Dropshipping in Nigeria: Dropshipping proves to be a lucrative venture that thrives in Nigeria. Often, individuals hesitate to launch an online business due to the substantial upfront costs and the challenges associated with managing a small enterprise in Nigeria.
Do you find yourself in a similar predicament?
If your answer is YES, this article aims to guide you on how to become a successful dropshipper in Nigeria this year.
Embarking on a dropshipping business represents an excellent entry point into the realm of entrepreneurship. In this model, customers buy products from you, allowing you to establish your pricing and brand identity. The significant advantage is that you don’t need to invest in inventory until a customer makes a purchase.
If you’ve been seeking the ultimate guide to kickstart your dropshipping venture, you’ve landed in the right spot.
Dropshipping in Nigeria
Dropshipping represents a specific retail fulfillment method where a store refrains from maintaining an inventory of the products it offers for sale.
In this approach, when a store makes a sale, it procures the item from a third-party source and promptly dispatches it directly to the customer.
Dropshipping serves as a business strategy that empowers a company to function without the need to stock inventory, possess a warehouse for storage, or handle the transportation of products to their customers.
How Does Dropshipping Works in Nigeria?
In its simplest form, dropshipping entails selling goods without the initial purchase or possession of inventory.
Once you’ve established an online store and populated it with product listings, here’s how the process unfolds:
When I refer to a “product,” I’m alluding to the product images and descriptions; physical product stock is not a necessity.
After securing a sale, your next step involves contacting your third-party supplier, who is the actual owner of the product. You furnish them with your customer’s shipping address and remit payment to the supplier using the funds received from your buyer.
The supplier then ships the product directly to your customer, ensuring a seamless transaction.
Both you and your customer conclude the process with satisfaction.
If you’re sourcing items from AliExpress, you won’t need to directly interact with the vendor. Instead, you simply pay for the items and input your customer’s details on AliExpress as the purchaser. Without any inquiries, an AliExpress seller takes care of packaging, processing, and shipping the product to your customer, all without revealing its origin from AliExpress.
Pros of Dropshipping Business
- Dropshipping allows you to start your online store without investing hundreds or thousands of dollars in inventory.
- You aren’t dealing with physical inventory. Running a dropshipping business is easier to start and run, aside from finding a supplier and setting up your online store.
- You won’t have to worry about purchasing inventory or managing a storage facility, so your costs will be kept to a minimum. A laptop could run your dropshipping business from home!
- You don’t need to pay high rent because your dropshipping business can be run from almost anywhere as long as you have an internet connection.
- When you use drop shipping providers, most of the work is taken care of by them, allowing you to expand and scale with minimal effort.
Cons of Dropshipping Business
- Operating within a fiercely competitive dropshipping market often translates to narrower profit margins. The ease of initiating a business with minimal expenses tempts many entrepreneurs to set initial prices remarkably low in a bid to rapidly boost revenue.
- For those employing multiple suppliers, as is common among dropshippers, shipping costs can become a convoluted concern due to the variability in shipping rates from one supplier to another. This approach also relinquishes control over the quality and swiftness of product deliveries.
- Collaborating with suppliers means outsourcing a portion of your customer service responsibilities. This entails that another entity is responsible for crafting and delivering a product, a pivotal aspect of the overall customer experience. Should any issues arise with the supplier’s shipment, the customer is likely to hold you accountable for the mishap.
Which Niche is Best for Dropshipping in Nigeria?
A niche refers to a distinct market segment within which a specific industry can be leveraged to initiate a business venture.
Dropshipping, as a business model, hinges on the choice of a niche, which dictates the type of store you intend to establish and the products you plan to offer for sale.
When it comes to dropshipping AliExpress products, this necessitates a deliberate selection process. Your niche could encompass a wide array of subjects, such as animals, automobiles, or motorcycles. Your specialization determines the product category you will focus on. However, identifying a profitable niche can be challenging, given the multitude of options within the industry. Some niches yield higher returns than others, underscoring the importance of thorough research.
If you find yourself uncertain about which niche to pursue, here’s a compilation of popular dropshipping niches that are currently trending this year.
- Clothing and Accessories for Men
- Women’s Accessories and Fashion
- Health and Wellness
- Kids and Babies
- Home and Kitchen
- Phone Accessories
- Automobiles and Motorcycles
- Hair wigs and Hair Extensions
Steps to Starting Dropshipping Business in Nigeria
Below are the key steps to kickstart a lucrative dropshipping venture in Nigeria:
1. Choose a Product to Sell
The initial step involves selecting the product you intend to offer for sale.
Many individuals are enticed to sell anything they can lay their hands on.
It’s crucial to bear in mind that dropshipping is a business endeavor.
Similar to any other business, it requires comprehensive research and the development of a profitable business strategy.
One way to accomplish this is by identifying winning products to sell.
Additionally, when choosing your product, remember that you cannot simply start selling any random item.
Utilize Google Trends extensively to gauge the demand for these products.
The chosen product should align with the market, with a reasonably high or at least consistent demand and minimal competition.
In this business model, success doesn’t hinge on having an extensive product range on your website.
