In this article, you will learn how to start an ecommerce business in Nigeria. You will also know other things like the capital needed to start the business in Nigeria, whether the business is a profitable business in a country like Nigeria or not, and the most profitable products you can sell online in Nigeria.
Selling goods or products is profitable in Nigeria today because the world is gradually becoming a global village. Many people are connected to the internet today doing different things on social media, reading articles, streaming videos on YouTube and Netflix, and more.
This is why many individuals, companies, and organizations are also going into digital marketing, affiliate marketing, and all other kinds of online businesses. Aside from the fact that many people now stay online for different reasons, it is also cheaper to run businesses online because you would not need to spend money like physical (offline) businesses.
What is Ecommerce?
E-commerce also known as electronic commerce simply means the ability to make sales online through the creation of an online store or any other kind of means. With the emergence of e-commerce business you can sell, get paid, and deliver products to customers’ doorstep without leaving your home or store.
Types of Ecommerce Businesses
There are different types of ecommerce businesses in Nigeria. These are:
1. Business-to-Business (B2B)
This is the selling of products and services between two businesses. This can be vice versa or just from one business.
2. Business-to-Consumer (B2C)
This is a type of ecommerce business in Nigeria where businesses sell goods and services to customers.
3. Consumer-to-Consumer (C2C)
This is a type of ecommerce business in Nigeria where customers sell goods and services to other customers.
4. Consumer-to-Business (C2B)
This is when customers sell goods and services to businesses. This type of e-commerce business is not popular in Nigeria.
5. Business-to-Administration (B2A)
This is a kind of ecommerce business in Nigeria where businesses sell goods and services to administrations. This type of e-commerce business is not common in Nigeria.
6. Consumer-to-Administration (C2A)
This is a type of ecommerce business in Nigeria where customers sell goods and services to administrations.
Is Ecommerce Business Profitable?
There are many reasons why the ecommerce business is profitable in Nigeria today. The first reason is that about 90 million Nigerians are internet users. Out of this population, about 90% have either purchased or sold products on e-commerce stores like Jumia, Konga, or any other e-commerce stores. Imagine your e-commerce business is also part of this online store.
Another reason why ecommerce business in Nigeria is lucrative is that it is cheap to start. Yes, if you want to start an offline commerce business (buying and selling business) in Nigeria it is going to cost more. This is because you will need lots of human capital and spend more on utilities, unlike an ecommerce business in Nigeria.
Capital Needed to Start Ecommerce Business in Nigeria
There are so many factors that determine the cost of starting an ecommerce business in Nigeria. We have the cost of building an e-commerce website, the cost of registering your e-commerce business, the cost of products, and others. However, with a capital of about #1,000,000 – #2,000,000 you can start a profitable ecommerce business in Nigeria.
Products to Sell Online in Nigeria
There are different types of products or items that sell fast in Nigeria today. If you are thinking of starting an ecommerce business in Nigeria you can either pick some of these goods or all to sell.
4. Computer accessories
5. Fashion items
You can explore each product and broaden your products. You can also be a niche ecommerce business or a multi-niche ecommerce business.
How to Start Ecommerce Business in Nigeria
Here are the steps on how to start an ecommerce business in Nigeria.
1. Write a Business Plan
The first step to starting a profitable e-commerce business in Nigeria is to write an ecommerce business plan. In my past articles, I have explained what a business plan is and why it is important to any business in Nigeria, especially a capital-intensive business.
You need to write a business plan if you are really passionate about e-commerce business in Nigeria. An ecommerce business plan guides you and informs you about everything you need to know about the e-commerce business in Nigeria.
It explains how it runs, the capital needed, how to make profits in the business, and other projections. You can write a business plan by following the steps I laid down in my article on how to write a business plan in Nigeria or you can simply hire us to write the business plan for you at a discounted rate.
2. Register the Company Name
As an individual that is really interested in the e-commerce business in Nigeria, you need to also register your ecommerce business as a company. The first step to registering your ecommerce business into a company is to register under the Corporate Affairs Commission (CAC) and after completing the registration, you will need to register your company for tax (the FIRS).
If you have not done these two it is illegal to start an ecommerce business in Nigeria especially due to tax avoidance. There is so much information needed to register your e-commerce business under the CAC. You will need your name, address, business name, business address, phone number, account number, TIN (Tax Identification Number), and others.
So you need to get prepared. Read our article on how to register your business name in Nigeria for more guidance on this.
3. Acquire a Domain Name
Domain names are not tricky or hard to acquire however, if you do not know how to go about it you can hire a website developer to do it for you. All you need is to get a simple domain name that has not been used before. To come up with this domain name, there are a few things you need to consider.
You need to make sure the domain name you are using is simple, easy to remember, and is not long at most not more than three or four syllables or two or three words. After you have been able to come up with a simple domain name, you can register the domain name for 3 – 5 years to make sure you avoid renewing every year.
4. Build an E-commerce Website
There are different ways you can build an eCommerce website in Nigeria but if you do not know how you can go about it you can hire a website developer to build it for you too. The website developer will charge you depending on the experience or professionalism he or she has.
Averagely, a website developer will charge you #100,000 – #250,000 to build an eCommerce website for you. When hiring a website developer for the building of your e-commerce website you need to make sure he or she really knows what they are doing. A professional website developer will optimize your site using SEO, breadcrumbs, online ads, and more.
5. Buying and Displaying Products
Depending on the products you want to sell online in Nigeria, you will need to buy your products, stock them, snap them, upload pictures of products on your ecommerce website, and add price tags to them. It is important to note that the website layout and pictures of goods displayed on your ecommerce website determine the percentage of patronage.
For this reason, you might need to hire a professional photographer to snap pictures of your items or simply use pictures of the products from the factory.
6. Partner with Logistic companies
It is impossible to run an ecommerce business without a logistics business in Nigeria. This is because ecommerce business is like the head while the logistics business is the hands. After your goods or products are ordered and paid for online, you need a logistics business to transport these items to your customers’ doorstep.
This is the role of logistics businesses – to transport goods from one place to another saving both the seller and the buyer lots of stress and time. You can either register with a local logistics business in your area or simply start a logistics business alongside your e-commerce business. This is if you have extra money to start another business after your ecommerce business.
7. Running Online Ads
The role of ads cannot be underestimated in running a profitable e-commerce business in Nigeria – especially if you are just starting out. If your e-commerce business is new in Nigeria, you need to run ads to create awareness for online users that there is a new ecommerce store in the country and their products are relatively cheap.
The best thing about running online ads is that it is very cheap and it increases conversion rates, unlike offline advertising. You can run your ads using digital marketing strategies for 6 months before you stop for a while and rely on existing customers.
There are so many opportunities in the e-commerce sector in Nigeria and the e-commerce business is an untapped business in Nigeria because of its technicalities. You can start your own e-commerce business like Jumia, Konga, and others to start making your millions online in Nigeria now.