Last updated on February 17th, 2018
With the trend at which e-commerce business is thriving in Nigeria and few other African countries are alarming. There are many individuals with quality product ideas hoping to start an e-commerce business but were unable to achieve their ambition because they were misinformed or they were unable to reach the cash requirement of setting up an e-commerce business.
Starting an e-commerce business from the scratch is relatively risky due to the cost of setting it up to a good standard and the cost of investing in stock inventory and logistics; you can check this article for the detailed cost of setting up an e-commerce business in Nigeria.
What if there is another way round to this, what if there is a way to start your e-commerce business without investing in stock inventory or paying to sell your product in marketplaces like Jumia, Konga etc. and also without paying a commission on each product you sell.
In this post am going to write on how to start an e-commerce business in Nigeria, Ghana, Kenya, Uganda and most developing African countries with zero cash investment.
This model I’m going to teach us is called dropshipping. I’m going to give you an example why dropshipping can be the best choice for your business. Here is an analogy of how it works.
Let’s say you’ve decided on starting your e-commerce business. Your next step after paying for your website is to come up with a product idea, source for a supplier and acquire the products by paying for it and stock them in your store while you look for buying by marketing your products.
The problem here is that it’s all a risk; you don’t know maybe your product will sell well or even if it’s going to sell at all. The risk is just there. Take a look at this:
- Sonia stocks her warehouse with 50unit of a particular product line, paying $500 for them.
- Sonia was only able to sell 10 products and she brings in $100 in her total sales.
- She now realizes that the market for this product is low and decided to close her e-commerce store
- At the end, she experiences a loss of over $400
In the above analogy Sonia invested $500 in her stock inventory without the cost of creating her website and at the end, she only made sales of $100 and she realizes her product line is not visible or she doesn’t know how to properly market her product and she decided to close her store.
The bottom line is that she made a loss of $400 on stock inventory without the cost of setting up her business.
Alternatively, let’s look at drop shipping the Zero-Cash Investment e-commerce business.
If Sonia had tried drop shipping she would have made a profit of $50 from the $100 sales she made even when the product is not visible for her business. Here is how it’s going to work:
- Sonia uses dropshipping (zero cash investment), so she didn’t pay for the products in advance
- She manages to sell only 10 products because she didn’t choose the right product or she didn’t do enough marketing and made $100 in total sales.
- She then order the products from her supplier with the money her customer paid her and the supplier have them shipped to her customer directly.
- She now decides to invest in proper marketing or change the product to a better one so she can have more sales, but at the end, she still happy because none of her money was involved and she still makes a profit of $50.
So that the beauty of dropshipping, because you don’t have to buy a product before selling it and you likewise don’t have to spend your hard earned money on stocking inventory.
A quick overview of dropshipping
Dropshipping is an e-commerce business whereby a store does not keep the product it sells in stock but instead when the store sells a product, it purchases the item from a third party supplier and has it shipped directly to the customer.
How to start an e-commerce business by dropshipping
You can create a perfect dropshipping business with this easy step just by taking it a step at a time, so let’s get started.
- Choose a product to sell
- Lunch your website
- Find a supplier
- Add products to your store.
- Market your products
- Start marking sales
Choose a product to Sell-
When it comes to dropshipping choosing a product to start with is often the most difficult and time-consuming task, but for the purpose of this challenge try to stand out from the crowd.
This list should help out while researching the products to sale:
- Browse other stores
Take your time to check other stores and check through their product list and see their best selling products. You could browse through stores like Konga, Jumia, Payporte, AliExpress etc.
- Avoid broad Categories
Avoid going for the broad products but instead, focus on niche products that are underserved by the big stores or with less competition.
- Search for product you can sell for less than $50
The reason why you should start selling low is to win your customer trust. For example, which one is going to be easier for a customer that come across your store for the first time, to buy a product of $500 or a product of $50? It’s definitely going to be the $50 because they might be comfortable spending $50 on a store they know nothing about compared to spending $500, it going to take a big level of trust.
- Use Google Trends
Most importantly when you’ve decided on the product you want to sell use the Google trends tool to explore the market trend for the product. To do this go to Google trend homepage hit the explore button type the product idea and wait for the trends. Products increasing have a promising market than the one decreasing.
Launching your website
Shopify is a website that allows you to create an account with them if you want to sell your product online. with Shopify you are totally in control of your store you can sell whatever it is you want and you don’t have to pay any commission on your sales compare to other marketplaces Like Jumia, JiJi, Konga etc. where you have to pay 4-20% commission on sales and monthly charge after you’ve paid your one time registration fee.
Shopify offers a 14days free trial for you to sell with them and all profit made is yours without any commission fee on your sales. After 14days you will be required to pay for a plan. Their basic plan is $29 per month no extra charge all profit made on your store is yours.
Setting your website with Shopify is relatively easy you don’t have to have a prior knowledge is just like registering for an account and everything will be up within five minutes.
For you to create your account just follow these simple steps:
Remember our plan starting an e-commerce business with Zero Cash Investment, after 14days its either you’ve made your $29 from your store or you will have to pay the $29 for your store so the choice is yours, so if you want to do this, you have to be committed, I’ve seen store made sales of $500 within the 14days days trial. It’s very doable you just have to follow these steps and be fast about it.