Instead, concentrate on popular products within a specific niche.
There are two distinct methods for discovering products to sell:
The first option is manual product research, while the second involves utilizing various product research tools, some of which are free and others paid.
2. Find a Supplier
Engaging with the wrong supplier can spell disaster for your company, so exercise caution during this phase. Take your time and conduct thorough research. It’s worth noting that most drop shipping vendors suitable for Nigerian businesses are situated abroad, primarily in China.
Alibaba has emerged as one of the most widely utilized online platforms for identifying and connecting with potential manufacturers and suppliers. If your business experiences rapid growth, don’t hesitate to ask numerous questions and familiarize yourself with their production capabilities. You’ll want to ensure they have the capacity to expand alongside your needs.
One effective way to identify a reputable AliExpress supplier is by scrutinizing their seller rating. Avoid selecting sellers with ratings below 90%. AliExpress is likely the best option for those interested in dropshipping from Nigeria unless you have a trustworthy Nigerian manufacturer or supplier willing to collaborate with you.
In such a scenario, your role is to promote their products and forward orders to them, while they manage the logistics within Nigeria. AliExpress offers reasonably priced products, enabling you to scale your business profitably. Fortunately, over 80% of drop shippers in Nigeria use AliExpress, making it a strong candidate for your venture.
However, utilizing AliExpress comes with its own challenges, primarily related to extended shipping times. You’ll need to consider whether your customers can pay for their items before they arrive in Nigeria or if they can wait for more than 30 days for their packages. These are important questions that will cross your mind.
But fear not! Nigeria still holds potential for successful dropshipping. You can explore selling to international markets or even start a small importation business.
3. Choose your Platform
In this context, envision your platform as your online store.
When embarking on a dropshipping venture, you have the choice to either establish your e-commerce website or leverage one of Nigeria’s renowned e-commerce platforms, such as Jumia and Konga, which allow third-party merchants to sell on their platform.
It is advisable to start with the latter option, as it effectively tackles various challenges that you may not have the resources to handle while operating an independent e-commerce business.
As your business expands, you can consider the possibility of building your own e-commerce website.
4. Promote your Business
As the well-known business adage goes, “Nothing happens until someone sells something.”
The fundamental objective behind initiating a dropshipping enterprise is to make sales, a goal that can only be achieved by constantly exploring fresh and cost-effective methods to promote your company.
You might possess an exceptional product and a well-designed website, but a bona fide business can only materialize when you secure buyers.
It’s crucial not to underestimate the significance of internet marketing in expanding your customer base. This can be achieved through tailored advertising campaigns on platforms like Facebook and Instagram, implementing SEO strategies to enhance visibility for specific keywords on search engines like Google, and employing various growth hacking techniques.
5. Get your Finances in Order
One of the most prevalent errors entrepreneurs often commit when embarking on a business journey is neglecting the importance of financial management.
Any profit-oriented enterprise must remain vigilant in identifying financial vulnerabilities that could potentially spell the downfall of the company, and proactively take measures to mitigate such risks.
Prudent attention should be given to various financial tasks such as small business accounting, timely tax payments, efficient payroll management, and meticulous invoicing.
Additionally, it is advisable to maintain a clear demarcation between your business and personal finances to the greatest extent possible.
Payment Gateway Issue in Nigeria
Numerous internet-based businesses in Nigeria face persistent challenges related to payment gateways, but when it comes to dropshipping, there are only a handful of viable options.
Stripe, PayPal, and Paystack are among these options:
- Stripe: Among these gateways, Stripe stands out as the most widely utilized. Its seamless integration facilitates the acceptance of payments from around the world on your website. However, it doesn’t operate in Nigeria by default, and to use it legally, you must also register your business in the United States.
- PayPal: PayPal is another extensively used payment platform available in Nigeria.
- Paystack: Paystack, by default, is geared towards accepting payments in Nigeria only. Yet, if you aspire to receive payments from outside Nigeria, you’ll need an account with them, your business registered with the Corporate Affairs Commission (CAC), and a corporate bank account in your company’s name. Following these steps, you can request international payments and start receiving funds within 24 hours if all goes smoothly.
Dropshipping in Nigeria operates much like any other online business. Success hinges on your understanding of what works and what doesn’t in terms of products and marketing.
Shopify works seamlessly in Nigeria, allowing you to set up a dropshipping store and sell products concurrently. Oberlo integrates smoothly with Shopify in Nigeria, facilitating the launch of your dropshipping venture. You can get started with your Shopify store using their free plan.
AliExpress offers shipping options to Nigeria, including both free and paid shipping. However, it’s worth noting that free shipping typically takes longer to deliver compared to paid shipping methods.
Dropshipping has emerged as an exceedingly popular business approach, especially among young entrepreneurs, with Nigeria being no exception.
One of its key advantages is the ease with which new competitors can enter the market since there’s no requirement to maintain a stock or physically handle the products you’re selling.
The tutorial provided above will guide you through the essential steps for initiating your own dropshipping venture from the very beginning.
However, to attain remarkable success, it is vital to continuously innovate in terms of product variety, pricing strategies, marketing techniques, and delivery methods.