Why Dropshipping Is A Horrible Business

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March 10, 2020

You’ve been told that DropShipping is the ultimate way to make big money! Probably, those ‘Fake Gurus’ are offering to sell a course to you on how to Drop Ship—they’re showing you fake numbers in sales and ROI. Don’t be Scammed, here’s why Drop-shipping is a Horrible Business.

Generally, dropshipping is geared towards individual marketplaces, e-commerces, and entrepreneurs. The process consists of receiving sales orders online and forwarding them to the supplier, that is, the dropship partner, which in turn sends the product to your customer on behalf of your company.

As a result, you do not have to manipulate or have access to the product, you only do the intermediate for sale. The profit from this process comes from the price difference between the amount you disclose in your online store and what your dropshipping partner charges.

Dropshipping was one of the latest—we’ll call it “business out of a box” schemes that has been around for a few years now. This is where internet marketers claim that if you buy their course, they’ll teach you how with very little effort.

You can make money, quit your job, buy a Lambo, without much effort. There are many forms of it: eBay dropshipping, amazon dropshipping, print on demand, etc. The funny part is that the forms varies from location to location, and there’s nothing you can do about it.

Source: nestify.io

The whole premise is that you can find these so-called “winning products” from wholesale distributors, usually from China with Ali-express. You find the winning product. You get traffic to your website via paid ads on Facebook and Instagram.

People buy, you pocket the difference—aka retail arbitrage!

So Why won’t Dropshipping Last?

When you get paid at a job, you made money because you provided value to your employer in the form of your labor. Isn’t that right? You know the answer. Value—it is!

And in every other business it’s the exact same—you make money from customers when you provide enough value to them. The more value, the more money you make. So money is really just a storehouse of value. You can’t argue that—I’ve always advised that the more value = more cash!

In JeffBezos own words, “customers that buy products online only care about these three things: low prices, big selection, fast delivery.” And since that’s literally all Amazon focuses on, that’s probably why Jeff is the richest man in the world!

Yet, these are the only things people and online gurus focus with dropshipping:

— How I can do the least amount of work?

— How can I make enough money to quit my job and fire my boss?

These and more are just a tip of the iceberg—you’d be surprised as to their passion.

And there lies the problem—the entire idea and business model of dropshipping completely neglects what every customer wants. You provide next to ZERO value to customers! Which is not a good sign of a business or business leader for goodness sake, yet they’ll not listen.

How are People Making Money from Dropshipping Then?

First -movers.
Low margins.
Fake numbers; and fake gurus.

Even if you can make a profitable dropshipping business, is that the best long term business model to get into? I mean really? That question defies most of them!

The Big Questions

Q: So why so many dropshipping gurus?
A: Selling online courses!
Q: Is there any case where dropshipping is viable?
A: There are other ways to provide value. Provide luxury. Find an under-served niche. Have a personal brand. That’s how you can turn up!

Conclusion

In dropshipping customers are often neglected for profit. Dropshippers tend to sell a product to a customer only once. This can lead to a poor customer experience. This has led to a lack of trust in this business model.

Coronavirus: Nigeria Close to Another Recession as Oil Price Plunges

By

Samuel Nwite

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March 10, 2020

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Nigeria’s proactiveness in the fight against coronavirus has been remarkably effective. So far, there have been only two confirmed cases in the country and the National Center for Disease Control (NCDC) has put up a tremendous effort to contain it. About 28 people are being monitored across five states and the state governments are giving it their best shots.

The rest of the world has been in awe of the pragmatism that has kept the epidemic at bare in Nigeria and some other African countries. However, while the Nigerian government has managed to curtail its outbreak, the virus appears to have found another way to deal with Nigeria.

At the end of the meeting between members of the Organization of Petroleum Exporting Countries (OPEC), in Geneva last week Friday, oil prices went further down from its already plummeted status as the alliance failed to reach agreement on production cut. And that put the world’s markets at dwindling positions that have seen stocks tumbling and prices crashing.

In the past 24 hours, the oil price has fallen 20% further from 9% on Friday. Brent crude was $45.18 per a barrel and West Texas Intermediate crude, the U.S. benchmark was as low as $41.11 per a barrel.

Update shows that price has nosedived to $30 per barrel, almost half the budget benchmark of Nigeria.

