The first time I heard about dropshipping, I thought it was something that deals with Ships and how they were being dropped inside the Sea. But reading further, I realized that dropshipping really is a business terminology for transaction between three parties – the buyer, the middle man (i.e., the dropshipper) and the seller. Today, I will show you how to start dropshipping business in Nigeria, discussing the pros as well as the cons of the business.
According to Wikipedia, Dropshipping is a retail business where the seller accepts customer orders but does not keep goods sold in stock. In layman’s terms, Dropshipping literally means a business where you don’t have to manufacture the product or have a store where you keep a product or products. Looking at it from another perspective, or to explain further, an example of dropshipping is when someone, let’s say Mr. A has a product, let’s say a Tennis Racket, for example, to sell at 15,000 naira posted on his website. You take the picture and information about the Racket, butter the information up and increase the price to let’s say 20,000 naira on your own website.
When a customer sees it on your website and makes a request for it, you take the order and the payment, then you buy directly from Mr. A at the rate of 15,000 naira and send it or ask Mr. A to send the product to the buyer. In all this transaction that took place, you have gained N5,000 without producing the product or having a store to keep or stock it. This is just the simple meaning of Dropshipping.
Dropshipping has been on ground for years and just a little amount of people know about it. It is a very lucrative business if done right.
The Pros and Cons of Dropshipping
Before you start Dropshipping in Nigeria, it is imperative to know the pros and cons of the business and some other steps to take.
The Pros include:
- No stock/ Inventory keeping required;
- Is easy and cost effective to start;
- It’s a trusted business model;
- Requires no huge capital upfront.
The Cons include:
- Has loads of competition and weak margins,
- Comes with lots of third party errors,
- There is uncertainty of Product Quality.
Steps to Start Dropshipping In Nigeria (Using Shopify)
(1) Build Your Own Store Through Shopify
The moment you conclude to start a dropshipping business, the first thing you will need to do is to build a website which basically serves as your store. It will be good if you start with Shopify because it’s the most popular e-commerce website which you will greatly benefit from. Shopify already has a platform for you to sell but put in mind that it is better you have a domain name or website address of your own.
It’s not compulsory to have a domain name before you start dropshipping on shopify.com but having one will greatly help because the purpose of having a domain name in this instance is to not allow people to know that you are dropshipping which could decrease the amount of orders you get. For example, assuming your business name is Oluwatobi. Without a domain name, it will be www.Oluwatobi.shopify.com on Shopify.com website but with a domain name, there won’t be “shopify.com” included.
To get this domain name from shopify, it will cost you $14 only. Shopify has different plans which include Basic, Standard and Premium plans. If you are new to dropshipping and/or shopify, it is advisable to start with the basic shopify plan. Shopify has different costs for the plans but the basic plan is the lowest and costs about $27.
(2) Choose the Currency to Use: Dollar or Naira Account?
Another point to keep in mind when starting dropshipping especially on a Shopify store is the currency. Don’t be tempted to use dollars instead of the Naira especially when you are dropshipping to Nigeria because it requires Paypal account and not everyone has Paypal account. It could happen that most of the people that will buy from you don’t have Paypal and they prefer to use their credit card as the payment option. Using dollar in Nigeria could be hard sometimes because there are times it is difficult to find a third party that accepts dollar in exchange for the Naira or any other currency.
The two most common Paypal dollar exchangers account are 2checkout.com and Cashenvoy but their processes are tedious for a starter and although Cashenvoy might be a good idea to start with, setup and use, it has a bad gateway. It will be very difficult to make sales with dollars. So, it’s better to start with naira when you are dropshipping mostly in/to Nigeria. To start a naira account, Paystack is the best to use. It is local to us here and easy to setup and use. Paystack pays directly into your account after you have integrated it to your shopify account.
(3) Choose The Best Supplier to Use
After setting up your Shopify account, the next step is to look for a supplier. We have a range of suppliers from known to unknown and examples are Spocket, AlieExpress, SaleHoo, Wholesale2B, etc. They are all dropshipping platforms that connect retailers to millions of suppliers and offer millions of products. Most of these dropshipping websites have a subscription plan of $19to $249 to sign up except AliExpress which offers a free sign up. It is advisable to start with AliExpress because of the free sign up and also because of the millions of suppliers on the website.
Now that you have your dropshipping store (i.e., using Shopify as your store) and AliExpress for product suppliers, the next step is to go through what you wish to sell on AliExpress. Once you’ve made your decision on the choice of product, simpy copy the product information and graphics and paste it on your Shopify store, rebrand the information about the product and change (i.e., increase) the price.
(4) Advertisement: Paid and Free Promotion Strategies
One of the catalysts of sales is getting quality traffic to your Shopify store. You want people to look through your website and order for goods. To accomplish that, you will need to run digital adverts (ads) either on Social media like Facebook, Instagram, Twitter, or on Search Engines like Google, YouTube and Google partner websites. Running ads on these platforms are not free. However, you can advertise free on these platforms although the results won’t be as good paid ads most of the time. You can start with free promotions on YouTube and when you start making sales, you upgrade to running paid ads on Facebook and Instagram. Also, you can put your dropshipping store links on your WhatsApp status and ask friends to also update their status with it. You may also send the link adverts to people on WhatsApp groups.
When you start getting orders and payments for a product, you simply go to AliExpress where the product being paid for was copied from, you then pay using the customer’s name and address and the product will be shipped directly to the customer with no much ado.
Dropshipping is a lucrative and nearly stress-free business. It is really flexible to do and does not take much of one’s time. The advantages outweigh the disadvantages. Starting dropshipping business in Nigeria might prove tedious at first but with time, after making sales and getting around it, it will prove to be one of the best businesses you have ever done.