Understanding and Leveraging on Digital Payment for Growth of Cooperative Business

Where are we coming from?

We were formally known, called, and addressed as ‘Esusu’, ‘Ajo’ or ‘Etipbe’ people in some other clime. We were adopting the name as a traditional form of identify to raise funds among people of common interest for mutual support of our members. In this process, fixed and agreed amount of money was being contributed at an agreed interval and was handed over to one of us, the treasurer. Our members therefore started to take turns to use the money. We equally had agreed on some other parameters in the taking up turns to benefit from the funds.

This Esusu, etc. give birth to the modern cooperative movements in Lagos State, Western Nigeria, and the entire Nigeria Federation as a whole. From records, Agege Planters Union was founded around 1907 with about 400 cocoa producers. The little plant that started to grow in Agege has now attracted 2359 cooperative societies with over 2 million members carrying asset base of over N33b as of June 2021.

This union can be taken to mean an artificial voluntary association of people who work together to promote their economic interest and achieve common goals by using the resources gathered by the society to provide financial support and assistance for their members.

Looking at it from another angle, co-operative society is seen as a voluntary business organization in which a group of individuals with common interest pool their resources together to promote the economic and welfare of their members in production, distribution and consumption of goods and services. The members engage in the distribution of products either directly from the manufacturers or wholesalers and sell to their members (consumers).

What are our roles in this developmental sphere?

We stock variety of goods from the manufacturers or wholesalers hence we are exposed to a wide range of goods.

We buy in reasonable quantity from wholesalers and sell in bits to the members.

We grant credit facilities to members so as to enable them enjoy goods immediately and pay later.

We give advice to our members (consumers) as well as the manufacturers/ wholesalers.

We bring products closer to our members to ensure that products are brought to the doorsteps of the consumers (members).

We fight against hoarding by wholesalers and retailers by ensuring that we stock lots of the products for use by members (consumers).

Our efforts also help in stabilizing the prices of goods by selling them at affordable prices to members.

Elimination of middlemen is an outcome from our activities by buying goods directly from manufacturers and selling them directly to the consumers (members).

We also assist our members in marketing their products (i.e., producers’ cooperative society) by ensuring fair prices for their products.

We are Organized into 4 Categories

Consumer Cooperatives – this category strives to provide goods and services at an affordable price for the benefit of the people/members

Credit Cooperatives - are made to provide loan services and savings for their members. The benefit of the credit cooperative society is that it offers loans to its members at little or no interest and there is convenient collateral to access the loans.

Agricultural/Farmers Cooperatives – this agricultural sector happens to be one of the major areas of production in Nigeria. Agriculture plays a major role in the Nigerian economy as it has helped to sustain commercial activities across the country. Farmers and agricultural cooperative societies are established to give a better life to farmers.

Multipurpose Cooperatives - seeks to help its members to scale over difficult economic situations. It cuts across everything and anything business.

 Take your Products/Produce to the Market

As a Cooperator, you can only add value when there is exchange of your products/services for cash/money value. You are a producer, creator, developer, planter, or call yourself by any name, you must be able to price yourself in Naira value terms. The more you exchange your products for value the more profit you make and more shall be your value. The size of your farm is as large as how much you can realize at the point you exchange your produce for Naira.

It is very important that you understand the inroad strategies to the market and the peculiarities in each entry point to a transaction enabled platform. The platform covers a traditional store rentage, retail outlets/chain stores, owned websites, social media channels, e-commence websites, and multivendor marketplace platforms.

 Guiding Principles for Entry into the Market.

You need to ask yourself some basic questions such as, what type of market am I looking for? What are the basic facilities/enablers that must exist to enhance my value? What will be my unique identity? What are the premium features for me? What are the policies on payment and settlement, delivery and return, customer services and supports, advert and social media engagement, access to backend, security of the channels, network/coverage, marketplace fees, transaction fees, insurance cover for goods in transit, issues resolution among others.

Product Distribution Channels.

There are options at your disposal but the answers to the questions above guide your choice of the channels. You need to look at your long-term business plan/objectives. Some people always advise, start small and end big. Remember a wrong strategy may lead to an expensive rework. Some people have gotten their fingers burnt over a wrong platform. Here are basic platforms available and some peculiarities you must identify and manage.

