The Complete Guide to Start an e-Commerce Business in Nigeria

Multiple e-Commerce businesses spring up everyday, with several selling items from different categories. While there are already big players in the Nigerian and African e-commerce industry, there are thousands of observers trying to get accurate financial information on the costs and how to start an e-commerce business in Nigeria or Africa.
Many blogs and financial websites write about the e-commerce industry, but the cost implications are never clear, and as a result, a lot of people trying to start an e-commerce business in Nigeria lose a lot of money because they were misinformed. Here and now, you will learn the mistakes new e-Businesses makes, the top strategies of running a successful e-Business and the total amount needed to start the e-Commerce business here in Nigeria. Are you ready? Lets get started:

Table of Content:

1: The Mistakes New E-Commerce Businesses Makes
2: Top E-Commerce Marketing Strategies
3: The Costs of Building an e-Commerce Business in Nigeria

1. The Mistakes New E-Commerce Businesses Makes

As the African market slowly shifts towards the online space, more e-commerce businesses are springing up everyday. While a large amount of online stores is essential, both for a healthy competition and better customer incentives, not paying attention to some important factors can hinder the growth of many players.
There’s a baseline that must be met by new e-commerce businesses in Nigeria or anywhere in the world. Launching without paying attention to these conditions wouldn’t just be both fool-hardy and reckless for any entrepreneur that makes the plunge, but could put the founder out of business as soon as possible. Now, let’s see the 3 biggest mistakes new e-Commerce businesses makes:

14 Top Mistakes of Entreprenuers

I. Launching with an empty online store:
This is the problem many new e-commerce businesses have. They launch with little to no product items listed on their websites. If your online store is going to sell only a very few selected items, then the website should be well designed to look like it only sells those few items.
Imagine a brand like Chanel building a website that looks like Amazon’s. It’s a total no-brainer, knowing they release only a few collections per season.
First impressions are everything. When you launch an empty or low-volumed online store and start using various marketing strategies to get visitors to your website, upon arrival, they’d skim through, leave, and probably never return. Without the right resources in the right basic volume for the right type of customers, you’d be throwing your efforts to the wind.

II. Immediately spending a lot of money on ads:
This is probably the biggest mistake many new e-commerce businesses makes. Because you see the largest players spending hundreds, and sometimes thousands of dollars everyday on both online and offline ads, you take the little startup capital you have, and begin to flush it down the ad drain.

In the below topic, you will see how to spend money on ads and not immediately after launching your e-commerce business. Social media advertisement may help you to get started as a new business before spending thousands of money on ads.

III. Not gathering enough data on time:
Many new e-commerce businesses don’t know their average daily page views, daily unique visitors, what pages get visited the most, what items get purchased or returned the most, what items get ignored or inquired about the most, what their real daily running expense costs are, their customer acquisition cost, what customers have to say about their service, and a lot more.
Data is very crucial to the growth and survival of any business. Operating without data is like walking blindly. You don’t really know where you’re headed, so what you’ve got are your instincts and feelings. The sad truth about basing decisions on hope or feelings is that hope is not strategy, and mostly only leads to endless disappointments. You strategize so you may control what comes next, and that’s the best course of action for any new business or executive.
Without the right data, your business could come to standstill and eventually crash out. Keep records by using tools like QuickBooks, Google Analytics, Survey Monkey, and a host of others. Then a good understanding of your data will lead you in the right direction.

2. Top E-Commerce Marketing Strategies You Should Know

The e-commerce industry is a hard nut to crack for many entrepreneurs that dare to get in. In countries like the United States (US), the long rooted history of e-commerce has gradually made it one of the most assuring internet businesses anyone could venture into. But in countries in the developing world like Nigeria and India, the industry still faces tremendous set-backs.
How then do small businesses with ambitions of becoming one of the future largest players in their local e-commerce market scale, or the very least, generate some reasonable revenues? What marketing strategies should these online small business owners execute to turn a profit?
While major players already with funding from angel investors & venture capitalists burn through thousands of Dollars monthly to barely achieve a positive cashflow, a few other really small unknown e-commerce companies have silently turned a reasonable profit for their size, even with the widespread clamour of unprofitability. Below are the top e-Commerce marketing strategies:

I. Start with a Plan
If a business wants to be successful in driving sales and leads from social, they need to have a clear digital strategy that incorporates social media. Each social network has different audience demographics, so businesses should strategically choose which outlets to utilize based on their target customers. Find a seat, pen and a book, and start writing your business plans!
When you’re starting an e-Commerce business, you should know how much you will invest in the business, and how much are you expecting to earn. Most of small business fails as a result of lack of business plan, and it is the greatest mistakes entrepreneurs makes at the beginning of their business.

