Source - http://www.realmoneyng.com/the-dangers-of-selling-on-konga-and-jumia-marketplace-risks/
Selling on Konga or Jumia is VERY easy. All you need to do is find a product with good demand, list it on Konga or Jumia, and it will eventually sell because their audience and reach are VERY vast.
Becoming a seller on Konga and Jumia is VERY simple and with simplicity comes low barriers of entry which is very bad for any business. There are ton of competition because Konga & Jumia are getting flooded with bunch of me too sellers.
So what are the dangers of selling on Konga and Jumia, if it is very easy to sign up as merchant on the platform and start selling to millions of customers daily?
1. DELAY PAYMENT – They are actually working on improving their payment system but nothing is as good as collecting your money immediately after sales. Jumia pay merchants for successful delivery on a weekly basis depending on your payment day of the week sha whereas Konga credit your wallet after successful delivery and the expiration of your return policy. God save you, you use 30 days return policy.
2. Your product becomes Commodity – Every business must have a unique selling proposition but the moment you register as merchant to sell on any marketplace you will lose your USP. Your product becomes a commodity, every Jack and Jill can also register on the same platform to sell the same products at a cheaper rate. The challenge is, Nigerians are usually price conscious. They will abandon your store for another store with cheaper price for the same product.
3. Competition – Other sellers will copy you in selling the same product. If you happen to be selling a fast-moving products the chance of the platform selling the same products is high. We all want to make money, so if you are using my platform to sell a product and you are making good money, what stop the platform owner from selling the same product. Remember, they are also into the business of buying and selling. We all want to make money and good profit. Just be READY.
4. Pricing War – Marketplace is a battleground. Everyone want to win. Everyone want to sell and make money, so all sellers start a rat race of winning the customers with the cheapest price per product. Some sellers start selling counterfeit or fake product on the platform to beat their competitors in the marketplace to the price game. Buyers ignorantly head towards the cheapest price because they believe they are getting the best deal for the same product.
5. Product Title, Image & Description – Whether you like it or not other sellers will hijack your product listing to sell their products. They will ripped off your product photos and descriptions to list their product on the same platform. To make situation worse, they will be selling at a cheaper rate. So whatever you do, just be ready.
6. Fees & Commissions – The house always wins. The marketplace will always have superior hand over other sellers on the platform if you sell identical products because they will charge you commissions for using the platform. The marketplace (Konga & Jumia) are also in the business of buying and selling products like every other sellers on the platform. Competing with the marketplace owner for the same product on the same platform owned by them will lead you to bankruptcy.
7. Customers – People that buy from your store in the marketplace are not your customers, they belong to the marketplace. The marketplace have their details and can market other products on the platform to them anytime, anyway, anywhere and any day. The marketplace is only lending you their customers to transact business with.
8. Return Products – No seller love to have customers return what they purchase but it happens for several reasons. The customers might change his/her mind because of delay in delivery or for whatever reasons best known to the customer. The dangers of having return products on Konga is that it will affect your store visibilities on the platform whereas on Jumia return products takes FOREVER. You need to fast and pray before you get your return products on Jumia. Make sure you have enough products before you start selling on Jumia or else you are heading out of business.
9. Store Suspension – One of the major risk of selling on Konga or Jumia is that they can delist, suspense or delete your storefront anytime on their platform. If your business depend on the platform 100 percent what happen to your business when they delist or suspense your store.
Moral of the story & Conclusion
Never depend on Konga, Jumia, DealDey, Kaymu, SMEMarketHub or any other marketplace in Nigeria as your primary stream of revenue because your ecommerce business can literally disappear overnight. These companies can close your store on their platform for any reason, including but not limited to complaints of any kind, order cancellation, policy violations that may not be valid or eliminating you as a competitor to make higher profits.
Well, don’t panic yet, starting your ecommerce business there (marketplace) is a good idea because you need to build your brand and your potential customers already trust established brands like Jumia and Konga, so leveraging marketplace platform and brand in building your customer base and online store is a good idea.