Own/Rent Premises Store – deploy PoS, enable Bank Transfer, manage failed transaction risk, settle rental fee, power, security – internal and external, attendant fee, insurance, pilferages, operate within acceptable hours, credit sales and payment challenges, etc.

Build Own Website –owned website built as per your design, purchase addon, plugins, management hosting, product uploads, security, manage logistics risk, upgrades/versions, systems administrators, backups, social medial handles, adverts, domain fees, bandwidth/network, payment on delivery and associated risk, etc.

Social Media channel: Facebook, Instagram, WhatsApp – manage logistics/delivery risk, stock management, manage trust/reputational risk, payment platform restrictions, fraudulent purchases, wrong/failed delivery, insurance cost for products in transit, payment on delivery and associated risks, etc.

Sale on e-commence platforms – lost identity, settlement risk, payment on delivery risks, product advert, transaction fees, hosting fees, stock management, etc.

Own a Store on a Multivendor Online Marketplace – branded online store, premium features, marketplace fee, transaction fee, a world of great/endless opportunities.

 Multivendor Online Marketplace

A multivendor online marketplace is an e-commerce site that brings sellers and buyers together in one place. It is a multivendor platform created to target those that cannot rent a store, create own website, sell on social media but want to maintain visibility and enjoy all the premium features. From experience a multivendor platform is richer in the delivery of the expectations. The benefits are endless as a result of shared facilities/services. The reach is unlimited.

Take the Benefits by Listing/Owning a Store on a Multivendor Marketplace Platform

The advantages of an online multivendor marketplace platform and the reasons many businesses sell via online marketplaces are enormous. We can summarize to include:

Bringing additional source of revenue, cutting marketing cost, allowing visibility, enabling internalization of businesses, creating transparency on product availability, stock levels and prices. The multivendor platform enables customers to compare prices and enables 24/7 shopping opportunities. The use of the platform generates trust between your brand and customer as the reputation of the platform is the selling point for the customers.

Customers are more likely to purchase from an online marketplace with a wide range of options. Businesses need to pay a fee/percentage of sales to the online marketplace platform operators. You can compare selling via your own e-commerce site vs. via a marketplace. The conviction is what will drive your next move.

Competition and brand awareness - A keyword search on a marketplace site displays your goods and services in a list with other brands and distributors. This kind of high competition could be an advantage for you, depending on how you rank when it comes to pricing and customer reviews.

Customer Acquisition - One of the biggest advantages of using online marketplaces is that they can make it easier to acquire new clients and expand your customer base.

Considerations in the Choice of the Multivendor Marketplace Platform

Certain features must be available on the platform of your choice. These may include:

Availability of multiple payment channels – bank transfer, payment systems, USSD, etc.

Multiple shipping/delivery channels for utilization by both customers and the vendors.

Tracking of the orders from dispatch to delivery at the customer location.

Geolocation – customers should be able to identify your store within the neighborhood.

Automatic stock management systems where the vendor is informed of the available stock with established re-order level, minimum quantity and stockout alerts.

Out of stock order queue where a customer can place order even where the product is not in stock waiting to be alerted when available.

Flexible return policies – returnable, non-returnable, returnable with replacement, returnable with cash refund and returnable with refund into wallet.

Full access to the vendor admin for management of inventory, price, promos among others.

Availability of loyalty points to draw customers who will always want to accumulate points for future use.

Social media reach and engagement levels will show you where products will reach.

Verification/validation of vendors before onboarding to eliminate fraudulent merchants from the platform.

Order pick-up for delivery from the vendor’s location is a cost cutting for vendors.

Conclusion

Step up the game. Key into the benefits technology has availed. Today, marketplaces are growing at a very fast pace. The future of your business’ success sits on online marketplaces. COVID-19 created the initial opening, cost of transportation is going to keep a lot of people at home. Focus on your niche and give all customers that come via online marketplaces superb customer experiences.

Marketplaces help small businesses reach a wider variety of customers who may not have heard of their product otherwise. Sign-on and list your products on a marketplace platform while you sit to watch you sales grow. Increase your value beginning today.