How to start a dropshipping business in Nigeria

Dropshipping is preferred by many sellers when compared to wholesale and retail. This is mainly because they don’t need to have items in stock before they can earn money. In this post, you will learn how to start a dropshipping business in Nigeria.

What is dropshipping, and how does it work?

Dropshipping is a smart alternative to retail business, in which the seller delivers a product to the customer without having that product in stock.

We can’t sell what we don’t have, so how is something like this possible?

Well, it’s actually possible. In fact, that’s what dropshipping is all about. Here’s how the whole process goes.

• A seller promotes a particular product
• An interested buyer places an order
• The seller asks for an upfront fee (like 30%)
• The buyer sends 30% of the price
• Seller adds his/her own money to the upfront fee
• The total amount will be sent to a wholesaler that has the item in stock
• The wholesaler will deliver the product to the customer
• After receiving the product, the buyer will send the remaining money to the seller

Simple, right? That’s how the dropshipping business works in a nutshell. 

Can dropshipping work in Nigeria?

Yes, it can. In fact, a lot of youths are already into the dropshipping business. You won’t literally be doing anything stressful, as you will be outsourcing the inventory and logistics to a third party instead of doing it yourself.

Instead of warehousing and managing your inventory, you will only place an order after a customer has requested a particular item.

Dropshipping vs wholesale: Which business is better

That depends on how you look at it. It also depends on how much startup capital you have.

If you have a considerable amount of capital, some investors and a registered business, then the wholesale business will be a good option.

If you’re starting small with an amount below ₦50,000, the dropshipping business will be a good option.

This is because you will only have to buy your stock after a customer has booked for it and paid some upfront fee (that’s if you ask for it). Your customer can be a final consumer or another retailer.

Is dropshipping worth it in Nigeria?

We can’t give a direct answer to this. However, we’ll list the advantages and disadvantages of the dropshipping business in Nigeria. That will help you in making the best decision before starting a dropshipping business.

Pros of dropshipping in Nigeria

1. Unlike its wholesale and retail counterparts, a dropshipping business requires very low start-up costs.

You can start with as low as ₦20,000 or even less, depending on the type and quantity of products you’re dropshipping.

2. You don’t have to buy or update your stock until a buyer places an order. 

3. You can work with more than one supplier (wholesaler) and sell many types of products to your customers.

4. Your supplier will take care of the shipping and logistics. All you have to do is convince potential customers to buy the product, receive an order and then forward it to your supplier.

Cons of dropshipping in Nigeria

1. You (and not the real supplier) are solely responsible for your customers. If there’s a fault with the product, all fingers will be pointed at you.

2. Your customers may be very angry with you if a product delivery is later than the due date. 

They may start thinking that you’re a scammer, and this will affect your credibility until the day when the product finally gets delivered.

3. You can’t know or do anything about the quality of the product, since you’re not physically in possession of it. Your best bet is to find a trustworthy supplier.

4. Unlike a wholesale business, dropshipping usually yields less profit. However, that’s not really a limitation, as it costs almost nothing to start a dropshipping business in the first place.

How to start your dropshipping business

Follow these steps to start a dropshipping business:

1. Decide which product(s) to sell

This is the first of any dropshipping business. Many newbies are fond of selling anything they can think of, which usually results in low sales.

Don’t forget that dropshipping is just like any other business. You need to do market and product research from time to time. You can use tools like Google Trends as well as social media platforms like Instagram and TikTok.

2. Find a trustworthy and reliable supplier

The supplier has the biggest role to play in any dropshipping business since he/she is the owner, manufacturer or wholesaler of the item you want to dropship.

The supplier also determines the quality of a product, which in turn determines the satisfaction rate of your buyers. You can spot a good supplier through their rating and reviews.

Most eCommerce platforms display this detail on the profile of each supplier. You can get good suppliers on Shopify, Amazon, AliExpress, and lots more.

Check this out: How to create online shop very easily with Shopify

3. Select a platform to sell your product

You need to choose a selling platform where you’ll upload the products you want to sell. You can use Shopify or WordPress to create an online store.

Preferably, you can use online shopping sites like Amazon, Jumia, Konga, Jiji and many more. Note that you can be present on multiple platforms. Just make sure you check each of them at intervals, to know if a buyer has placed an order.

4. Promote your business

This is another important process in the dropshipping business. You can’t just lie down and expect buyers to find you. You have to approach them and promote your business.

You should use social media platforms like Facebook, Instagram and TikTok to promote your products. You can also post them on your WhatsApp status, but sales will be restricted to your contact list.

5. Plan how your payments will be done

A dropshipping business involves you sending and receiving money at intervals. The frequency will be determined by the number of sales you have.

Nonetheless, it’s always good to have a reliable payment system that you can use to pay your supplier and also receive payments from your customers.

The best payment options for a seller in the dropshipping business are listed below. You can use them to settle payments both inside and outside of Nigeria.

• Stripe
• PayPal
• Paystack

Conclusion

So far so good, we’ve discussed how to start a dropshipping business in Nigeria. If you’re starting small, this business can introduce you to the world of entrepreneurship.

You don’t need to register your business, pay tax or follow standards set by a regulatory body. You have the freedom to sell many products to customers, set your own prices and market your brand.

Greatness from small beginnings!