How to start ecommerce in Nigeria

With the explosive growth in ecommerce across Africa, thousands of entrepreneurs have taken up steps to start an ecommerce business of their own so they can tap into the lucrative opportunities available in the industry.

With the explosive growth in online commerce across Africa, this is not just one of the best times to start an ecommerce business, thousands of entrepreneurs like are already taking steps to set up their own businesses so they can key into opportunities in this industry.

From small to medium and averagely growing enterprises, a handful of ecommerce businesses have sprung up across different platforms, with some recording impressive sales while others have also fizzled out over a few years.

As someone interested in setting up an ecommerce business of their own, you want to know the exact steps to build a business that yields high returns on investment. And in this guide, I’ll be taking you through the crucial steps you have to take to achieve your goals, in the following paragraphs.

The first step to start an ecommerce business is to identify your overall goal. Find out, why do you want to start this business?

Is it because you’re broke and you want to make some money online? Or are you interested in starting because you want to give an online presence to an already existing offline business? or are you starting out because you have a lot of money and you want to build the next

Your goal is going to be crucial in deciding the next steps you’ll have to take. I mean depending on the goals you have in mind, it might be feasible to start small for one goal while it might not for another.

So, you want to pay attention to what motivates you, your resources and then put this into consideration while creating your business plan and the next steps.

After finding your goal, your next step on the journey to start an ecommerce business is to conduct a market research. This is not always hard. It’s a simple gathering of data, to get some insights into the industry before diving into it.

The reason you’re conducting a market research is because you want to understand the market, find out if there’s an actual demand for the product you have in mind to sell or not and also form a general impression about the industry.

A lot of new businesses have failed because founders couldn’t research or identify a clear demand for their products. To avoid this, you want to take the following steps while conducting your research.

Identify High Demand Products: While conducting your market research, if you already have a niche idea or a product you want to sell then you have to conduct further research on that product and its niche.

Where you don’t have an existing product, you want to identify potential products or niches with a high demand. These are the kind of product you want to sell.

Pick out & Analyze Competitors: Identify and analyze the top performers in that industry. Find out their areas of strength and weaknesses. This will give you an idea on whether you can actually compete with them as a beginner or not. Also, you’ll have an idea about what it might take to compete effectively.

Identify your target Audience: Here you’re going to sort out your target audience and then identify their market preferences. At this stage, you want to know your ideal customer, what they prefer and how you can appeal to them even as a beginner.

After doing all of this, you still want to take a further step to validate your idea by asking potential customers real questions about your product, creating surveys for feedback etc.

After you’re certain that there’s a genuine market demand for your business idea and you can effectively compete in the market, the next step to start an ecommerce business is to identify and create a business model that will work for you.

Choose a business model that’s suitable for you depending on your business goals and available resources | Photo by Pexels

Keep in mind, there are a number of popular business models out there that anyone can pick up and use for their business. But the thing is; sometimes some business models may not work for you, depending on some reasons like your geographical location, business resources or even product and niche.

So, instead of using a general model, identify and use a specific model that will work for your business. With that said, the following are some of the popular model for ecommerce businesses in Nigeria and most African countries that you can adopt and edit to suit with your needs:

  • Direct Sales: With this model, you buy your product from manufacturers or suppliers then sell them directly to your customers using your ecommerce platform.
  • Drop Shipping: With the drop shipping model, you get to partner with suppliers who handle inventory and delivery while you process the payment from your platform or alternatively, they ship to you and you deliver to customers directly. The highlight of dropshipping is that it is less capital intensive as you do not necessarily need to have the products in store and ready-to-buy.
  • Ecommerce Marketplace: Think about Amazon. With an ecommerce marketplace, you get to create a platform where sellers can list and sell their products.

Now that you’ve chosen a suitable business model, the next step to start an ecommerce business is to actually create your business.

At this stage you’re going to choose a business name, logo, create a brand and then evolve a business plan. Let’s break it down.

Business Name: If you’re starting from scratch, you want to choose a business name before getting started. Remember you need a brand name that is sweet, short and catchy.

You don’t want to confuse your target audience on what your business is all about so as a rule of thumb, keep in mind to choose a brand name that is closely related to your business.

Brand: Now that your brand name has been sorted, it’s time to go ahead and create your brand colors and other branding items.

PS: While choosing a brand name, make your findings to ensure you’re not choosing a name already taken by a different brand or other name with copyright issues or any encumbrances whatsoever.

Logo: Create a logo that is unique to your business and is easily identifiable. I am always a fan of simple, catch and memorable logo that is easily identifiable with the brand.

Business Plan: A business plan is a simple document that outlines a business’ vision, goals and the steps an entrepreneur will take in building a business to deliver on the goals and expected outcomes set out for it. You’ll need some sort of business plan to guide you through your journey.

Business Registration: Depending on how big you want it, at this stage, you can proceed to register your business with government agencies like the corporate affairs commission. From there you can begin to process registration for your corporate account, TIN etc.

To build an ecommerce business, you need an online store. This is what you’re going to create at this stage, using the following steps:

PS: Your preferred option for an online store should be determined by your goal. For example if you plan to build an online store in the mould of Amazon, you want to go for a platform that will allow scalability in the future.

