Entrepreneurs need to take e-commerce seriously

BY SIMON EJEMBI

Omiete Charles-Davies
| credits: Simon Ejembi

The Chief Executive Officer, Hormo Labs Limited, the parent company of online retail website, www.computervillage.me, Mr. Omiete Charles-Davies, tells SIMON EJEMBI why business owners should take advantage of the Internet to grow their companies

Benefits of e-commerce

E-commerce is about doing business on the Internet; that is buying and selling or offering a service on the Internet and it involves the exchange of money. Entrepreneurs should be interested in it because there are so many benefits. For instance, the amount of money you spend renting a shop will get you a fully functional website. Also, you don’t have to do a lot of monitoring because many of the Internet sites are built with accounting applications that can tell you the progress made. In addition, you don’t need so many workers because, especially when you are running a small business – all you need is your supply and delivery systems. With Nigeria having power problems e-commerce is also good because it protects your business from power outages. Your website basically is not hosted in Nigeria, so you won’t have the site going off when power is down. Another benefit is that you can access your business from anywhere; if you are out of town, all you have to do is just log on to your computer and you can manage your business. E-commerce is also financially rewarding (beyond sale of goods and services). There are things we call web adverts; once a lot of people visit your website, you can start advertising on your website and people will have to pay to be able to have their adverts displayed on your website. So, there are a lot of gains when it comes to e-commerce.

Getting started

The first thing is to have an idea, one you have properly thought about and consulted the relevant authorities in that field. You also have to weigh how functional or effective your idea is and how people are going to respond to it. Then set up a website; employ a web designer, graphic artist and a few workers.

The amount of workers you need to employ depends on how big your business is or your line of business. For example, if you doing a business, which requires that you ship products, you can have contracts with different companies – courier services, suppliers, etc.; all you will require then will be workers to handle customer care and logistics – you may not need up to 20 direct members of staff. But if it is small scale, with five workers you can do well.

You also have to control the content of your website – make it attractive – then make your offers as they are and be sincere about them – that is the most important fact because Nigerians are beginning to trust the Internet a lot. So, if you can keep up with the trust, the industry welcomes everybody that can offer reliable services.

Publicising your website

If you are a small business, the first thing is to start with your friends and family; let them patronise you – word-of-mouth is the most effective. On the other hand, if you are a big business, you need to run web adverts; Google and Facebook run advertisements on their sites and they are the two most visited sites in Nigeria. So, if you pay for adverts, they will take your brand and your site to the Internet community; Nigeria currently has 42.3 million active Internet users. Also, Facebook and Google only charge you for adverts only if people click on the adverts. So, if people don’t go to your site, they will not charge you. In addition, the advert rates are very affordable.

Affordability

Getting started in e-commerce is affordable. If you are doing an information website, you can get one for N20, 000. But if you are going to do one that involves transactions and all that it will cost you in hundreds of thousands, but rarely up to a million naira.

Safety of online transactions

E-commerce or online transactions are safe. However, buyers are advised to look at the sites, their reputation or track record and if their websites are secure – because some of them collect private information from you. Now, they are certificates you have to look out for on Internet sites; what we call the SSL certification. Some companies offer such certification on their sites to make it hacker proof or to prevent it from being accessed unauthorised.  So, if you check the website – usually at the bottom – you will see the seal, which says certified by this or that company. Things like people sending you spam mails asking for your pin and all that are likely to happen, but this are general things that are not peculiar to e-commerce.

For the seller it is safe because you don’t get to have theft from people on the desk and you can monitor money that comes in and what goes out. So, it is safe in every aspect.

Overcoming challenges

Problems of e-commerce include gaining the trust of the Internet community because a lot of people are still sceptical about the how genuine Internet businesses are. A way of breaking that barrier is to ensure that you are sincere; don’t advertise things you cannot deliver – stick to the things you can deliver. If you offer ‘next-day’ delivery, make sure you make the delivery as stated. That way, you can overcome the trust barrier.

Another challenge is finance, in the sense that you need capital, and the banks may not be willing to give you loans. So getting the funds to start can be a challenge. So most times you start with family and friends who believe that e-commerce is the new hope for business in Nigeria.

When it comes to distribution, the quality of your idea in the first place; you have to makes sure the idea is profitable. For example, we deliver computers and phones; the profit margin of selling a computer will be more than a book. So many times we can deliver computers and still make profit. But for people that offer items that cost less, the advice is to make your clients pay for delivery. If they trust you they will pay anyway. So if delivery is N1, 000, indicate that on your website. So, you can beat the challenge of delivery by indicating a delivery fee.

Regulatory policies

E-commerce in Nigeria is regulated. There are agencies such as the Consumer Protection Council that monitor such businesses. However, because going as a scam is very difficult for online businesses, you don’t get into problems with the regulatory agencies. The most important thing is tax. The government is serious about tax, so ensure you pay your tax. As with every company, you are registered with the Federal Internal Revenue Service, and as with other companies you have to pay tax. In fact, the banks won’t open an account for you if you are not registered with the FIRS. So as with any company, if you want to build a website, you should have a parent company that is registered with the Corporate Affairs Commission. There is also the cash-less policy of the Central Bank of Nigeria, so it is advisable that you make your business independent of cash. So, if you are opening a business where people can buy things you have to register with Interswitch or a payment provider to give you a platform where people can offer payment using their debit card.

Source: Punchng.com