In view of this, President Buhari has set up a committee to assess the impact of coronavirus on the 2020 budget as its effect keeps pushing the oil market downward. The committee chaired by the Minister of Finance/Budget and National Planning, Mrs Zainab Ahmed.

Other members of the committee are the Minister of State, Petroleum Resources, Mr. Timipre Sylva; the Central Bank of Nigeria Governor, Mr. Godwin Emefiele; the Minister of State, Budget, Mr. Clement Agba, and the Group Managing director of the Nigerian National Petroleum Corporation, Mr. Mela Kyari. The committee is to submit the report of its findings to the president on Tuesday.

The Minister of Finance said the committee will have to figure out if the $57 2020 budget benchmark will be reduced. How much will be reduced in case the findings point at reduction? Is also a question the committee will provide an answer to.

Ahmed also noted that it will mean cutting down the N10.59 trillion budget if in any case, the benchmark will be reduced.

But the threat appears to be far more than what these measures can contain. The force responsible for the crash in oil prices is synonymous with coronavirus which is still at large, and lack of agreement among OPEC members on oil production cut has made the situation worse and Nigeria more vulnerable.

Saudi Arabia announced a massive discount to its official selling price for April, as the country is reportedly getting ready to increase its production above 10 million barrel per day mark. The kingdom has placed its production at 9.7 million per day even though it has the capacity to pump at 12.5 million barrels per day.

The disagreement between Saudi and Russia last weekend means that every country will produce and sell at will, a situation that will aggravate Nigeria’s woes due to the cost of production. Unlike Saudi Arabia with the lowest cost marginal cost of production placed at $8.98 per barrel, Nigeria is producing at the cost of $30 per barrel for deep water and $15 for onshore production.

Oil prices are likely going to plunge further in the coming weeks, far below the budget benchmark. Goldman Sachs said it should be expected to fall around $20, which will reduce the budget projection to a fiction and revenue generation from other sectors of the economy cannot assuage the impact. That means, another recession looms as the solution appears to depend more on many external factors that Nigeria could do little or nothing about.

It could be recalled that Nigeria went into recession in 2016 when oil price fell to $27 per barrel, and it took a rebound in the oil market for the country to get out of recession.

Experts are encouraging the federal government to take practical steps to ensure that the situation is arrested before it gets out of hand.

Former Director General of Bureau of Public Service Reforms (BPSR), Dr. Joe Abbah advised: “With oil prices plummeting and public debt soaring, now is the time for the Economic Advisory Council to earn its stripes. Now is the time for president Buhari to listen and take tough decisions on cost of governance. Now is the time for EAC members to walk away if he doesn’t.”

Others have advised the government to remove fuel subsidy, float the naira and cut the cost of governance. Nigeria’s foreign reserve seems to be the only hope since the country has been on borrow spree. Alas it is on life support at $37.5 billion, and with the rate of the oil crisis, its depletion will happen sooner than expected.

Data Matters in Policy and Politics -Ojebode, UI Don

By

Mutiu Iyanda

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March 10, 2020

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The 2016 United States presidential election and the controversial role of Cambridge Analytica alarmed the world and alerted it to the role of large data in politics and policy. Using data sourced most times without the owners’ consent, Cambridge Analytica succeeded in guiding the composition and dissemination of the campaign messages of the Republican Party in a way that played on the fears and aspirations of the American individual person and subgroups.

The razor-sharp, surgically targeted messages were almost irresistible because they were like sincere whispers of a close friend telling each voter about the deepest and unutterable secrets and fears of their hearts – secrets and fears that were detected through large data analysis. The world woke up to this perversion when it was too late; Cambridge Analytica disbanded itself, but it all left us with a message: data matters in policy and politics.

But have we not always known that? We very much do. That is why at the end of nearly all academic publications in the human sciences, we have policy recommendations. No matter how remotely connected to policy the study is, we attempt to ram in some policy recommendations. The result of this is known: very rarely does any policy maker take our recommendations seriously for obvious reasons. These reasons include first, many of our studies are not policy-engaged – they are only policy-appended or policy-relevant. Second, the policy makers do not read our journals and books. Third, there is a plain aversion to intellection among our bureaucrats and politicians. There are more reasons.

