The term e-Commerce basically means; business done over the internet. Could be buying, could be selling or a combination of both; could be a product, could be a service or a combination of both.
It’s anything that involves using the internet or web as a business medium. In other words, e-Commerce refers to internet-based companies.
This model of business was popularized by American entrepreneurs between 1997–2001 when several e-commerce businesses were being launched; this era was popularly tagged the “DOT-com boom”.
All forms of companies sprang up with e-commerce ideas; anything and everything that was done in the real world suddenly had their online versions.
History Always Repeats Itself
Fast forward to today, 12 years later, Africa is on the e-Commerce spotlight. Suddenly, the whole world is focusing on Africa and her teeming population as the next potential market for e-Commerce. Foreign investors and venture developers are flooding the continent launching the clones [imitations] of successful e-Commerce sites in America.
And because my country Nigeria is one of Africa’s most populated nations, it has suddenly become the ideal market for several e-Commerce startups like; Kaymu, Jumia, Hellofood, DealDey, Konga, EasyAppetite, SunGlasses, Vconnect, and many others. It’s now obvious we are experiencing our own DOT-com boom in Nigeria!
Being a typical entrepreneur, I couldn’t help but spot these opportunities and in this post, I would like to share one with you; how you can own a shop online FREE and start an online retail business. Don’t know about you, but I see money to be made; I see a huge business opportunity; I see a new generation of entrepreneurs –the internet entrepreneurs who would take hold of this huge opportunity and translate it into a thriving business venture.
With this growing trend comes a huge business opportunity that only a handful of Nigerians are taking advantage of. Just think about it again; over 60 million Nigerians are online and counting. These are people with problems, needs, wants, aspirations and most importantly buying power!
How To Startup Your e-Commerce Business
The traditional cost of developing an e-Commerce site is so large that most small businesses are unable to afford one. And then follows the cost of successfully marketing the existence of such site, which is also quite expensive. So what’s your best option?
Own a shop online!
There are a couple of e-Commerce sites that now serve as online marketplaces where buying and selling is done between individual buyers and sellers or corporate buyers and sellers. The popular ones are what is known as classified sites, popularized by craigslist.
Other popular examples are Alibaba, DHgate and many others. These online marketplaces are designed to showcase your goods like you would normally do in a physical store. They have huge marketing budgets that allows them reach as many people both online and offline.
A typical example and the pioneer of such online marketplaces is eBay –the world’s largest online marketplace. The success story of several eBay merchants/sellers who turned millionaires as a result of trading on the eBay platform is enough proof that owning a shop online works. eBay has its branches in so many countries worldwide, but not yet in Nigeria.
Fortunately, there is an eBay clone now in Nigeria and it’s currently the largest online marketplace for buying and selling the smart way –it’s called Kaymu. The parent company; Rocket Internet is known worldwide as the leading e-Commerce incubators and have successfully started over 100 clones of successful internet-based ventures worldwide. As a matter of fact, the eBay clone they started in Germany did so well that eBay couldn’t help but buy it over!
I have previously written about two of their e-Commerce startups in Nigeria, Jumia and Hellofood. Being an entrepreneur and serving a community of unusual entrepreneurs, none of the previous two offers a solid business opportunity like this one.
To show you how big Kaymu is, even Jumia has a shop on Kaymu. Recognizing this business opportunity, I decided to give it a shot last two weeks and opened up the online version of my boutique business on Kaymu. Guess what? I sold 3 shoes within the first week I listed them on Kaymu auctions!
Here’s How Kaymu Works For Sellers/Merchants
- A seller lists an item [new or old] on Kaymu for FREE, almost anything from smart phones to laptop accessories, books to rare coins, etc.
- The seller chooses to accept only bids for the item [an auction-type listing] or to offer the “Fixed price” option, which allows buyers to purchase the item right away at a fixed price.
- In an online auction, the bidding opens at a price the seller specifies and remains on Kaymu for a certain number of days. Buyers then place bids on the item. When the listing ends, the buyer with the highest bid wins and gets the item.
- In a “Fixed price” listing, the first buyer willing to pay the seller’s price gets the item.
- Arrange with the buyer a suitable delivery option such as; shipping, physical pickup or payment on delivery = sales!
