THE DANGERS OF SELLING ON KONGA AND JUMIA – MARKETPLACE RISKS

I start selling on Konga & Jumia last year and

have successfully sold and shipped over 250

different products nationwide without a single

review. BuyMart sales on Konga & Jumia have

exceed a million naira. This is a business I

started with just #10,000 in 2014. To be

completely honest with you, the store was just

an experiment. I don’t have a business plan or

any business continuity plan in place. I was

just having fun and never take it serious from

the onset. I was playing around on the

internet risking my money and enriching

internet service providers but something

change midway, I started getting bank alert

for little effort. All I have to do is just a basic

homework, buy the products, ship it to

Nigeria, list them on Konga and Jumia, they

do the marketing and advert, ensure I get

sales, give them the product to deliver to

customers and I get bank alert for successful

delivery. 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. marketplace -

Konga & Jumia1 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?

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. 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. 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. 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. 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. 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. 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.

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. 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. Konga will

suspend your store on their platform if: You

cancel orders You didn’t pay commission of

your self-fulfilled orders at due date. Your

store have many orders in arbitration You sell

counterfeit products You are fraudulent.

Jumia will suspend your store on their

platform if: If you cancel orders If you don’t

process and ship your orders within 4 days If

Jumia cancel your orders due to delay on

processing your orders If your order

cancellation rate exceed 30% in a week If

your order cancellation rate exceed 20% for 3

weeks If your order cancellation rate exceed

10% for 2 out of 3 weeks. 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.