors and generating sales.
Marketing your dropshipping business Facebook ads vs Instagram influencers
You are done with setting up your dropshipping online store, and the time has come to draw traffic to your store and products. Instagram influencers or Facebook ads, which marketing channel should you bet on?
Facebook ads allow you to target potential customers based on specific characteristics like location, demographics, interests, and behaviors. However, because there are so many options, there is the potential for it to become overwhelming. Also, you still have to handle the creativity of the ad, ensuring that your pictures, videos or text catches and holds your audience’s attention enough for them to click and trust.
On the other hand, Instagram influencers have control of the creative part of your marketing. They already have the trust of your audience and know how to speak to them. This gives you the leeway to focus on other metrics like sales and profits. However, influencers do not have the razor-sharp targeting of Facebook ads.
Marketing your dropshipping store on Facebook and Instagram will take concentrated time and effort. Each channel has its pros and cons, and you will have to tailor your campaign to suit your audience and platform needs. In the end, what you want to do is to adopt a marketing strategy that will bring in the highest levels of engagement to your dropshipping store.
Just like with any other successful business, setting up your own dropshipping store requires a certain level of passion, commitment and effort if you want to make it work. It would not just be about creating the business; you would also have to follow through with the plan and actively learn how to run it on a day-to-day basis. It goes without saying that to be extremely successful, you need to be innovative and deliberate in your choices of products, pricing, marketing and modes of delivery.
One of the best things about dropshipping is that you do not need to be an eCommerce professional to set up shop. You can learn by testing your products and ideas. If a product does not sell, stop promoting and wasting money on it.
Dropshipping allows for experimenting without incurring any major losses – This obviously gives business owners the confidence to say that they know how the industry functions. The fact that there is no upfront cost and very little risk makes the dropshipping model a no brainer for both eCommerce startups and existing businesses.