The foregoing situation is what makes this publication of immense importance in my view. Here is a detailed, data-driven publication that seeks to engage governance, right from the start– not at the end. Its focus is sharp– citizen engagement and communication infrastructure. Its audience is defined– policy actors. Its language is also largely devoid of our cryptic academic jargons which policy actors find discouraging.

Anyone who would govern at this age needs a voice like the one we hear in this report, the voice of a credible interrogator of the specific aspects of our society and governance. It is my hope that the target audience of this report will take it seriously, and amend its communication strategies accordingly.

Editor’s Notes: This is a foreword written by Professor Ayobami Ojebode, Department of Communication and Language Arts, University of Ibadan to Osun Civic Engagement Report released by the Positive Agenda Nigeria in 2019.

Download the report here.

Amazon Goes Double Play With “Just Walk Out”

By

Ndubuisi Ekekwe

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March 9, 2020

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This is another double play innovation: “Amazon on Monday announced it will now offer its cashierless store technology, called “Just Walk Out,” to other retailers. The technology uses a combination of cameras, sensors, computer vision techniques and deep learning to allow customers to shop, then leave the store without waiting in line to pay. This is the same technology that today powers the Amazon Go cashierless convenience stores and Amazon’s newly launched Amazon Go Grocery store in Seattle.”

Just like it introduced AWS, Amazon has another product it can “tax” retailers just as it got them into its cloud business after making them see a hopeless future of physical retail in U.S unless you are Target, Bestbuy or Walmart. Yes, if you are a retailer and use this technology, Amazon is very sure that as you grow, it has a portion secured because you will need more of Just Walk Out!

You run an ecommerce operation, and your cloud services come from Amazon. You run a digitized retailing system, and the services come from Amazon. Think of the power of double play strategy working on you!

This is the ATM machine of retail. Yes, just as banks eliminate those special people to save money in front offices, Amazon has put a steroid on job destruction in the retail sector.

Just Walk Out technology enables shoppers to simply enter a store, grab what they want, and just go. Born from years of experience at Amazon Go, Just Walk Out uses a combination of technologies to eliminate checkout lines. We now offer retailers the ability to leverage this technology in their stores to help bring fast and convenient checkout experiences to more shoppers.

In Just Walk Out-enabled stores, shoppers enter the store using a credit card. They don’t need to download an app or create an Amazon account. Our Just Walk Out technology detects what products shoppers take from or return to the shelves and keeps track of them in a virtual cart. When done shopping, they can just walk out and their credit card will be charged for the items in their virtual cart. If shoppers need a receipt, they can visit a kiosk in the store and enter their email address. A receipt will be emailed to them for this trip. If they use the same credit card to enter this or any other Just Walk Out-enabled store in the future, a receipt will be emailed to them automatically.

Nigeria Has Been Downgraded by Standard and Poor’s (S&P)

By

Hifzuddeen Garba

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March 9, 2020

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Perception and Reality:

Recently, the International credit rating Agency Standard and Poor’s (S&P) announced that it had lowered Nigeria’s credit rating to “negative” from “stable” due to it declining foreign exchange reserves.

Foreign exchange reserves levels have fallen from $45 billion at midyear 2019 to $38 billion at the end of 2019 and $36.5 billion in February 2020. With the S & P outlook change, all the three international rating agencies have a negative outlook on Nigeria’s sovereign credit rating.

The issues highlighted befalling the Africa’s largest economy include, the nation economic growth remain weak, slower than it several peers at similar rating level, government sizable debt, strong dependence on oil revenue, and external pressure, signal by dwindling foreign exchange reserves, owing to the late passage of the budget in 2019, resulted in increased financing from central bank through overdraft facilities.

The reality is that the tougher economic condition in the country is likely to worsened by declining oil prices, triggered by COVID-19 pandemic and compliance with OPEC quotas of 1.77mb/d ( with other possible cuts).

Certainly the negative credit rating signaled a possibility of costlier debt should Nigeria proceed with its Eurobonds, foreign investors could demand higher premium on the back of perceived risk rating due to the downgrade. Amid increasing pressure on oil revenues with increasing instability of the global economy, a broadly defensive foreign exchange policy stance and rising FGN debt obligation, perception seem rather than agreement with reality.