In this article on “How to Start Mobile Phone Business in Nigeria” we will reveal the secret to succeed in this industry as a seller. Whether you are selling brand new phones, UK/US used phones also known as second hand or fairly used phones, this article is for you.
According to TRUSTONIC, Nigeria leads the pack among African nations in terms of smartphone usage.
Not only does Nigeria hold the top spot for smartphone usage in Africa, but it also ranks as the foremost country on the continent for the adoption of all types of mobile phones, encompassing both smartphones and non-smartphones.
Obviously, with a population of 200 million, what do we expect?
These facts make the mobile phone industry a booming industry in Nigeria and can accommodate as much as anyone who chooses to venture into the cell phone business.
Here is how you can start a mobile phone business in Nigeria as a retailer or wholesaler:
Table of Contents
1. Determine Your Phone Brand:
The mobile phone industry is full of various kinds of phone brands for you to venture into, but not the less, only a few are popular among Nigerian phone users.
By popular I mean; “Are of high demand”.
Examples of top phone brands that are very demanding and easy to sell in the Nigeria market as a phone dealer are:
- Samsung: Samsung has a strong presence in Nigeria and offers a wide range of smartphones with various price points. Their Galaxy series, especially mid-range models like the Samsung Galaxy A and M series, are well-received.
- Apple (iPhone): iPhones have a dedicated fan base in Nigeria, particularly among those who prefer premium devices. The iPhone 12 series and newer models tend to sell well.
- Tecno: Tecno Mobile is a Nigerian brand known for its budget-friendly smartphones with good camera features. Models like the Tecno Camon series are quite popular.
- Infinix: Another Nigerian brand, Infinix, offers affordable smartphones with decent specifications. The Infinix Hot and Note series are favored by many Nigerian consumers.
- Xiaomi: Xiaomi has gained popularity in Nigeria for offering high-quality smartphones at competitive prices. Models like the Redmi Note series have garnered a significant following.
- Nokia: Nokia’s reputation for durable and reliable phones makes it a trusted choice for many Nigerians. Nokia smartphones running on Android OS are well-received.
- Oppo: Oppo offers stylish and camera-centric phones that appeal to consumers interested in photography. The Oppo F and Reno series are examples of popular models.
- OnePlus: OnePlus devices are known for their performance and software experience. The OnePlus Nord and OnePlus 9 series have gained traction in the Nigerian market.
- Huawei: Huawei has a presence in Nigeria with smartphones like the Huawei Y and P series. They are known for their good battery life and photography capabilities.
- Vivo: Vivo smartphones are gaining popularity in Nigeria due to their innovative features, such as high-quality selfie cameras and fast charging capabilities.
Those are the top 10 mobile phone brands currently leading in sales in Nigeria.
However, it’s important to note that the mobile phone industry is highly influenced by market trends.
For instance, the iPhone 14, which is currently gaining popularity and is priced at over a million Naira each, may experience a drop in demand if the iPhone company decides to launch an iPhone 15 model.
This forces sellers to lower their prices for the iPhone 14 to ensure quicker sales before the introduction of the iPhone 15.
Such price reductions could slim the profit of the seller or could even potentially result in losses for the sellers due to the arrival of the new iPhone 15 model.
It’s not just iPhone products; other phone brands and products are also influenced by the ever-changing and volatile nature of market trends.
So it is important to stay updated with the latest phone releases and trends as that will help you make informed decisions as a phone dealer.
2. Determine the Category of Phone Usage:
There are three categories of mobile phone usage all cell phone sellers must be aware and knowledgeable about. These categories include:
- New Phones
- Refurbished Phones
- Second Hand or Fairly Used Phones.
New Phones: New phones refer to mobile devices that have never been previously owned or used by any individual. They are brand-new, straight from the manufacturer or authorized retailers, and come in pristine condition.
New phones typically come with warranties and are packaged with all original accessories, including chargers, manuals, and sometimes additional features like screen protectors or cases.
These phones are free from any wear and tear and often include the latest technology and software updates.
Refurbished Phones: Refurbished phones are pre-owned devices that have been returned to the manufacturer, retailer, or a certified refurbishment center for various reasons, such as defects or customer returns.
These phones undergo a rigorous inspection, repair, and testing process to ensure they meet specific quality standards. Once refurbished, they are resold as “certified refurbished” or “renewed” phones.
Refurbished phones are not brand-new but are often sold at a lower price than new phones. They typically come with a limited warranty and may not include all original accessories.
