In this post am to going to write on a profitable and fast growing e-commerce business called dropshipping. Drop shipping requires no or little investment unlike other e-commerce business where you have to invest in stocking of products and even at that it’s yet to be fully embraced in Nigeria and the few that’s knows about it don’t even know how to run it successfully. Drop shipping allows you to run a successful store online without investing in inventory or a warehouse, you don’t have to have a product of your own before you start making money with drop shipping, all you have to do is sell other peoples product and make your profit.
I’m going to write on the Pros and Cons of dropshipping in Nigeria, what makes it an ideal business to embrace and in my next post am going to write on how you can successfully set up your dropshipping business, so sit tight and enjoy the ride.
What is Dropshipping
Dropshipping in the easiest form is simply selling products you don’t own to customers through the help of the third party supplier or wholesaler. When a customer made a purchase on your store, what you do is you simply use their purchase payment to buy the actual product for them from a third party supplier by sending their details to the supplier who then makes the shipment to your customer.
Here is the breakdown
- You place a product in your store… your online store, for example, www.jumia.com this product is just the description and pictures because you don’t actually own the product.
- An interested customer saw the picture of this product on your store and makes payment to purchase it.
- You contact the supplier of this product and make payment as your customer
- You send the customer address to the supplier and ask him/her to make the delivery to your customer address.
- Your customer receives product and the deal is done.
However how simple it may seem, being a successful Dropshipper comes with a level of commitment and lots of research. Now before we start any drop shipping business we must put into consideration the supplier and the products to sell.
As a newbie or a beginner in drop shipping you need to choose a niche of product to start selling, most people are often tempted to start selling anything they can think of but the end result is often not palatable. Choose a product on the market trend but with less competition. It’s better to be a big fish in small water than a small fish in bigger water. It’s better to start small and grow bigger. Once you’ve decided on your product the next important task is to search for a supplier.
The success of any drop shipping business has a lot to do with the supplier, reason being that the suppliers are the backbone of your business, once your suppliers are full of disappointment this is going to have a severe effect on your business whereby your customer will start to lose interest in your store because most customers don’t know if a store is a drop shipping store or not. Their concern is to purchase and get their product. The supplier has to be a reliable one, one of the things to look into when choosing a supplier is their reviews, a supplier with much larger reviews tends to fits into the specs of reliable ones compare to the one with much lesser reviews, another important thing to look into is their communication rate. If a supplier communicates well then this is a good sign. It is important to notify a supplier about your dropshipping plan before you made the sale, so as to avoid any complications. One of the most popular site to find whole lots of suppliers is ‘Aliexpress’ www.aliexpress.com though suppliers can be found through Google search engine. This can be done through the keyword search for example ‘herbal tea wholesaler’ or ‘herbal tea supplier’. When searching through the Google search engine it will be good to have it in mind that most of the suppliers don’t rank well in the Google result so an extensive research will be required, probably 7th to 10th Google search result page or even more.
Now am going to discuss the Pros and Cons of drop shipping, and do a comparison yourself if it’s what you can embrace or not.
Pros of Dropshipping in Nigeria
- No Experience Needed-
Drop shipping business is a really simple business that can be easily set up without a prior experience in e-commerce and internet marketing; most of the works are done by the supplier from shipping to stocking of the products, you don’t have to go through the stress of stock inventory and shipping of goods because all this are handled by your supplier while giving you time to focus on marketing
Drop shipping is a highly scalable business reason being that you don’t own the products yourself and you don’t pre-order them so you can easily add any products to your store and increase your available products.
- More Time to Think About Growing Your Business-
Drop shipping is not a time-consuming business, most of your work should be on how to promote your store, market your products and make potentials customers interested in your store. Most of the strenuous works are done by the supplier living you with enough time to focus on how to build your brand.
- No or little investment involved-
You don’t own the products you sell on your store so there is no need to stock a warehouse and even when you buy the product must have been after a customer had made a purchase on your store, so the investment or cost of running a dropshipping business should be on advertisement and set up of your store. Which of course am going to write about in my next post.
- Unlimited Customer –
Drop shipping is an internet based type of business “e-commerce”, having your business online gives you an access to the international market thereby increasing the chance of your sales. Drop shipping allows you to connect with customers across the globe no matter the language or location
- Total freedom-
Since you don’t have a stock inventory or a warehouse you can easily work anyhow or from anywhere you deem fit for your business. A physical location is not needed for a Dropshipping business all you need is your PC or mobile phone and internet connection. Drop shipping gives you the chance to live the kind of life you’ve ever wanted to live while making money in the process.
Cons of Dropshipping in Nigeria
Like every other business dropshipping itself has its own shortcomings and at the end of this post, I hope you are able to know what works for you.
- Low-Profit Margin-
The low margin is one of the biggest disadvantages in operating in a highly competitive market. Dropshipping requires little or nothing to set up so there are lots of drop shippers going for the popular niche and making a profit in such niche a competition. The best way to this is by going for a less competitive niche.
- Shipping Complexities-
Shipping complexities are one the disadvantage most drop shipper often encounters. Running a dropshipping business often requires you working with multiples suppliers and let’s say for example your customer order five items and all this item was sourced from different suppliers these means you will incur the cost of shipping from the different suppliers.
- Supply error –
Another error encountered in drop shipping is the error on the supplier side, even the good suppliers make mistakes of fulfilling orders and when such happens you have to take responsibility for such.
Like I said earlier success in dropshipping still requires a level of commitment and research but with a careful research and good planning most of the obstacles can be overcome and resolved and need not prevent you from building a profitable drop shipping business.
In my next post, I’m going to write a detailed guide on how to start and set up your store for a successful dropshipping business you can be scroll down and subscribe to our blog and receive fresh newsletters from us.
Ecommerce is thriving in Nigeria and dropshipping is the best shot in starting an e-commerce business with no or little investment required.