When I first wanted to start an online business some years ago, I did not have enough capital because I was still in school. Like most students at the time, I decided to learn how to start drop shipping becaus I realized it has worked for some people I knew at the time.
The idea was simple. I didn’t have the funds or resources to get the products I needed but I had the digital skills to sell them so I decided to reach out to platforms where I could get access to the goods, sell them and pay the vendors.
I invested some time into learning how dropshipping works, dabbled into it for a while before I eventually pivoted into full time digital marketing which I eventually realized was where I was better fit at the time.
But something happened during the pivot. While I went on to other things, my business partner evolved to build a successful ecommerce business using dropshipping.
Over the years, working with diverse businesses in the digital ecosystem across Africa, I have learned and deployed valuable lessons that has benefitted my readers and clients and, in this guide, I will be sharing my insights on the steps to start a dropshipping business from scratch in low trust and growing economies.
What Is Dropshipping?
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Dropshipping is an e-commerce business model that allows you sell products without keeping them in stock. Here’s how it works:
- A customer places an order on your online store.
- You forward the order details to your supplier.
- The supplier ships the product directly to the customer.
- You keep the difference between your selling price and the supplier’s price as profit.
For example, if a supplier sells a product for NGN15,000 and you sell it for NGN22,000, on your own platform, you make a profit of NGN7,000 after every sell. That is outside advertising and operational costs.
Why Dropshipping Is Growing in Nigeria and Africa Generally
If you look around today, you’ll notice businesses doing dropsipping and selling on platforms like Jumia, Konga, Jiji and so on. This has been a growing trend.
Over the years, some key factors have contributed to the growth of dropshipping in Nigeria but these are the ones I’ve mostly noticed repeatedly:
- Increase in internet penetration across the country. Outside that, it is also increasingly easy to set up sales platforms these days as you don’ have to own the system or build from scratch.
- Growth in online shopping compared to what it used to be. Nowadays, people can shop directly from the comfort of their homes and have the items delivered
- Access to global suppliers from large markets like China, Vietnam, America etc. and local markets in Nigeria and other African countries
- Availability of digital payment solutions that process seamless payments. Before now, it used to be difficult to order good from Nigeria and make payment if you’re in Ghana for instance. Now, the barrier is limited with expansions in global payment solutions
- Rising interest in entrepreneurship and side hustles among the youths
These are some of the reasons why a lot of people have now gone into dropshipping. And considering that a number of people are now making notable success, even more people are getting into it. And with the right strategies, systems and approach, nearly anyone could break even in this niche.
Now, the following are the steps you should take if you’re starting a dropshipping business today:
Choose a Lucrative Niche
The first step is selecting a lucrative niche. A niche is a specific category of products you want to sell but not all niches are lucrative so you have to focus on the highly profitable ones with a decent demand.
Instead of selling everything, focus on a particular market with a clear demand. This makes it easy for you to sell your products because there are willing buyers.
The following are the popular niches in dropshipping:
- Fashion and accessories
- Beauty and skincare products
- Mobile phone accessories
- Home and kitchen gadgets
- Digital gadgets
These are not the only niches. There are a lot more other niches but if you want to start dropshipping successfully, getting started with any of these niches can give you a head start as there are existing buyers in these niches, the demand is consistent and the products come with a decent profit margin.
You can also get started with others not listed here, depending on what you want but you must choose a niche that has consistent demand and products with healthy profit margins if you want to build a successful dropshipping business.
Research Winning Products
Every product does not sell well. And finding the product that sells well consistently is one of the safest tricks you can use if you want to start dropshipping successfully and grow it.
First of all, you want to look for products that can clearly solve a problem, have strong demand, are lightweight and easy to ship, have attractive profit margins generate interest on social media.
Now, sourcing for this kind of products can be very tricky for beginners but there are ways to go about it. For example, you can discover product ideas using:
- Online market places like Jumia, Konga, Jiji etc. What are the high demand products with a lot of recent reviews and ratings and what are people saying about them?
- Social media trends. Look out for trends on Tiktok, Instagram, Facebook. What products are selling massively, what are people buying, advertising etc.? That should give you a clue
- Product research tools. Use product and other keywords research tools to understand the search volume for specific products.
If you’re trying to get into a niche like mobile phones for instance, most often a quick Google search could give you an idea on the top selling phones.
As someone that wants to start dropshipping and grow it, you want to effectively research your target product to understand the demand, competition, profit margin etc. before settling on any product.
Always validate demand before investing time and money in marketing.
Find Reliable Suppliers
Your supplier plays a major role in your business success. With the right supplier, you can dropship products and have it delivered to clients on time. With the wrong ones, you could get into multiple issues with your business.
When choosing suppliers, consider: Product quality, Shipping speed, Communication quality, Customer reviews, Return policies etc.
These are non-negotiables if you want to build stability with your business. Research your suppliers thoroughly just the same way you’re researching your products. Ask around from other entrepreneurs, look up customer reviews from their websites if they have, get feedback from others.
There are major ways to source products for dropshipping. This includes:
- International suppliers
- Nigerian wholesalers
- Local manufacturers
Working with local suppliers can help reduce delivery times and improve customer satisfaction. But this is going to be dependent on the nature of your business or what you’re selling.
