HOW TO START A CONSUMER ELECTRONICS BUSINESS IN NIGERIA
Consumer electronics are either digital or analogue equipment that are used daily in different homes and offices for entertainment, communication and other activities. The growing population of those migrating to urban areas in Nigeria leads to the high demand of electronics by consumers. Various consumer electronics equipment includes
- Audio systems or home audio
- Flat screen TVs
- DVD players
- Video games
- Telephones
- Laptops
- Air conditioners
- Laundry machines
- Desktop computers
- Printers and scanners
- GPS
- Digital cameras
- Electronic musical instruments
- Cam coders
- Wireless devices such as Bluetooth headphones
Different popular electronic brands includes:
- LG
- Panasonic
- Samsung
- Sony
- Sharp
- Akira
- Haier Thermocool
- Binatone
Consumer electronics have become part of our everyday life as people hardly do without them. Both the rich and poor patronize and have electronics in their various homes. The consumer electronics business involves buying electronic appliances (or gadgets) from a manufacturer, wholesaler, agent, importer or other retailer and selling it to consumers for their personal use
In order to start a consumer electronics business in Nigeria, there are certain steps, planning and preparation that one must take in order for the business to be successful. The procedures include:
- Choose a Niche
Electronic business includes a lot of varieties and it is wide. Before starting a consumer electronic business, one must choose an area that is suitable according to your interest in the electronics business. There are several kinds of consumer electronics services that one can offer, they include selling:
- TVs, speakers and home theatres
- Fridges
- Personal computers and laptops
- Cookers
- Washing machines
- Electronic musical instruments
You could decide to sell a particular type of electronics or open a multi-purpose store that will accommodate different electronics
- Draft a business plan
Having a business plan is very crucial before starting any business as it makes you understand the cost that will be borne in setting up the business, financial projections, competitors and other relevant information that will ensure that your business thrive in a competitive environment. A well detailed business plan will consider the following
- Executive summary (This will be done after the plan is written)
- Business Overview
- Market Overview: The Opportunity & Solution
- Competition
- Financial Highlights
- Our Ask
- The company overview
This is the introduction and description of your company. It covers the following details
- Mission and vision
- Overview of company history/capabilities
- Product description and present stage of development
- Competitive advantage (what’s different or better than competition)
- Past customers and performance (if applicable)
- Legal entity, hours of operation, location description and attributes
- Structure & Ownership
- Management Team
- Intellectual property status (if applicable)
- Commercialization strategies (if applicable – timeframe and actions to move from idea to marketplace
- Product and services
This covers the following:
- Definition of Products or Services to be Sold
- Product Viability
- Technology
- Industry analysis, market analysis and marketing strategy
- Swot analysis
- Market analysis
- Market size(Estimate of the total market size for the product or service and trends
- Quantification of the size of each market segment in terms of (Naira spent, units used, number of people, percent of income etc.)
- Competition to the business
- Market Segmentation and Demographics
- Customer Profile(Actual and potential purchasers of product or services by market segments)
- Barriers to Entry
- Marketing/sales plan
- Management and operations
- Summary of risks involved
- Professional and advisors
- Financials
- Cash flow projection and/or existing (3 years) with breakeven analysis
- Income/Expense projection and/or existing (3 years with ratios and benchmarks to industry)
- Sources and uses of funds (funds needed, owner equity, how funds will be used/start-up cost analysis
- Funding
- Amount of Money Sought
- Use of Proceeds
- Project implementation schedule if any
- Register your business name
Registering your business name is very important for your consumer electronics business. This is because your business will be separate from its owners and customers and clients will not patronize your product if they know that it is not registered with the Corporate Affairs Commission (CAC) in Nigeria. Depending on the business structure you want to set up for your business, there are different procedures for each structures
If you are starting as a very small business, you can register as a sole proprietor but if you are starting your business on a large scale, you can register your business as a limited liability company. Registering your business name with CAC will give your customer and clients the backing that your business is legal and your products are not fake
- Take care of the legal requirements
Obtain the necessary legal requirements before starting your business to avoid being penalized. These include licenses and permits from the local or state government and your Tax Identification Number (TIN)
- Competition
There is a stiff competition in the consumer electronics industry in Nigeria. As a new business, you will need to devise strategies and measures that will give you the edge over your competitors. You could decide to offer repairs on goods with guarantees, offer various discounts in order to boost your sales
- Contact the right suppliers
Before starting an electronic business, you will need to have a trusted suppliers whose products are durable. You can either get your supplies from wholesale suppliers of from the electronics company itself. You must ensure that the right choice is made when choosing a supplier because if there are complaints about the goods from your customers, it will affect the business badly
- Consider importing the goods or being a reseller
As a consumer electronics business owner, you can consider importing the electronics yourself from various countries such as China, Japan, Germany, USA, UK or you can register with the major importers of the products as resellers or distributors. There are a lots of major importers of electronics in Nigeria and you can serve as their reseller or distributor if you don’t want to be an importer
Although importing the electronics yourself will require a huge sum and some documentation, but it is worth the stress and money because it increases your gain compared to being a reseller or distributor. You will need to factor in the following elements if you want to be an importer of electronics:
- Importation custom clearance
- Mark-ups
- Volume or the quantity of the electronics you’re importing
- Huge capital outlays
- Strong distribution networks
- Finance your business
Without funds for backing up a business idea, the business will cease to exist. . A budget should be made that will cover all your expenses including office rent, stock purchase, branding and advertising. After drafting the business plan, you will have an estimation of the amount that will be needed for starting up the business. A comprehensive business plan will ensure that you have access to loans from banks and investors. As a business owner you could obtain funding through the following:
- Self-financing: This has to do with the capital provided by the owner of the business
- Grants from government agencies: Various grants can also be gotten from the programs run by the state government or federal government
- Loans from banks: Having a detailed business plan and registering your business name will enable you access various bank loans
- Investors: Investors who have gone through your business plan and are assured that your furniture making business is profitable can invest millions of naira in your business
- Family and friends: Finance can also be gotten from families and friends that are willing to support your business
- Location
Finding a suitable location for your consumer electronics business is very important as it increases the sales of your business. When starting a consumer electronic business, you must consider densely populated areas and a place with enough space for a show room of your products. Having a good location will give you the edge over your competitors
- Consult experts in the business
Before starting a consumer electronics business in Nigeria, one should consult with experts that are in this field because this business requires lots of planning and preparation. These experts are individuals that have variety of knowledge and experience in the consumer electronics business. They include large owners of consumer electronics stores, wholesalers of consumer electronics, sales representatives of various consumer electronics stores other individuals in the value chain of the consumer electronics business
- Consider offering after sales services to your customers
As a business owner of a consumer electronics store, you must consider offering after sales services to your customers after they must have patronized your store. After sale services includes delivering various products to the buyer’s destination, replacement of products and offering guarantees to consumers on the products brought. You will need to purchase a delivery van for your business that will ensure that the purchased goods arrive at their destination. The after sales services will increase the patronage by customers and will also ensure that customers refer your products to others
- Build an inventory
When starting a consumer electronics business, you will need to build up your inventory by acquiring different electronic products from various brands and manufacturers. You can now proceed to showcasing these various products in your showroom for your consumers and clients to see
- Acquire insurance
Dealing with electronics means that any unexpected event can happen to the consumer electronics that you are selling. It could be theft, damage or fire. In order not to make losses, it is advisable for the owner of the business to acquire insurance protection for the business. Some of the insurance services on can acquire for its consumer electronics business includes:
- Electronics store general liability insurance
- Electronics store commercial auto insurance
- Electronics store business property insurance
- Electronics store Cyber liability insurance
- Electronics store Worker’s compensation
- Electronics store Crime insurance
- Hire and select staffs
Starting a consumer electronic business will involve hiring various staffs that are key to the growth of the business. You must invest time in selecting experienced and staffs that will move your business forward. You will need to hire:
- Drivers for the delivery van
- Sales executives and representatives
- Stock managers
- Supervisors
- Promotional heads
- Floor managers
- Security guards
- Receptionist or cashier
- Customer’s relations and other relevant positions for the business.
Personnel can be gotten through
- Posting about the vacancy on your website and across any social media or email marketing channels
- Asking your business network, as well as friends and family if they know anyone suitable
- Adding the vacancy to general recruitment websites
- Advertising the vacancy in industry trade media or local newspapers
- Market and promote your business
When running a consumer electronics business, you must ensure that you employ certain means in order to promote your business and attract customers to patronize your product. These are some of the marketing ideas and strategies that you can adopt for your consumer electronics business
- Direct Marketing
- Sponsor TV and Radio Programs
- Erect your Billboards in Strategic locations around the city
- Making use of sales Agents and sales reps
- Online Marketing
- Referral Marketing
- Ensure that all your employees wear your branded shirts during work hours
- Engage in road show within the community where your consumer electronics business is located
- Sponsor relevant community programs
- Boost your presence and sales by selling on online stores
The modern world comes with lots of technological innovations and consumers can order for different goods and services from their homes. In order to boost your sales and online presence you should open an online store for your business by adopting and selling on various online stores such as Jumia, Konga or OLX stores. The online store will showcase the various specifications and characteristics of a product as well as the price.
- Understand the constant change in technology
What is trending today may be outdated tomorrow as different electronics brands battle it out against each other to produce better electronic products. You must ensure that you don’t stock a huge number of outdated electronic devices in your store as you may find it difficult to sell them
- Consider partnering with organizations
You can partner with various companies and organizations especially IT firms that indulge in immense use of electronics. Various companies will need computers and other hardware related products, you can decide to offer your services to them by pitching an offer that they won’t regret. This will ensure constant cash inflows to the company.
- Launch your business and maintain your reputation
After all the above steps have been taken, the final step to take is to launch the business and maintain a good reputation with customers by delivering excellent services and durable products. You must ensure that your products are affordable, durable and guaranteed in order to boost your business reputation.
CONCLUSION
The electronics business in Nigeria is a booming and profitable business because almost every home uses electronics and newly upgraded electronics are manufactured every day for sales. Starting a consumer electronic business requires knowing the specifics of electronics you want to sell, having the right amount of capital and selling standard electronics to customers will lead to your business to being successful. For more information on how to start a consumer electronics business in Nigeria, you can contact us on 08023200801, 08075765799, Email: info@qeeva.com
About the author
Onamakinde Dare Daniel is a highly motivated accountant with knowledge in Accounting, Taxation, Management, Audit, Costing and Research. He is keen on tax matters due to its ever dynamic nature.
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