We grew up shopping from abokis, 'chemists', kiosks, shops, supermarkets, and other 'brick and mortar' stores around us. Within the past 2 decades, all that is changing with the likes of Alibaba.com, Amazon, eBay, and other global brands. We are not left behind, with online stores like Jumia, Konga, Kaymu, Dealdey, and Dealfinder.

Access to the internet has increased considerably, especially with the number of smartphones owned by individuals. The popular GSM Networks like MTN, Glo, Airtel, and Etisalat, have introduced affordable data plan, with easy activation codes. Statistics shows that there are over 96 million internet subscribers on these mobile networks.

Internet subscribers are increasingly getting news much faster these days. It's not surprising to hear gists about celebrities like Wizkid, Davido, Tonto Dike, PSquare while it breaks. Or is it our ever entertaining political gladiators like Dino Melaye, Bukola Saraki, Bola Ahmed Tinubu, Abdulmumin Jibrin etc. The internet has 'fueled' whatever it touches, not just in business, but also every area of our existence.

Becoming a player in E-commerce doesn't mean jumping into any opportunity that promises mouth-watery returns. I have learnt my lessons from past experience trading online forex. I'm still paying back my debts from this misadventure. I can't say much about online betting cause I've never ever taken part in it. Though I'm in support of the ban of its promotion on Nairaland by Seun, cause I'm yet to see any value it adds to those involved (strictly my views).

I can however say much about e-commerce cause of the many benefits it offers to everyone. Those involved in charity, services, goods and whatever form their value is delivered. That is the purpose of this thread.

Let's look at the first decision you have to make while setting up your E-commerce Business

New Platform or Expand Existing Business?

At the early stages, businesses that fail are more than those that succeed. The primary cause of this is insufficient and inaccurate information before starting out. Not capital, capacity, or skill, but the right information. That’s why some businesses that rushed into E-commerce found themselves rushed out of it.

Bola is in his 40’s, owns a thriving clothing business. He produces customized dresses for ladies, complete with designs of the best embroidery and beads. His clients are rich, and willing to pay premium prices for his designs.

Kalu is a student in one of the universities in the South West. In order to make up what he receives from parents, he engages in buying and selling of clothes to his schoolmates. His customers are not wealthy, so he has to source for his clothes at the best price, to make reasonable profit. The major threat to his business is credit sales.

Bola and Kalu are both in the same industry- fashion. Yet cater to different classes of the market. Taking their business online could lead to more sales, profits, and growth. But, getting the best results means they both approach it differently.
The 2 Modes of Operations Available for Your Business

There are 2 modes of operations to choose from when taking your business online.

1. Extension of your business through e-commerce. Desired option for a well established business. Brick and mortar is a phrase used to refer to businesses with only physical operations. You had to visit them physically before businesses could be transacted. With the advent of online business, a business with both online and offline operations is now referred to as ‘Click and mortar’.

This is the preferred option for Bola. Since he boasts of a considerable customer base. He will need to set up his online store, or sell on any online marketplace. Then integrate his inventory for both operations. That way he can service existing clients and still grow his customer base by reaching out to those who are geographically dispersed, yet desire his kind of services.

2. Migrate full operations online. Kalu doesn’t have an established business, he runs his business from his hostel. Moving the operations of his business online would provide him with the best leverage. He can ship on order, display as many different products, doesn’t need to hold inventory. And best of all, items bought are all paid for. No credit sales.

Before you make the choice of expanding your business through E-commerce. You’ll need to decide if it’s best to extend your business, or simply move every aspect of your business online. Both options have businesses that have being successful in operating them, you could too.

The Right Business Model For You

Understanding the different types of business models applicable will help in deciding which works best for you.

Defining what value to create, for whom, how to deliver it, and revenue stream, will give you a lot of clarity. It will always define the most effective and efficient business model for you. There are currently 4 main E-commerce business models available, any of which is suitable giving your business needs – B2B, B2C, C2C and C2B.