Also, I have a bias for local suppliers as you can always get to interface with them face to face in some cases which builds stronger trust but, in some situation, you may have to deal with international suppliers.
This will also require the same level of research and a system that helps you protect the integrity of your business. Have all of this sorted before you get started.
Create Your Online Store
You need a professional storefront where customers can browse and buy products. In the past when I first dabbled into dropshipping, there were not a lot of options for entrepreneurs in that space.
Right now, things are different. If you want to start dropshipping today, you can choose to build a free storefront across multiple business platforms.
For example, if you prefer if you want complete control over your brand, direct access to your customers, and zero marketplace competition, you should use Paystack, Flutterwave, and Bumpa storefront.
You can choose market places like Jumia, Jiji, Konga etc if you want massive visibility and you do not mind competing with other products, entrepreneurs and other brand.
And you can also use other platforms like WooCommerce, Shopify etc. to build your own platforms with your own domain name and hosting, if you want full control.
But while building, it is important that your dropshipping ecommerce platform should have the following:
- Clear product descriptions
- High-quality images
- Secure payment options
- Contact information
- Refund and shipping policies
Focus on creating a simple, trustworthy shopping experience.
Set Up Payment Methods
To receive payments successfully, ensure customers can pay easily. There are many ways to do this, depending on the platform you’re building with.
The popular payment methods for dropshipping Nigeria include:
- Bank transfers
- Debit cards
- Mobile payments
- Digital payment gateways
If you’re building on a payment system like Paystack, Flutterwave, Bumpa etc., you can easily integrate their native payment solutions.
If you’re starting a dropshipping business on social media, you can use direct ban transfers or payment using a designated payment system of your choice.
Alternatively, if you’re using your own system built from scratch using a CMS like WordPress and WooCommerce for instance, you can integrate a payment system that works for you and your clients, using plugins, widgets and other interations.
A smooth payment process helps reduce abandoned carts and increases conversions.
Design a Marketing Strategy
Marketing is what drives sales. You need a solid marketing strategy if you really want to start a dropshipping business that thrives. Because the competition is intense.
This means that after getting all set up, you have to put in place a marketing system to get the visibility, traffic and customer your business needs.
The following are some effective marketing channels you could use for a start:
Facebook Advertising. Facebook allows you to target specific audiences based on interests, demographics, and behavior.
Instagram Marketing. Create engaging content showcasing your products and customer benefits.
TikTok Marketing. Short-form videos can generate significant visibility and sales for trending products.
Influencer Marketing. Partnering with micro-influencers can help you reach targeted audiences at a lower cost.
Search Engine Optimization (SEO). Optimizing your website for search engines can help attract free organic traffic over time.
You don’t have to hold onto a marketing system and stick with it. At intervals, find out you strategy is still working or there’s a need for changes.
Provide Excellent Customer Service
Many dropshipping businesses have failed because of poor customer support. So many times, brands have forgotten customer service even after putting in great effort into marketing and sales.
But. If you want to start dropshipping and keep growing successfully, you have to put an effort into providing excellent customer services. In return, this can lead you to having more returning customers, referrals and more sales.
The following are the key areas you need a great customer service:
- Respond quickly to inquiries
- Communicate delivery timelines clearly
- Resolve complaints professionally
- Provide order updates
Like I said earlier, when your customers are satisfied, they are more likely to return and recommend your business.
Common Challenges of Dropshipping in Nigeria
While dropshipping offers opportunities, it also comes with challenges. The following are some of the documented challenges I have noted with dropshipping in growing economies like Nigeria:
- Delivery Delays
International shipping can sometimes take weeks. Consider local suppliers where possible. Or factor this into your listing timeline.
- Payment Issues
Some payment gateways may have restrictions, so choose reliable alternatives should be considered especially depending on where your target clients are coming from.
- Competition
Many products are sold by multiple stores. Differentiate yourself through branding, customer service, pricing and marketing.
- Product Quality Control
Since you don’t handle inventory directly, always test suppliers before scaling.
How Much Capital Do You Need to start Dropshipping?
One advantage of drop-shipping is the low startup cost. You may need funds for different things including store setup, marketing and advertising, product testing, business registration (if you prefer) so even where the upfront cost is not much, you may still have to spend some money.
Like my friend and a number of other entrepreneurs I have worked with, most people usually start with a modest budget and reinvest profits as the business grows. So, outside the initial capital for these things I listed above, you do not have to spend so much.
Final Thoughts
Dropshipping remains one of the easiest ways to start an online business in Nigeria without investing heavily in inventory or spending a lot of money upfront.
While success is not automatic, entrepreneurs who choose the right products, work with reliable suppliers, and invest in effective marketing have been able to build a profitable drophipping business and you can do the same.
While building your business, remember that it is important to research your product and suppliers before making an order, focus on product that solve problems, prioritize customer satisfaction, promote your business strategically and track your performance if you want to grow doing this business.
And finally, work with our team to build ecommerce systems that will work for your business, leverage our experience and mentorship and also, learn the right approach towards building a successful dropshipping business.
Now, it’s your turn; what are the challenges you have experienced when it comes to starting a dropshipping business? Drop your comments below.
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