How To Start An E-Commerce Business In Nigeria: The Comprehensive Cost

Here is how to start an e-commerce business in Nigeria with the comprehensive costing.
Electronic commerce (e-commerce) is a hot new trend in Nigeria and Africa. Multiple e-commerce businesses spring up everyday, with several selling items from different categories. While there are already big players in the Nigerian and African e-commerce industry, there are thousands of observers trying to get accurate financial information on the costs and how to start an e-commerce business in Nigeria or Africa.
Many blogs and financial websites write about the e-commerce industry, but the cost implications are never clear, and as a result, a lot of people trying to start an e-commerce business in Nigeria lose a lot of money because they were misinformed.
Here, I’ll be breaking down the total setup and running costs for anyone who needs information on how to start an e-commerce business in Nigeria. This will help you better plan and adjust your budget before you take the big step.
These costings are based on an exchange rate of 300 Naira to a Dollar in Nigeria.
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Here’s a detailed cost estimate on how to start an e-commerce business in Nigeria:
1). Website Setup: 200,000 Naira ($666.67)
2). Payment Integration: Free (Use Paga, Paystack, or Flutterwave! There’s no point spending money on integration fees when there’s a reliable free solution).
3). Domain And Website Hosting: 4,500 Naira ($15). This is a monthly expenditure.
4). Website Logo With Three Initial Banner Designs: 35,000 Naira ($116.67). Find an affordable and creative designer. He/she would work around a price like this or lesser for you.
5). Small Office Space: Free (Start your e-commerce business from your apartment. Don’t rent an office space. You are very likely to regret it if you rent an office. Hardly will any customer visit your office. As your eCommerce business grows, you can expand and move out).
See Also: Top 6 Reasons Nigerian E-Commerce Businesses Are Losing Money
6). Four Office Chairs And A Table: 65,000 Naira ($216.67).
7). Two refurbished Laptop Computers: 150,000 Naira ($500). If you already have computers, even better. Remember, the goal is to totally cut costs.
8). Electricity Generator: 35,000 Naira ($116.67).
9). Generator Fuel: 20,000 Naira ($66.67). This is a monthly expense.
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10). Internet Modem: 12,500 Naira ($41.67).
11) Internet Monthly Subscription: 16,000 Naira ($53.34).
12). Delivery Courier Deposit: 17,500 Naira ($58.34). This amount varies per courier. One of the lowest is 17,500 Naira and the courier that offers this is ACE. They’d handle all you deliveries nationwide, and also collect cash on your behalf.
13). Two Delivery Bikes Plus Branding And Helment: 600,000 Naira ($2000). You can’t depend on the couriers for everything. You’d need to handle most of your Lagos or wherever state you’re located’s local deliveries yourself to cut cost and better build a good reputation for really fast deliveries.
14). One Contract Staff: The salary here depends on how you negotiate.
15). One Dispatch Rider: 30,000 Naira ($100). The salary here depends on the salary both you and the staff negotiate. You could pay him as much as 100,000 and even lower. It’s up to you.
16). Company Registration: 85,000 Naira ($283.34)
17). Stationery, Letter Head, & More: 55,000 Naira ($183.34)
18). Advert Budget: 90,000 Naira ($300). This is a monthly expenditure This calculation assumes you intend to spend a maximum of $10 a day on ad spend. $10 a day would produce very little sales daily. Maybe one or two items sold. So the higher your ad budget, the higher the sales from that stream.
19). Miscellaneous Expenses: 20,000 Naira ($66.67).
Total Expenditure Summing Up To The First Month: 1,435,500 Naira ($4,785).
These amounts could vary. They could be slightly lower or multiple times higher, depending on the e-commerce business plan and budget.
Read Also: The Top 10 Reasons Small Businesses Fail
NOTE: This e-commerce budget plan does not contain the cost of getting products to sell, photography costs and a lot more. All these combined, could run into several millions of Naira.
These costs are just a tip of the iceberg. Over time, you’d experience a lot of unexpected expenses, your ad spend would exponentially rise, and your general expenditure would sky rocket. How you handle these factors would determine how successful you’ll be.
Now, you know how much it really costs and how to start an e-commerce business in Nigeria.