Here’s How To Own A Shop Online FREE Using Kaymu
There are 2 options you can start from depending on your preference.
First, if you are a retailer who already buys and sells offline through a physical shop, Kaymu is simply your online shop to showcase what you are selling already offline. If you fall into this category, Click here to sign up for a FREE online shop
That’s what I did with my boutique business since I already own a physical store where I sell unisex clothing for male, female and kids.
Second, if you don’t own a shop offline and would like to take advantage of this opportunity by selling other people’s goods online through the Kaymu platform, follow the steps below.
- Click here to sign up for a FREE online shop
- Decide any product [new or fairly used] of your choice that you would like to sell on your online shop
- Look for a company [manufacturer], store or seller around you who would like to increase their sales [trust me, everyone does]
- Introduce yourself as an internet marketer who can help them sell more via the internet through your online shop
- Negotiate a discount on the product[s] so that you can make a profit selling them on your online shop
- Take clear pictures of the product[s] with a phone or camera to display on your online shop
- Head over to your online shop and list the product[s], the pictures and their prices so potential buyers can contact you directly via email or phone
- Arrange with the buyer a suitable delivery option such as; shipping, physical pickup or payment on delivery = sales!
Head over to Kaymu and click on the register link to claim your shop online, FREE!
This opportunity is also useful for readers from other parts of the world, thanks to eBay. You can adopt the tips in this unusual article to ebay. And if you are interested in the Nigerian market, shoot me a mail and we can discuss more on how to make this happen!
In this second installment of the Unusual Entrepreneur Interviews for 2013, I have with me today, Bassey Daniel the founder of SMEclub –a Multipurpose Co-operative Society.
I met with Bassey Daniel for the first time last year August and we connected immediately because of our shared passion for rebuilding Nigeria through entrepreneurship development. Since then, he’s moved on to become a customer, a friend and above all, a vision partner as we interdependently support one another’s dream!
This is one interview you don’t want to miss, because Bassey Daniel is not only an unusual entrepreneur, his unwavering dedication and determination to the development of entrepreneurship in Africa, not only in Nigeria is inspiring. He’s not just a talker, he’s a doer and for that, I strongly believe you will learn so much from his unusual story. As you will soon see, he has so much to share.
Take it away Bassey!
Interview Questions Part One
ENTREPRENEURSHIP: Awakening the Spirit of business
1. Can you please tell us a little about yourself and your business? What do you do? How do you do it? Why do you do it and who do you do it for?
My name is Bassey Daniel, formerly a banker, now a business and financial consultant. I have several business and social interests, but the one I choose to talk about here is my role as President of SMEclub Multipurpose Co-operative Society. I am driven by a passion to help serious-minded young people actualize their business dreams. I believe that our socio-economic growth lies in promoting the spirit of entrepreneurship and supporting small businesses.
2. How would you describe your entrepreneurial journey into the world of business? Were there any key incidents or life changing events that inspired your decision to become an entrepreneur?
Well, I was a banker for over 15 years. At some point in my career I was asked to manage what was called the “SME Desk”. If you can remember, back in 2001 or so, the Bankers Committee decided to create the Small and Medium Industries Equity Investment Scheme (SMIEIS). Nigerian banks decided to contribute 10% of their net profit every year to a fund for equity investment in SMEs. In my bank I was essentially the investment analyst. My job was to review investment proposals submitted by entrepreneurs and recommend viable ones to the bank’s investment committee. I didn’t see a lot of properly packaged proposals. Even when the business idea itself was brilliant, few people were able to demonstrate that they would be able to translate the idea into a viable business.
One big lesson I took from that experience was that, while most entrepreneurs would mention investment capital as their number one constraint, the biggest challenges are really lack of necessary business information and entrepreneurial/managerial competence. That realization is what gave impetus to start SMEclub, as a community and resource centre to help build entrepreneurial capacity in Africans and provide access to world-class enterprise development tools.
3. When you started out in business, what specific idea, purpose or vision was your key driving force?
The idea behind SMEclub was to create a platform for business people to interact and learn from each other, access good quality business information, access professional services, network and tap into financial and other enterprise development resources.
4. What is your take on the general notion that entrepreneurs should build a business around what they naturally love to do?
