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If you’re considering a foray into retail, you need to know what you’ll be up against. From intense competition to economic instability, pricing issues and a paucity of skilled labour, there’s a lot that could militate against your achieving sustained growth. In this article, we talk about the most common of those problems and present solutions that you should explore.
Lack of Access to Finance
Sometimes, businesses need loans to finance their day-to-day operations and growth objectives. Unfortunately, banks and other traditional financial institutions often deny loan requests from small businesses or attach prohibitive conditions when they are approved. Retailers trapped in this situation can turn to loan apps and other new-generation lenders for help, as their conditions are typically not as restrictive. Explore more funding options in our article, 10 Financing Options for Your Business.Inflation, Unstable Costs and Pricing Issues
For years, Nigeria has endured rampant inflation. Costs are almost always climbing faster than most businesses can keep track. As a result, setting prices without doing damage to either yourself or your customers’ patronage of your business may be a challenge. Combating this issue will require that you regularly review your prices and adjust pricing your strategies. You could also sell products with a higher demand while scaling down your inventory of less popular goods. Find out practical tips in our articles, How to Raise Prices Without Losing Customers, and 4 Pricing Strategies to Help Your Business Survive Inflation.Inadequate and Erratic Power Supply
Poor power supply remains the bane of many businesses in Nigeria. Without adequate power, storage is limited and expensive. This leads to high running costs and losses due to spoilage. This is in fact one of the biggest challenges of retail business in Nigeria. If you’re faced with this, we recommend that you get alternative power as a backup—preferably solar. The initial investment for it might be a bit expensive, but it’ll save you a good deal of money in the long run. Meanwhile, here’s How to Cut Energy Costs in the Workplace.Sign up for the Connect Nigeria daily newsletter
Security Risks
Businesses in Nigeria are often exposed to potential security risks. Whether it’s physical theft or cybercriminals hacking payment systems, the dangers they face are real and ever-present. To reduce the chances of these risks materializing, your retail business should put physical and digital security measures in place. The former includes CCTV and secure storage; the latter consists of data and systems encryption. You will also do well to train your staff to be more security conscious and spot dangers early on. Here are 10 Must Know Cybersecurity Tips for Individuals and Businesses.Surging Cost of Importation
Exchange rate volatility is negatively impacting many retailers who source a large portion of their goods from foreign markets. This situation is exacerbated by import duties imposed on these products, which raise their final prices and eat into sellers’ profits. An obvious solution is to switch to local vendors, where they may be found. You could also seek improved terms with your international suppliers, and try to reduce overall costs by purchasing goods in larger bulks. One way to do this is to team up with similar businesses so that you’re able to order larger shipments for less. Learn even more tips in this article: How to Find the Right Vendors for Your Business.Underdeveloped Transportation Networks
Poor road networks are a major impediment to the distribution of goods across Nigeria. They cause products to get held up in transit, delaying deliveries to stores and customers. That’s a big drag on retail businesses. You can scale this obstacle by working with tested and trusted logistic partners. The better ones can find ways to beat deadlines even when the transport systems are unpredictable.Register to attend the CN Business Mixer
Final Words
Anyone intending to succeed as a retailer must understand the terrain they’re getting into. The opportunities in the space are numerous, but so are the potential rough spots. We have provided you with a roundup of the challenges of retail business in Nigeria. Hopefully, you’ll learn things from this piece to set you up to excel at retailing.Got a suggestion? Contact us: editor@connectnigeria.com
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