Business-to-Business (B2B)

As the name implies, B2B is a platform where businesses (producers, manufacturers, wholesalers) sell to other businesses (wholesalers and retailers). The volume of transactions are usually large, and each party can further negotiate prices.

Products that are resold in smaller units, products that are used as input for production of finished products, and professional services are sold using this business model. Best known example of B2B is Alibaba.com.

Business-to-Consumer (B2C)

Using this business model, businesses sell their products and services to consumers in retail units. Prices are already fixed, and consumers have the option of either paying online while making orders, or Cash on Delivery (CoD) when the orders are received.

B2C stores are the most common among the others. Examples of these are Konga, Jumia, Kaymu and Dealdey.

Consumer-to-Consumer (C2C)

C2C is an online business model that allows consumers to sell their items (products, services, information) to other consumers. New and used items are sold here, with guarantee that they are in good working condition.

There are lots of examples of C2C sites, and new ones springing up daily. Classified and Auction based websites fall into this model. Examples are OLX and eBay.

Consumer-to-Business (C2B)

It’s the E-commerce business model where consumers can offer goods and services to businesses, and get paid. This is a reversal of the traditional B2C business model.

Consumers provide services that businesses need, and receive payment based on pre-agreed terms. Freelance websites, affiliate, blogs, internet forums, work with this model. Examples of these are elance, guru, nairaland etc.

Your choice of business model will determine the kind of products you sell, how you market, sell and distribute them. None is better than the other, you just need to find one that perfectly aligns with your business objective.

Nice one Op.

Wingerman:
Nice one Op.

Tx

Fundamental Drivers of E-commerce

Jack Ma, founder of Alibaba.com, insists that Alibaba is not an online store, but a service provider that helps others to do e-commerce. In differentiating his platform, he likened Alibaba to an e-commerce infrastructure that facilitates other online businesses. A service provider that has consistently grown since inception, and as of 2014 handled about 80% of China’s e-commerce sales.

Nigeria, and in general Africa, has being playing catch up with the rest of the world. After overcoming a late start, the continent has shown that it is ready for e-commerce business for building enterprise in its budding markets. With the support of the right infrastructure and technologies, we could see e-commerce sales exceeding traditional sales volume before 2025.

Infrastructure refers to the fundamental drivers of economic activities. For e-commerce, infrastructure are the support technologies that have made online business transactions possible. All around the world, this infrastructure has being built and maintained by business organizations. With government playing regulatory roles in certain aspects of the sector.

Key infrastructure needed to drive e-commerce in Nigeria, and position her rightly as an attractive hub are online payment, logistics and internet access.

Online Payment

Internet security remains the major reason for late mass adoption of online business transactions in the country. Skeptical that payments made online will expose their financial information, most preferred to pay with cash for products bought. That’s why Cash on Delivery (CoD) is a preferred option, and widely accepted. However, this fear has reduced considerably, due to advancement in internet security, and increased awareness among shoppers.
Logistics

Traditional method of supply chain meant products flowed from suppliers, to manufacturers, and then to wholesalers to retailers, and finally to the consumer. It usually took months to get to the consumer after production. But with e-commerce, logistics has evolved with fast and efficient delivery to match consumers growing demand 24 hour, next day delivery, and real time order tracking has become industry best practice.
Internet Access

Nigeria is currently ranked 7th in the number of internet users globally. With over 92.6 million of its population having internet access (about 51.1% of its over 182 million population). This largely fueled by the increased penetration of mobile internet provided by the GSM networks in the country. More people are increasingly involved in electronic commerce as a means of convenient shopping. In the near future, this figure will increase considerable, creating more opportunities for e-commerce players.

Infrastructure precedes profitability and growth. And it’s an accurate indicator of the direction that economic activities will take. With e-commerce, there is increasing participation in every sector of the economy, a clear indication that we are yet to tap into its full potentials.