I subscribe to it completely. Passion drives excellence and productivity. A time comes in every business growth process when the going gets really tough. At that point it takes passion to weather the storm. I honestly believe that the key reason for the high mortality rate of small businesses is wrong choice of business. There are way too many me-too businesses out there. It also partly explains the prevalence of mediocre approaches to business. An entrepreneur who loves and takes pride in what he does is more likely to pay attention to quality and excellence, rather than just pursue profits. He is also more likely to put up a fight and make sacrifices to save his dream when the going gets tough, rather than simply throw in the towel and move on to some new “great opportunity”.
5. What is your personal life mission as an entrepreneur? That is; what contributions do you want to make with your life or what would you like to be remembered for as an entrepreneur through the businesses you create when you die?
I want to make a positive impact in everything I do – to promote quality, professionalism and excellence. I have invested in small businesses spanning several different sectors and this general principle guides our operations in each one. So, I like to think of myself as someone with a passion for excellence. In terms of the legacy I would like to leave behind, it is associated with the SMEclub. By the time I retire I would like to have built a strong institution with a reputation and track record for helping young people start and grow their businesses, thus creating jobs, building their communities and realizing their business dreams. More than anything else, I would like to be remembered as Founder of SMEclub, an organization that helped many businesses start and grow. I would like to leave behind a long list of highly successful “SMEclub alumni” businesses.
6. What would you describe as the purpose of entrepreneurship? That is; what role do entrepreneurs play in the world?
Like I said earlier, I believe the future of every economy lies in the hands of entrepreneurs. Every major economy in the world today owes its ascendancy and prosperity to the spirit of enterprise. Governments can only do so much. While capitalism has its disadvantages, I believe it is still better than other options because it promotes creativity, innovation and rapid development by encouraging and rewarding free enterprise. The decline of communism is a strong indication of its inefficacy.
Interview Questions Part Two
STRATEGY: The unusual execution of business best practices
7. How do you identify business opportunities and what metrics do you use to measure their viability?
Business ideas simply come from just paying attention to the world around us. Nobody can claim to be a guru on generating business ideas. I make it a point to observe trends, both locally and internationally. When I visit malls overseas, it is not just to shop. I pay attention to how things are being done, what new products are coming into the market, new trends in consumer behavior and think about how they might affect certain business sectors and industries.
To determine the viability of any new business proposition, I ask a few questions;
- Are there enough people in the chosen target market who will be willing and able to buy the product/service at the price required to deliver a profit?
- What does the future hold for this industry, sector, product? Is the market growing, flat, declining?
- Are there diversification opportunities? Can the product be sold to different market segments or is its success tied to the fortunes of a specific sector?
- Is there a committed management with the ability to manage all aspects of the business – technical/production, marketing, administration?
8. Do you have mentors, business coach or external consultants that you work closely with to grow yourself and your business? If yes, to what extent would you describe their impact on your business? If no, are there any particular reasons?
I have a network of friends and professional colleagues I use as sounding boards, but I have never thought of myself as needing a mentor or coach in the real sense of the word. So you could say I have a support ecosystem of contacts who deserve credit for my growth. It is that same form of ecosystem (a network of business professionals and mentors) that SMEclub tries to establish in every community so that every entrepreneur would have fairly easy access to the help they need.
9. How do you strategically use your time as an entrepreneur? What key activities would you recommend entrepreneurs use their time for?
To remain strategic means to constantly have the big picture in mind when making operational decisions. That requires a conscious effort. It requires discipline. It is very easy, particularly in the early stages of business, when the promoter has to do everything, to be so absorbed in the daily grind of the business as to lose sight of the big picture.
I would recommend a number of things:
- Create a vision and mission statement first for yourself, then for your business. Make sure they are heartfelt. That is, don’t borrow a catchy statement from an admired company. Think through what doing this particular business means to you; how it will help actualize your personal goals. Going back to the subject of loving what you do, if your business goals are not consistent with (and support) your personal goals, you are in the wrong business.
- Develop a business plan (a combination of operational and financial plans) for your business and set SMART goals.
- Spend a few hours every week (maybe on weekends) thinking about how your daily activities contribute to your strategic plans – the big picture. Is there anything you are doing which is inconsistent with your strategic goals?