Second Hand or Fairly Used Phones: Second-hand or fairly used phones, often referred to as “used” or “pre-owned” phones, are devices that have been previously owned and used by individuals.
These phones can vary significantly in terms of condition, wear and tear, and age. They may show signs of use, such as scratches, dents, or cosmetic imperfections.
The functionality of second-hand phones can also vary, so buyers should carefully inspect and test these devices before purchasing.
Fairly used phones are usually sold at lower prices than both new and refurbished phones and may or may not come with warranties, depending on the seller which happens to be you.
Even within the secondhand phone market, there is a higher demand for used phones from the UK and the US compared to Nigerian used phones in the Nigerian phone industry.
It all comes down to your available capital. If you have sufficient capital to start a new phone business, that’s great.
However, if your capital is limited, you can begin by dealing in refurbished and secondhand used phones initially. As your business grows, you can gradually incorporate new phones into your product offerings.
3. Source your Mobile phones:
Now that you have decided on your phone brand or brands and the specific phone category you intend to invest in, the next step is to procure your mobile phones for your business.
Here are ways on how you can source and procure your mobile phone inventory for your business.
1. Directly from Manufacturers or Authorized Distributors:
- Contact Manufacturers: Reach out to mobile phone manufacturers like Samsung, Apple, Xiaomi, or Tecno directly. Inquire about becoming an authorized dealer or distributor in Nigeria. This can give you access to the latest models and competitive pricing. The major constraint with this process is capital. As it will require a significant capital before your request will be granted, especially high phone brands like Samsung and iPhone.
- Authorized Distributors: If you can’t work directly with manufacturers due to capital constraints, establish relationships with authorized distributors of popular brands. These distributors often have exclusive rights to distribute the phones in Nigeria and can supply you with genuine products. Examples of mobile phone distributors in Nigeria are: Slot Systems Limited, 3C Hub, Finet, Femtech Information Technology, Microstation, Yudala, SISCOM Nigeria Limited, GSM Village, Obiwezy, and Reef Communications. It is very easy to locate and contact them, because they have outlets (branches) in various parts of Nigeria.
2. Wholesale Markets:
- Computer Village, Lagos: Located in Ikeja, Lagos, Computer Village is one of Nigeria’s largest and most renowned electronics markets. Here, you can find a wide range of mobile phone wholesalers and suppliers. Be prepared to negotiate prices and inspect the quality of the products.
- Alaba International Market, Lagos: Alaba International Market is another popular electronics market in Lagos, offering a variety of mobile phone wholesalers and retailers. It’s a hub for both brand-new and used mobile phones.
3. Online Wholesale Platforms and Online Marketplaces:
- Alibaba: Alibaba is a global online marketplace where you can find mobile phone wholesalers and suppliers. You can connect with international sellers and arrange for bulk purchases.
- Global Sources: This online platform connects buyers with verified suppliers from around the world, including mobile phone manufacturers and wholesalers.
- eBay and Amazon: Consider purchasing mobile phones from reputable sellers on eBay and Amazon which are popular online marketplaces globally. Some sellers offer bulk deals, and you can have the phones shipped to Nigeria.
4. Import from International Markets:
- United States and United Kingdom: Consider importing mobile phones from countries like the United States and the United Kingdom, where you can find a wide selection of new and refurbished devices. Establish contacts with reliable suppliers in these regions.
5. Attend Trade Shows and Expos:
- Mobile Phone Trade Shows: Participating in international or regional mobile phone trade shows can provide opportunities to meet manufacturers, distributors, and suppliers. Events like the Mobile World Congress or local trade exhibitions can be beneficial.
8. Networking and Referrals:
- Networking: Attend industry-related events, join mobile phone business associations, and network with other mobile phone dealers. They may provide valuable insights and referrals to reliable suppliers.
Apart from doing proper research on your suppliers to guarantee product authenticity and quality, you must consider other key factors such as pricing, shipping logistics, and after-sales support to make informed decisions that align with your business goals.
4. Mode of Operation:
What will be your chosen mode of operation for your phone business? Will it be conducted online, at a physical location, or a combination of both?
Whichever mode of operation you decide on for your mobile phone business, success will depend on your ability to fully understand and leverage it.
Let’s say you choose to operate in a physical shop.