You can only get good returns on your investment when you own the platform instead of borrowing it. Owning the platform allows you control your customer unboxing experience.
Selling on Konga or Jumia is VERY easy. All you need to do is find a product with good demand, list it on Konga or Jumia, and it will eventually sell because their audience and reach are VERY vast.
Becoming a seller on Konga and Jumia is VERY simple and with simplicity comes low barriers of entry which is very bad for any business. There are ton of competition because Konga & Jumia are getting flooded with bunch of me too sellers.
So what are the dangers of selling on Konga and Jumia, if it is very easy to sign up as merchant on the platform and start selling to millions of customers daily?
1. DELAY PAYMENT – They are actually working on improving their payment system but nothing is as good as collecting your money immediately after sales. Jumia pay merchants for successful delivery on a weekly basis depending on your payment day of the week sha whereas Konga credit your wallet after successful delivery and the expiration of your return policy. God save you, you use 30 days return policy.
2. Your product becomes Commodity – Every business must have a unique selling proposition but the moment you register as merchant to sell on any marketplace you will lose your USP. Your product becomes a commodity, every Jack and Jill can also register on the same platform to sell the same products at a cheaper rate. The challenge is, Nigerians are usually price conscious. They will abandon your store for another store with cheaper price for the same product.
3. Competition – Other sellers will copy you in selling the same product. If you happen to be selling a fast-moving products the chance of the platform selling the same products is high. We all want to make money, so if you are using my platform to sell a product and you are making good money, what stop the platform owner from selling the same product. Remember, they are also into the business of buying and selling. We all want to make money and good profit. Just be READY.
4. Pricing War – Marketplace is a battleground. Everyone want to win. Everyone want to sell and make money, so all sellers start a rat race of winning the customers with the cheapest price per product. Some sellers start selling counterfeit or fake product on the platform to beat their competitors in the marketplace to the price game. Buyers ignorantly head towards the cheapest price because they believe they are getting the best deal for the same product.
5. Product Title, Image & Description – Whether you like it or not other sellers will hijack your product listing to sell their products. They will ripped off your product photos and descriptions to list their product on the same platform. To make situation worse, they will be selling at a cheaper rate. So whatever you do, just be ready.
6. Fees & Commissions – The house always wins. The marketplace will always have superior hand over other sellers on the platform if you sell identical products because they will charge you commissions for using the platform. The marketplace (Konga & Jumia) are also in the business of buying and selling products like every other sellers on the platform. Competing with the marketplace owner for the same product on the same platform owned by them will lead you to bankruptcy.
7. Customers – People that buy from your store in the marketplace are not your customers, they belong to the marketplace. The marketplace have their details and can market other products on the platform to them anytime, anyway, anywhere and any day. The marketplace is only lending you their customers to transact business with.
8. Return Products – No seller love to have customers return what they purchase but it happens for several reasons. The customers might change his/her mind because of delay in delivery or for whatever reasons best known to the customer. The dangers of having return products on Konga is that it will affect your store visibilities on the platform whereas on Jumia return products takes FOREVER. You need to fast and pray before you get your return products on Jumia. Make sure you have enough products before you start selling on Jumia or else you are heading out of business.
9. Store Suspension – One of the major risk of selling on Konga or Jumia is that they can delist, suspense or delete your storefront anytime on their platform. If your business depend on the platform 100 percent what happen to your business when they delist or suspense your store.
Moral of the story & Conclusion
Never depend on Konga, Jumia, DealDey, Kaymu, SMEMarketHub or any other marketplace in Nigeria as your primary stream of revenue because your ecommerce business can literally disappear overnight. These companies can close your store on their platform for any reason, including but not limited to complaints of any kind, order cancellation, policy violations that may not be valid or eliminating you as a competitor to make higher profits.
Well, don’t panic yet, starting your ecommerce business there (marketplace) is a good idea because you need to build your brand and your potential customers already trust established brands like Jumia and Konga, so leveraging marketplace platform and brand in building your customer base and online store is a good idea.
You can only get good returns on your investment when you own the platform instead of borrowing it. Owning the platform allows you control your customer unboxing experience.
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