- Make time (i.e. don’t claim to be too busy) to review your business plan every quarter (3 months). Are you meeting the goals you set? If not, why not? Are the goals still realistic? How has your environment changed? How do the changes likely to affect your business? Do you need to change some of your strategies?
Taking time to reflect in this way may make the difference between success and failure.
10. How do you generate profitable customers for your business? What unusual approaches do you adopt for marketing your products/services?
Different strategies work for different business types. It depends on the market segments being targeted. Electronic media such as email, internet, mobile and social networks offer the best returns on investment for certain market segments. For others they do not give much mileage. Traditional media are still relevant and powerful – radio, TV, print, outdoor, etc. We use a combination of several methods to achieve the objective, but because most of our offerings are targeted at middle-aged people and younger; we use more of internet based channels. I don’t know if any of our methods can be called unusual. We probably could use some ideas on unusual media and methods, particularly if they offer improved ROI – we are not interested in being unusual for the fun of it.
11. Many entrepreneurs complain about not succeeding in business due to lack of adequate funding, what is your take on this matter and how do you cope with funding issues in your business?
I agree that it takes money to make money, but business people need to be creative. Sometimes paucity of funds is good in that it forces people to think outside the box. I typically encourage entrepreneurs to think of how they can reframe their requirements. Some useful questions to ask yourself might be:
Do I really need to rent an office or can I operate from home for now?
Do I need a computer, printer, and copier or can I use a business center for now?
Do I need to buy that delivery van immediately or can I hire one for now?
Do I need to stock all those goods or can I just buy a few samples and purchase inventory on demand?
Do I need to pay for that website now or can I start with a Facebook page?
Do I need to finance that contract myself or can I start with clients who are willing to mobilize me?
Do I need to hire permanent staff and start incurring overheads today or can I use freelance talent and pay only when I have an order?
The other point about finance is that most entrepreneurs would never need to borrow if only they could find the discipline to manage their finances prudently. A lot of business funds gets diverted to personal use and is never returned to the business. Most don’t see the need (or lack the discipline) to separate their personal money from business money. I typically encourage business people to open a separate bank account for the business and keep business transactions separate from their personal transactions. Instead of drawing money from the business for personal expenses they should pay themselves a salary. If they need to draw money from the business for personal use they should document it as an IOU and pay back once they can.
12. When starting out a new business, who are the likely possible partners or professional service providers you would recommend every entrepreneur work with?
You may register a business name yourself, but if you want a limited liability company, you need a lawyer to guide you through the incorporation process. Make sure you have the technical ability to produce the goods and/or provide the services you are offering the market. Make sure you have competences for marketing and book keeping. If you are not good with these aspects of the business (nobody really can do every single one of these things well by himself), find partners who can, employ staff who can or outsource to third parties.
It is typical for small business owners to want to do everything themselves as they try to minimize their costs. That makes sense, but bear in mind that certain duties require professional training to perform. Trying to bite more than you can chew is being penny wise, pound foolish. At the very minimum try to have a team of professionals at your disposal including a lawyer, an accountant and a marketing expert. They may be paid professionals or friends willing to do you a good turn – whatever works for you.
13. The pricing of products/services is always an issue for entrepreneurs, what unusual approach do you take when it comes to pricing?
Your pricing strategy really depends on the competitive dynamics of your industry. If you are selling a commodity like garri or rice you really have no choice but to stay within the market’s pricing range because there is little you can do to add discernable value to the product that would justify premium pricing. Outside of commodity markets there are greater opportunities to add value in any or a combination of the “4 Ps of marketing” to justify a premium price.
As a general principle I would say:
- Make sure you are targeting the right market for your product. Don’t try to sell Mercedes Benz cars to people who are looking for Keke NAPEPs.
- Make sure your pricing is competitive. Identify competitors who are offering similar value propositions to your market and make sure your pricing is relatively within a reasonable range.
- Consider your costs. This doesn’t necessarily mean adopting a “cost plus” approach. Pricing decisions are typically more market-driven than cost-driven. If you find that charging the market price for similar offerings will leave you operating at a loss, it is an indication that your business model may be wrong, or there is something about the competition you don’t know.
Interview Questions Part Three
MISCELLANEOUS: Resourceful Recommendations, tools, books, and ideas for entrepreneurs
14. Since you became an entrepreneur – someone who solves problems for people profitably; what has been your most outstanding accomplishments in the context of business?