- Choose your Store Name
Choosing a store name shouldn’t be a big deal right now you can just pick anything simple and roll with it. For example Shopdeals, fastshopers, trendydeals etc. after you’ve decided what your store name is going to be, then go to Shopify.com, and click “Start your free trial”, enter the name you choose and click “Create your store”
- Choose your store theme
The next thing here is to choose your theme. Visit the Shopify theme store and choose a theme, there are many themes and to avoid wasting of time, try and choose a simple one that will require no changes.
Try and locate themes like New standard, Supply and Simple they are among the few popular selections. Create a logo and add it to your page.
- Create your Standard Pages
These pages are very important and before launching your store, make sure these pages are ready:
- About Us
- Terms and Condition
- Privacy and return policy
- Shipping and delivery information
- Contact Us
- FAQ page
- Required policies
To create these pages, visit – Online Store – Pages – Add page.
To create a Contact page, click the Add New Page button and change the template to contact.
To create the policy pages, go to setting – Checkout – scroll down to refund privacy, and TOS statements section to generate each of the policy samples. You don’t need to write a new one, just click on the generate icons
- Add your Payment Gateway
Connect your payment gateway to your store so you can collect money from your customers. For merchants in Nigeria, they can make use of Paystack, while Merchants in Ghana and Kenya can make use of Ravepay. For you to connect your account you have to integrate it by copying your API key from your Paystack account to Shopify.
- Add your Billing information
Before you launch your store you have to add your billing information but you won’t be charged until the 14days trial expired.
Find a Supplier
Now that everything is set we need to start looking for suppliers. Like I said earlier the tool we are going to use to accomplish this task is Shopify and AliExpress.
AliExpress.com is an online retail service made up of small business in China and other parts of the world offering products to international online buyers.
Here is how it works:
Look for the product you want to dropship on AliExpress.com contact the supplier that you want to dropship the product – add your customer details and the supplier would have it shipped directly to your customer.
In fact dropshipping can be done at times without contacting the supplier, you just have to add your customer address to the product you are buying on AliExpress and your customer will receive the product. But to be on the safer side tell them you are dropshipping their products.
Tips for locating a good and reliable supplier:
- Look for supplier with 95% Positive Feedback-
While browsing AliExpress.com just to be on the safer side, look for a supplier with 95% and above positive feedback rates and at least 2000 feedback score.
It will be safer for you to buy a product that has been ordered over a few thousand times with over 90% positive feedback score than you being the first buyer or buying a product that has been ordered for just a couple of times.
- Check the supplier response rate
On a normal day these might not be necessary but just to prepare yourself for the unforeseen circumstances. For example, let’s say your customer said his/her product was not delivered. In this kind of situation, you definitely want a swift response from your supplier right?
So in other to prepare against such, before you order the product try and check the response rate before you order the product.
Once you’ve found a constant reliable supplier you can even create a relationship with them by getting their contact and talk business outside AliExpress, some might even give you a discount once you’ve become a regular buyer with them.
Add Product to your Store
Once your store is set up and you’ve located your supplier the next thing is to add products to your store. These can be done manually or through the use of plugins.
After locating your product on AliExpress copy the pictures and paste them on your store then re-write the detail by setting your own price. Avoid copy and paste of the content to avoid being penalized by Google
Another way to do this is through the use of plugins like Oberlo, with Oberlo it’s relatively easy once the app is activated in your store, you can easily import the product picture and details from AliEpress.com to your store with a single click then edit the details yourself, and also when a customer purchase the product the plugin will export the customer details to the supplier automatically, while the supplier shipped the product directly to your customer.
PS: while importing the products from your supplier website make sure you keep a record of each products and most importantly a link to each product. This will help you avoid the stress of searching for the products on the big AliEpress.com website when you made a sale.
Market your product
I believe everything we’ve discussed can be achieved within 4-6 days or less so we still have 7-8 days of making sales.
There are various ways you can market your products but the first one we going to look into is:
Facebook still remains the best way to market your e-commerce business because of its large audience. There are various groups you can join on Facebook to market your product, but avoid spamming the groups to avoid Facebook ban.
Facebook ad is the best way to reach a vast majority of people, you can create a Facebook ad of less than $10 and still reach thousands of audience and you can do more but it depends on your budget.
When it comes to product display Instagram is a very powerful tool to do that, but growing a new Instagram can take a lot of work the best thing to do is to contact lists of influential Instagram profiles and ask them to promote your products for you. Some may be your friends while others will require you to a fee based on both party agreements.
Search engine optimization is also a great way to drive traffic to your website, write content about your product and optimize it using the product keywords or you pay for Google AdWords and whenever your product keywords is typed on Google search engine it’s going to bring your content leading them to your site
- Blog Forums
Another way to easily market your product for free is by joining forums. Create an account with as many as possible and advertise your product with compelling picture and writes ups, include a link to it so as to direct them to your store. A popular forum in Nigeria to join is Nairaland.com.
Start marketing sales
Remember the case of Sonia? The best thing about dropshipping is that it allows you to validate products. If you have a product in mind and you’re not sure you going to get sales for it, add it to your store and test it!
If it doesn’t work as predicted you can then remove it and test something else that’s just the joy of dropshipping you are not paying for the products and this makes the risk minimal.
If you tried and it didn’t workout in the first 14days that shouldn’t be end of the road all you need is just commitment to keep pushing, infact this business is yet saturated so it still has a lot of potentials.
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let me know how it goes by sharing your experiences in the comment box or do you need my help? please don’t hesitate to ask. Stayed tuned.