Where you’re building a simple ecommerce business on the other hand, you can consider using a much more robust platform like WordPress, Shopify etc.

Find your Domain Name: A domain name is the name or web address of your website. To build an ecommerce website, you’ll need a domain name. And one of the key things to keep in mind while shopping for one is to choose a domain name that is similar to your brand name.

Where your preferred domain name is not available, find a way to create and use any other name that is still closely related to your brand name and is free of encumbrances.

Choose a hosting Plan Choose a reliable hosting company and then buy a hosting plan that works for your business, depending on your need. For ecommerce website, we usually advice clients to consider the space allocation, resources and future growth needs before choosing a hosting plan. You can reach out for advice on this, here.

Setting up a Platform

After paying for your domain name and getting a hosting plan, its time to go ahead and set up an online store for your ecommerce business.

Remember I mentioned that there are several options you can use to create an online platform for your ecommerce business but choosing either of these platforms will depend on things like your overall goal, resources and type of products.

So, you can build your ecommerce store using either of shopify, Woocommerce by WordPress, Magento or building from scratch.

To build an ecommerce business with WordPress, you’ll need to install the software either from your cPanel or from the WordPress directory itself, install your preferred template or theme and plugins then start to build your website from scratch.

Alternatively, you can hire one of our developers to build your ecommerce website from scratch. And of course you can check out this guide to get started with building your website.

Before you start an ecommerce business, you want to identify reliable suppliers or manufacturers of the products you plan to trade in, find out their pricing, delivery etc. and then have some negotiations with them.

Remember, products can be sourced locally or internationally, depending on the industry, quality, your overall goals and or resources. You want to put these into consideration as well.

Finally, if you’re using a drop-shipping model, here’s where you’re going to identify your key partners and the arrangement you’re going to put in place with them.

PS: It is important to work with only reliable suppliers at this stage. Also, pay attention to the cost, quality and shipping. And of course, put in place a number of backup plans.

Inventory Management

You need an inventory management system that will keep track of your stock. For starters, you may integrate systems like this to your website but as the business continues to grow, you may want to have a standalone inventory management system.

For the fact that you’re starting an ecommerce business, you will most likely have an option where customers can make online payment. To get this done correctly, you’ll need to set up a secured payment system online.

That said, there are a number of reliable payment gateways popular in Nigeria and most African countries like Paystack, Flutterwave, Cellulant etc. There are also a number of foreign ones.

You can choose either of these options, depending on the location of your target audience, integrate it into your website and then have a seamless payment option set up for the business.

Packaging, Shipping & Delivery

Depending on your business model, for packaging purposes, you can stick with the manufacturer’s packaging, request for a custom packaging at a fee, or create your own branded packaging from scratch.

Ecommerce business in Nigeria
Promote your ecommerce business using both free and paid promotion options in line with your goals | Photo by Pexels

Whatever you choose for packaging, be sure it matches your available resources while leaving room for growth.

For shipping, you can partner with reliable courier service providers. This can be providers operating locally, nationally or internationally but your choice should be made based on the overall location of your target audience.

And finally, while tracking may not be a priority for you if you’re starting on a shoestring budget, where you have the resources, implement a tracking system directly on your website.

It is not enough to aspire to start an ecommerce business. After you’ve successfully started, you want to grow your business in leaps and bonds. And one of the easiest ways to do this is to invest in marketing and promotion of the business.

You can do this using the following strategies:

Invest in Social Media Marketing: Don’t leave your ecommerce business on your online store. Get over to the social media, create a platform, share content, engage with your audience and build a platform there. Doing this expands your reach and visibility.

Engage in SEO: Optimize your website for search visibility and ensure that the website is user friendly, mobile friendly and easily accessible to your target audience.

Create and Post Content: Create a blog and share content that relates to your industry. Outside positioning you as an expert in the industry these content will further get you more visibility on the search engines.

Use Paid Promotion: There are a number of paid promotion options available. From social media advertising to Google PPC, Sponsored posts etc. You can use either of these to promote your business, especially on the early days.

Final Words

While it’s very possible to start an ecommerce business and grow it successfully, starting an online business of any kind will demand from you a lot of careful planning, work, effort and consistency.

Outside following each of the steps on this guide to start your online store, you also want to be very consistent with the business, pay attention to customer feedback and make improvements. And of course, measure and evaluate your growth at intervals.

Remember you can always learn and understand the business better through the process. And you can also get help from our experts to get even better outcomes for your business if your reach out to us here.

Now, it’s your turn. What are your biggest challenges when it comes to setting up an ecommerce business? drop your comments below.

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    Victor Winners

    Victor Winners

    A Nigerian trained Law graduate and British LL.M candidate, using his widespread experience in tech, law and innovation, to evolve cutting edge and growth driven solutions for brands and businesses in Africa and beyond.As a Law-trained tech expert, Victor brings in over 7 years experience working in the Digital Marketing, SEO, Web Development, Online Publishing, Social Media and Legaltech sectors, to create result driven content and innovative solutions to brands and businesses.Named as one of the top 50 Web Design Influencers Globally, Victor Winners started one of Africa's most widely read blogs on Digital Marketing and Strategy.With this platform, he has impacted the lives of over 2 million readers spanning more than 135 countries in 8+ years

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