I would say that setting up SMEclub is the achievement I am most proud of, not because it has attained its potential, but because it is probably the most significant selfless endeavor I have undertaken.
15. What would you describe as your major setbacks and what lessons did you pick from them?
I have had many setbacks as an entrepreneur. I don’t know if I can measure them in terms of significance, but one recurrent lesson is that change happens. No matter how well developed your plan might be, always prepare for change. Always think about a plan B. That way, you will not be completely caught napping when change happens.
16. Where there any particular questions you expected me to ask that is beneficial to entrepreneurs and I didn’t? Kindly share with us such questions and their relevant answers here.
I think the questions have been pretty comprehensive, but I wanted to seize this opportunity to invite your readers to checkout www.smeclub.net. We are building a great community and resource centre for entrepreneurs, which they will want to be part of and benefit from.
I’m so convinced you had more than you asked for in this interview. But just in case, he missed out something, what more would you like to know about the unusual Bassey Daniel?
You can ask him further questions below in the comment section and I will be sure that you will get an answer directly from him.
Also, what did you learn from this unusual entrepreneur? What lessons, what philosophy of his strike you the most?
Bassey has shared his unusual story with you, now is time to hear from you. Can’t wait to hear what you have to say!
In my work with entrepreneurs, especially small business owners in my country Nigeria, one re-occurring theme is their approach towards marketing. Each time I’m in a consulting or strategy session with a client and I ask the question; “how do you get clients?”
I hear almost the same answer; “through referrals”. So out of curiosity, I ask a second question; “you mean from satisfied customers?” And then I get a surprising answer; “not really, from my family and friends who know about my business.”
Every time I get these responses, I no longer wonder why they are complaining about low or no sales. I no longer wonder why their business is not growing as fast as they wish it to.
You cannot expect to grow your business, especially in terms of revenue/sales if you simply expect your family and friends to do the marketing for you. As a matter of fact, you are not yet in business until you make a sale from a total stranger!
Two Kinds Of Word-Of-Mouth Marketing
This is a passive mindset towards marketing, popularly known as “man-know-man” marketing. It basically means a form of marketing based on networking or existing relationships or one’s circle of friends or connections. The underlying philosophy is this; sales are determined by the caliber of people in your network or the caliber of people you know.
Every time you depend on your connection, network or existing relationship with someone you know to make the sale, then you are not yet fully in business. The people within your existing network and the people they know are too small a target market to sustain your business. Are your family and friends and their friends of friends the only potential customers out there?
This kind of Word-Of-Mouth Marketing revolves around one idea; testimonials. What are testimonials? Testimonials are personal recommendations or favourable comments from customers who have bought your products/services and were satisfied enough to spread the word to their network. This is the essence of word-of-mouth marketing; testimonials.
To grow your business, you need a sustainable marketing strategy that will allow you to make sales from outside your network. Why? Because until you do, the real power of referral marketing will never be at work for you!
Word-Of-Mouth Marketing Defined
As you must have been told, this is perhaps the best form of marketing, right? When without much personal efforts on your own part, the news about your business, products or services just seem to spread and eventually leads to more sales, right?
There is a big difference between referrals coming from customers than those coming from your network. Sales made through referrals from satisfied customers carry more credibility because it comes from a third party; people who know, like and trust your brand. While sales made through your existing relationships carry less credibility because it comes from a second party; people who know, like and trust you.
The level of interest a customer has in your business comes from their personal experience with your products/services and that carries more weight in the eyes of a potential buyer than your relational ties. When customers buy from you and enjoy a favourable experience as a result of using your products/services, the value of your brand increases.
To a large extent, they aren’t personally interested in you as much as they are interested in your brand –products/services you offer and their benefits. It is this positive experience that they talk about to their own family and friends or existing networks that compels these people to buy from you too. They are buying with an expectation in mind; to enjoy the same favourable experience as their friend or family member did.
Let me share my experience.
During the profitable days of cyber café business in Nigeria, we were able to grow our business primarily through word-of-mouth marketing. Satisfied customers simply invited their friends to come check us out and they in turn invited their friends. In the end, our customer base grew from 0 – 1700 registered browsers as a result of word-of-mouth marketing.