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What are your thoughts on this article on how to start an e-commerce business in Nigeria or Africa? Let me know by leaving a comment below.
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Thank for your this cost analysis of starting an e-commerce business.I am about to venture into one myself, but the cost of building my site alone is about 55,000 (USD) , that’s Amazon standard, and i need to have what my competitors are lack, which we know honesty and customer services are major roles in this industry. how do you think , i can address this issue, in the most cost effective manner.
Hi Max
Don’t pay more than $3000 for your e-commerce store.
Truth is you can get a great and standard e-commerce platform for lesser than $3,000 in Nigeria.
The remaining $52,000 should be used in product acquisition, creating smart awareness, and adding value to your early customers.
Start small, or you may lose almost all your investments.
I trust you’d make a great decision.
If you have more questions, you can reach me via the contact form on the website or via mail through [email protected]
Thank you for asking.
with all this capital requirement target how much do you think someone can earn on this ecommerce every month if he start with this amount of capital thanks. i need your reply on my inbox pls.
Hi Kenny,
Currently, the eCommerce landscape (specifically online shopping) in Nigeria is not profitable.
Even the behemoths like Jumia and Konga are still not profitable yet.
So defining profitability on your terms, depends on if you’ll be the first to crack the market.
Do let me know your success rate.
Thank you for asking.
Hi Stan,
Thanks for sharing this contents with us. You made it super simple…nice one.
However, it’s scary to read again that it’s not profitable. If I may ask, what are your reasons for saying it’s not profitable.
Secondly, I have a mind of starting a multivendor platform like Jumia and Konga but on just one product line.
Do you think I should try this in Nigeria considering I won’t have any stock except what vendors upload to our site? We just handle marketing side and delivery.
What do you think?
Hi Yemi,
The answers are quite a lot to type here.
I suggest you place a call through the phone number listed on the contact page.
Thank you for asking.
Thanks so much for the business plan analysis for eCommerce.
And I want to establish eCommerce affiliate marketing website like that of (www.overstock.com)which will be able to integrat almost all those best eCommerce website globally.
I want you to helps me with cost of such website, what plugin cost, web hosting cost per month,Refurbished labtop/used laptop cost,Mordem cost, cost of Data to use per month, SEO cost, ads cost and any one which I don’t mention.
However, I will be also grateful if you could refer me to someone “atleast 3-4” to survey among them whose website development has an affordable, sizeable and moderates prizes and still have reach the standards of eCommerce affiliate marketing site.
Thanks You,
Adamu Idris
Hi Adamu,
From what you’ve asked, it appears you need a feasibility study.
Do send an email to [email protected] and I’ll respond accordingly.
Thank you for asking.
Wow…nice article you’ve got here. But I think there is a better way of minimizing this.
Please do share with us.
Hello Sir, the cost analysis did not include cost for marketing on the platform. From my understanding, if a site is not advertised, besides the SEO. Not much traffic would be on the site. Marketing cost analysis needs to be included.
Hi Simeon,
This is just a startup cost.
Marketing campaigns vary, and so, the marketing costs would vary.
Thank you for the contribution.
Dear Stan,
I found it very intereting, would uou tell me about the process to start a business in Nigeria, please? I am searching it on the internet, but I do not find it.
Best wishes
Hi Jorge,
Please read this article >>> https://startuptipsdaily.com/how-to-start-a-business-in-nigeria/
Also, we’ll be having a comprehensive free ebook available on the blog that explains everything. It will be ready by the month-end.
Thank you for asking.
Please, I’ll like to know if there are regulations such NCC registration or other agencies apart from the CAC registration.
Thank you
Hi Aliyu,
You currently don’t have to. But regulations could change in the future.
Do be on the look out.
Thank you for asking.
Than you
please i need you to help me build a website on the platform of wordpress because i have much ideal on that.
i want to be drop shipping salehoo
please let me know the quote
i lived in germany i hope i can meet up
Nice one. Though, I spent more than that when I started mine. It all depends on the marketing strategy one is applying.
Thanks for the insight.
However, could you partner with someone in building up his/her e-commerce Startup?
Thanks for the comment.
Please send an email to [email protected] regarding the partnership proposal.
Have a great time.