II. Start from an online marketplace
Every successful business today, started small. Whether it was from a small store down the street, from an apartment, or from a store on an online marketplace like Jumia, Konga, Amazon, Ebay, and the likes. The importance of starting from an online marketplace, is to test your product focus, and also increase the volume of your merchandise.
Rather than chase down every investor you see around the corner, that’d most likely not pay attention to what you have to say, start by selling your products on online marketplaces. As they sell out, you’d learn more of what people want the most; the category, the colour, the style, and adjust your marketing strategies to focus your product re-stock preferences to those items.
Make sure you use your proposed brand name as your store name on the marketplaces, so that when you eventually launch your e-commerce business, some of your store’s existing & future customers, can always find you through google to see if you offer better prices on your website, and what other exclusive products you may have for sale. The great thing about this model, is that you don’t get to spend a dime yet, on ads, but you get enough time to triple, quadruple, or even quintuple the volume of your products before you fully set out to launch your own e-commerce website. And even after you’ve launched, remain on the marketplaces till you’ve fully figured out how to be fully independent of anyone.

III. The mobile experience is everything
While a larger population of Americans place product orders from their computers than their mobile phones, over 75% of Nigerians, place their orders strictly from their mobile phones. A great mobile experience in a developing nation as Nigeria or India, can never be emphasized enough!
Any e-commerce business that doesn’t have a wonderful, easy-to-use, and concise mobile site, can already be considered a failure. In an economy where almost everyone only makes product inquiries and purchases from their mobile phones, it would be outrightly dumb to not have a great-looking & fast-loading mobile site.
While a responsive e-commerce website is good, building a standalone mobile website to compliment it, is even better. The core reason is, the demographic that would visit the mobile website majorly only want a good-looking, but simple interface, that shows them only what they want to see immediately. And most often, the mobile-responsive look of the online store, doesn’t motivate the local users.

IV. Use smart email marketing
Target created a smart data mining tool that can almost accurately predict if a regular buyer is pregnant, and at what stage. This even drove a dad mad, to accuse Target of sending newsletters, recommending baby items to his teenage daughter, whom unknown to him, was actually pregnant. How did Target figure this out? The answer lies in probabilistic statistics harnessed from big data.
The best email campaigns are the types that sends the consumer, product recommendations and deals, based on their shopping behaviors.
A person who ships a car, probably needs someone to clear it from the port. A person who buys a Virtual Reality Headset, is probably looking for a badass war game to play it with. And a person who purchases a suit, probably also needs a great shoe, tie, or wrist watch to rock it with.

V. Build a social media engagement
Most people at some point, have experienced a time when an Instagram account was trending for having unbelievable items at very low prices. What’s more? These Instagram accounts from time to time, could post a photo of the team outing, a cute puppy, what they’re having for lunch at the office, and other enticing creative content. A perfect example, is Asos.
A social media experience that would make your followers wish they could be a part of your team, is an absolute win. This first means that they’re already in love with your brand, are probably already your customers, and constantly profess their love for your brand to many people in their circle.
The key to growing a great social media experience is to curate interesting content people would love to talk a lot about, and also share.

VI. Consider free & fast shipping as a bonus
The phrase, “free shipping”, has closed a lot of sales. People feel a bit more motivated to buy, if they know they probably won’t be paying any shipping cost; especially when the free shipping clause can be effected after their purchase meets a reasonable minimum price. But what marketing strategies motivate people to act, even better than free shipping? Fast shipping!
According to some scientific researches, fast shipping motivates more people to place orders, than free shipping. People would pay a little more to save their time. Although the demographic covered in this research may not have similar cultures to many other demographics around the world, offering both free & fast shipping, could improve your chances of converting a potential customer.
In the developing world, free shipping has more impact over fast shipping. Since the per capital income is low, people want to save even more money, and wouldn’t mind waiting a little longer to get their orders delivered. The only downside to this, is that free shipping would cost every retailer a lot more, and some customers might change their minds about the order, before it gets delivered. So what’s your best bet? Offer both free & fast shipping!