Out of these people, less than 10% of them did we personally know or had any previous relationship with. They were complete strangers who heard about the cyber café from their network of friends and not our own network of friends.
As a result, the power of third party endorsement was at work. They came with certain expectations based on their friends’ testimonials and those expectations were met because we had systems in place to ensure the same brand experience for every customer.
How To Create Active And NOT Passive Referrals
The right and most effective approach to creating a sustainable word-of-mouth marketing system is through testimonials. Use the following 5 questions below to gather testimonials from your satisfied customers as recommended by small business marketing guru, John Jantsch.
Why did you hire us/buy from us in the first place? (Here you are looking for clues to what helped them decide to buy, what build trust, what resonated in your marketing and sales processes.)
What’s one thing we do that you love the most? (Stick to one thing and help them get as specific as possible)
What’s one thing we do that others don’t? (Again one thing – this may sound a lot like the second question, but what you are really trying to do here is get some industry comparison going – you might get some stories of how others have failed them in the past and there offer some interesting opportunities.)
If you were to refer us what would you say? (This is your chance to have them describe what you do best as though they were telling a friend. This point of view can be very powerful and this answer might actually turn into a testimonial. In many cases that’s precisely what I’ve done with answers to this question.)
Can you tell me about three other companies that you love? (This question does a couple of things. It allows you to better understand what they think best of class looks like and why and it helps you build a list of potential strategic partners. Think about it, your shared client thinks you both rock!)
How has word-of-mouth marketing benefitted your business?
Who are the majority of referrals you have; active or passive?
What particular actions or steps did you take to implement a sustainable word-of-mouth marketing system for your business?
Share your comments below, can’t wait to hear from you!
The story of college dropouts who later turned out to be multi-billionaires as a result of the great businesses they built is a popular success story. The likes of Bill Gates of Microsoft, Steve Jobs of Apple, Richard Branson of Virgin and Mark Zuckerberg of facebook to name a few. Here is a list of 55 School Drop Out Billionaires and Successful Entrepreneurs.
At the other end of the spectrum are entrepreneurs who didn’t necessarily drop out of school, but began their entrepreneurial journey while in school. Here’s a list of 10 Successful Entrepreneurs Who Started Businesses in College. This is the category I belong; building my business while I was still schooling.
Both categories of entrepreneurs are living proofs of one fact; there are potential entrepreneurs on campuses. It is no longer smart to wait for them to finish schooling before planting in them the seed of entrepreneurship. As they say; “catch them young”.
This is particularly important especially in my country Nigeria where there’s a growing rate of unemployment. Every year several thousand youths graduate from these higher institutions with no hope of employment.
Recognizing this growing problem is what inspired the publishers of “Paddy Gbam” magazine to create this platform to raise and empower entrepreneurs on Nigerian campuses. I am part of the organizing team and have been selected to lead the talk on entrepreneurship development on campuses.
We will be kicking off the tour this Thursday, 7th Feb., 2013 at the Federal University of Technology Akure [FUTA]. We have 8 universities and colleges already scheduled for the month of February alone and this is just season one!
CampusPreneur Tour 2013 – The Schedule
The Tour will also feature other entrepreneurs like Rita Oloko, a make up professional and Segun Jiwande, a fashion designer. Orisha Femi a popular Nigerian musician will also be performing alongside budding artiste such as; Rizz, Lace, Testimony and D-whyne. This tour is proudly supported by; naijapreneur, soundcity, Nigezie, Primetime Africa, Dynamix, Acada, The Guardian, Nigerian Tribune, and Punch Newspaper and others.
Below is the timetable for the CampusPreneur Tour 2013;
@FUTA – 07/02/2013
Francis Thedibire Auditorium
@UI (IBADAN) -21/02/2013
@AAUA – 26/02/2013
Olusegun Obasanjo Auditorium
Stay tuned as we will keep updating the venue for other schools!
There are a few things you can do to support this initiative;
- One, like our facebook page and help spread the word among your friends.
- Two, if you are living around any of the 8 schools listed above, make it a date and join us at the designated venue.
- Share this post using any of the floating icons by the left hand side of the site on twitter, facebook, linkedin and google+.
Thanks for your support; we hope to do many more of such initiatives.