Here is what you must look out for to choose the best location for your mobile phone business in Nigeria
- Proximity to Target Market
- High Foot Traffic
- Proximity to Competitors
- Accessibility and Parking Space
- Security and Safety
- Rent and Operating Costs (Utility and taxes)
- Proximity to complementary Businesses (Phone cases and Phone repairers)
If you have all the necessary factors in place, then there’s no need to worry because you are in an ideal location. A perfect location translates to reduced marketing expenses and increased sales.
If you opt to operate your phone business online, you can choose to either create your own e-commerce store or/and sign up on online marketplaces such as Alibaba, Jumia, Konga, Jiji, and similar platforms to sell your mobile phones.
But operating both online and physical locations will give you a great edge in the mobile phone industry as a seller over your competitors.
5. The Legal Side:
The legal side of running a cell phone business in Nigeria includes;
- Business registration and
- Tax Identification Number (TIN)
Registering your business doesn’t only make the government recognize your mobile phone business as a legal entity but also gives your cell phone business some equity of trust in the eyes of customers.
If you plan to run your mobile phone business on a large scale, registering it as a Limited Liability Company (LLC) can provide protection for your personal assets.
It is advisable for large-scale businesses, regardless of the industry, to consider LLC registration from the outset or as the permanent company structure.
When you are done with the registration, you want to obtain your Tax Identification Number (TIN) for payment of taxes to the government.
It is important to acquire your Tax Identification Number (TIN) before commencing operations to prevent potential humiliation and disturbances from tax collectors who visit various shops for tax collection purposes, including the closure of shops for those who have not fulfilled their tax obligations.
Apart from having your shop located in a strategic location, you need to also create awareness and promote your mobile phone business to reach more target markets and more sales.
The common marketing strategies used to market and promote phone businesses in Nigeria are:
- Offline Advertising ( Billboards, flyers, and local newspapers)
- Digital Marketing (Social Media, Search Engine Optimization (SEO), Pay-Per-Click Advertising (PPC), etc.)
- Discounts and Promotions
- Online Marketplaces (Jumia, Konga, JIji, etc.)
- Loyalty Programs for Repeat Customers only
- Partnerships with complementary businesses such as Phone Repairers and Phone Accessories sellers
- Optimized visual appeal of both your Physical and Online Store
- Influencer Marketing
- Customer Service and After-Sales Support
- Customer Reviews and Testimonials
With those marketing strategies in place for your mobile phone business, competitors will find it difficult to survive around your phone business location.
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- How to Register a Business Name in Nigeria in 7 Easy Steps
- How to Start Sales of Mobile Phone Accessories Business in Nigeria
- How to start UK/US used Phone Business in Nigeria with 50k
- How to Start a Phone Repair Business: Your Complete Guide
Success in the mobile phone business in Nigeria as a seller requires careful planning, dedication, and a commitment to delivering quality products and services.
Keep up with industry trends and technology advancements to stay competitive and meet the evolving needs of your customers.
How much does it cost to start a mobile phone business?
Starting a mobile phone business in Nigeria, particularly with brand new phones, can range from 5 million to 10 million Naira. The specific cost is influenced by various factors including your location, the scale of your business, your chosen mode of operation, the category of mobile phones you intend to offer, and your niche within the phone brand market.
On the other hand, selling used phones can be cheaper. You can start a mobile phone business selling used phones for less than 5 million Naira and still generate a substantial profit after each successful sale, especially if you possess excellent negotiation skills.
Is phone business profitable?
Yes, the phone business is profitable. It stands as one of the most profitable businesses that can potentially yield a profit of up to 50,000 Naira per sale. Such a level of profitability is not common across all types of businesses.
This profitability extends not only to the sale of brand-new mobile phones but also to the sales of secondhand phones.
While dealing in secondhand mobile phone business carries its own set of risks, these risks are accompanied by great rewards.
A single sale of a fairly high-graded used phone such as an iPhone, or a Samsung can result in a profit of 100,000 Naira or close to it, especially if your negotiating skills are excellent in both the acquisition of the phone from the previous user and its subsequent sale to a new customer.
Challenges of starting a mobile phone business in Nigeria
Here are some of the common challenges you may encounter when starting a mobile phone business in Nigeria:
1. High Competition
2. Counterfeit Products (especially in accessories)
3. Regulatory Hurdles
4. Importation Challenges with Tariffs and Custom
5. Currency Fluctuations (affects those who source their inventory outside Nigeria)
6. Technical Knowledge due to the Ever-evolving Mobile Phone Technology and Features
7. Economic Factors (inflation, and changes in consumer spending habits)
8. Logistics and Inventory Management
9. Security Concerns