VII. Try social Ads
Advertising on Facebook has proven to be one of the most effective channels to promote an online business, and grow its sales. For fashion based businesses especially, the two best environments to try out your advert marketing strategies are both Facebook & Instagram.
Most people on Instagram only want cheap, but great-looking items. So you’d have to channel your ads correctly. Advertising if done wrong, could tank your operating budget. Find someone experienced with the gimmicks of social advertising, and have the person put you through on how to achieve a lot more with a lot less (at probably $0.01 per click).
Top Valuable Tips To Help You Improve Your eCommerce Store

These e-commerce marketing strategies are already being used by multiple small businesses to grow their online revenues. You too can use them today to build your own e-Commerce business successfully. Now, let’s see the cost of building and e-Commerce business in Nigeria.

3. The Cost of Building an e-Commerce Business in Nigeria

Here, I’ll be breaking down the total setup and running costs for anyone who needs information on how to start an e-Commerce business in Nigeria. This will help you better plan and adjust your budget before you take the big step.

Here’s a detailed cost estimate on how to start an e-commerce business in Nigeria:
1. Website Setup: N12,000 ($33)
First thing you will need to do is to setup the website for your e-Commerce. A domain name for your website is compulsory – not higher than N4,500 ($12.64). Setting up your website include the designing of logo and banner, shopping cart - You can start with WooCommerce powered by WordPress, OpenCart or PrestaShop. This shopping cart are free to use. Website hosting, which may costs you about N1,406 ($3.95)
10 Steps to Create Your E-Commerce Website

2. Small Office Space:
Free (Start your e-commerce business from your apartment. Don’t rent an office space. You are very likely to regret it if you rent an office. Hardly will any customer visit your office. As your e-Commerce business grows, you can expand and move out).

3. Office Furniture
After you get a small office space, the next thing remain for you is to buy your office furniture. (Four office chairs and a table). These are the office furniture needed in your small office and will not cost you less than N40,000 ($112.36)

4.Communication Tools
In order to run your e-commerce business wherever you are in the world, you’d need to communicate with your customers or have the full administration access on your e-commerce website.
These include; two laptop computers (N194,000 i.e $544.94), Internet Modem (N6,000 i.e $16.85), Internet Monthly Subscription (N12,000 i.e $33.70). The total amount will be N200,012 ($561.83). If you already have computers, even better. Remember, the goal is to totally cut costs.

5. Shipping and Delivery
You can’t depend on the couriers for everything. You’d need to handle most of your local deliveries yourself to cut cost and better build a good reputation for really fast deliveries. I recommend a bike to get started, and even two delivery bikes will costs you N40,000 ($112.36).
For everyone else, we’re going to need a courier and shipping services. Post office in Nigeria are not functional and very slow so you can’t use them to deliver your products except you want to go bankrupt soon. Still, dispatch rider is needed. The salary here depends on the salary both you and the staff negotiate. You could pay him as much as 100,000 and even lower. It’s up to you.

6. Company Registration
For establishing your new e-commerce company you should consider registering it. Registering a business in Nigeria can give you a lot of benefits, and the process is easier than you think. This will not cost you N21,000 ($58.98) only.

7. Advertisement
Advertisement is one of the top steps to grow your e-Commerce business. To get in front of your potential customers, you need to rank very high in search engine results by optimizing your product listing using keywords or frequently used search terms. The best way to stay on Google front page is through Google Adwords, so utilize it to increase your sales. Also your potential customers are on social media make use of adverts to reach them on their profile or timeline. Let them know you exist and have solutions to their problems.

How to Boost Your E-Commerce Sales on Social Media


These amounts could vary. They could be slightly lower or multiple times higher, depending on the e-commerce business plan and budget. These costing are based on an exchange rate of N356 to a Dollar in Nigeria.
Marketplace still remain the best place to start your ecommerce business in Nigeria. However, limiting yourself and business to marketplace is a dangerous gamble that you will loss on the long run. You don’t really need to build your ecommerce website in a rush when you start. You can use marketplace to test your product idea because they have millions of buyers ready to make a purchase decision immediately.

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Mohiddeen Ahmad

I am Mohiddeen Ahmad, the fountainhead of Flowdiary Blog. I Manage this blog and post articles relating to Entrepreneurship, Online Marketing, Technology, Blogging and more.. Stay updated on Facebook, Google+, Twitter, Instagram, and YouTube

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