It is no longer news that the e-commerce sector is one of the fastest growing businesses all over the world. Brands such as Jumia, Konga, and of course global brands like AliExpress and Amazon have become household names This is enough motivation to venture into the space either as an aspiring business owner or one looking at expanding your business.
E-commerce simply means the activity of buying and selling either goods or services online or over the internet.
So, let’s dive into the essentials of running an e-commerce business in Nigeria.
1. Business Structure
Before starting your e-commerce business, you need to first have a registered business. Having a registered business means that you would need to register your business with the Corporate Affairs Commission (CAC). You can learn more about this here.
2. Regulatory Licences
After registering your business with the CAC, you also need to ensure that you get the necessary regulatory licenses that apply to your business even though you will be selling online. If you are going to sell food, drugs or cosmetics, you need to get a NAFDAC licence. If you are going to sell financial services, you would need to get a licence from the Central Bank of Nigeria (CBN).
3. Online Platform
The next point of consideration is the online platform which you want to use to sell your products or services. On this, there are two things you can do – a) you can either sell your products on an already established site like Jumia, GTB MarketHub, Flutterwave Store, Paystack Commerce and Amazon or b) you can set up your own website and sell there. To sell on a pre-existing platform, you would need to register as a vendor and conform to their terms and conditions but the good thing is that they take care of all the web development, logistics, and marketing for you.
If you however decide to set up your own website, you should work with a web developer when creating your website and consider using platforms like WordPress to ease the work to be done. Ensure that you get a unique domain name i.e one that is not being used by another person. You should also get the login details to your website from the web developer and ensure that the web developer signs an Intellectual Property Assignment Agreement so as to prevent the web developer from laying claims to being the owner of your website. You will also need a secured payment gateway for your customers to pay for the goods or services they purchase on your website. Some popular payment gateway providers in Nigeria include Flutterwave and Paystack.
Now, there’s the issue of Tax. Every business is obligated to pay tax. The type of taxes you will be subjected to will depend on your business structure. However, if you are going to run an e-commerce business, you will need to collect and remit VAT. VAT is a tax imposed on the supply of goods and services. The tax is charged in Nigeria at 5% of the value of the taxable goods and services.
Let’s wrap this up by saying that the ‘hustle’ needed in growing a business offline is the same required to grow your e-commerce business so as it is popularly said, ‘double your hustle’