The verdict in three sentences
In Lagos, an online store can be built from ₦450k in a starter tier, but it is last-mile delivery that will make or break your margin. A dispatch rider costs ₦1,500 to ₦3,500 per delivery and cash on delivery fails in 20 to 30 % of cases, tying up your working capital. The real decision is logistical, not technical: choose between an in-house fleet and third-party couriers, and push MoMo/Paystack prepaid to cut returns.
What an online store really costs in Lagos
The website is only the visible part. Here is the 2026 order of magnitude for a Lagos merchant's starting costs.
| Line item | 2026 cost (₦ / FCFA) | Detail |
|---|---|---|
| Starter store build | ₦450k – ₦1.2M (~1 000 000 – 2 500 000 FCFA) | Up to 50 products, mobile checkout, Paystack/MoMo |
| Growth store | ₦1.5M – ₦3M | Unlimited catalogue, promo codes, seller analytics |
| Domain + hosting | ₦40k – ₦120k / year | Local .ng domain reassures buyers |
| Product photos (30 SKUs) | ₦120k – ₦350k | Decisive for conversion |
| Payment fees Paystack/MoMo | 1 – 2 % / transaction | Charged on each settlement |
| Launch advertising | ₦80k – ₦250k / month | Meta Ads targeting Lagos |
A serious merchant should budget ₦1.2M to ₦1.8M for the first year, excluding stock.
In-house fleet vs third-party couriers: the real trade-off
Delivery often accounts for 20 to 35 % of an order's cost in Lagos. Two models compete.
| Criterion | In-house fleet (bikes) | Third-party (GIG, Kwik) |
|---|---|---|
| Cost per delivery | ₦1,200 – ₦2,200 (wage + fuel) | ₦1,500 – ₦3,500 charged |
| Capacity | 12 – 18 drops/day/rider | Unlimited (on demand) |
| Lead time | 24 – 48 h | Same-day possible |
| Quality control | High | Medium to low |
| Upfront investment | Bikes, fixed wages | Zero, variable cost |
| Break-even | Profitable from ~25 orders/day | Best below 15/day |
Below 15 orders per day, third-party wins: no fixed cost. Above 25 orders, the in-house fleet becomes clearly cheaper and puts you in control of lead times.
Cutting returns with prepaid
Cash on delivery (COD) fails in 20 to 30 % of cases in Lagos: buyer absent, refusal, no change. Each failure costs ₦1,500 to ₦2,500 in a wasted trip. Offering MoMo and Paystack first at checkout sharply lowers that rate: prepayment mechanically removes unpaid orders and improves cash flow by several days.
Mini case study
Chioma runs a cosmetics store on Lagos Island. She handles 20 orders/day, average basket ₦18,000, product margin 35 % = ₦6,300 gross per order.
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- All COD via courier: delivery ₦2,000 + 25 % failure (~₦750 smoothed loss) → real cost ~₦2,750/order. Net margin: ₦3,550.
- Pushing prepaid MoMo (failure down to 5 %) with in-house fleet at ₦1,400: cost ~₦1,610/order. Net margin: ₦4,690.
Gap: ₦1,140/order × 20 × 26 days = ₦592,800/month recovered. Her store pays for itself in under three months.
FAQ
How long to launch my store in Lagos?
Budget 10 to 15 working days for a starter store, photos included. The bottleneck is usually catalogue prep, not development.
Should I buy bikes from day one?
No. Below 15 orders/day, a third-party courier avoids all fixed cost. Bring the fleet in-house when volume passes 25 drops/day.
Is cash on delivery essential?
It reassures some buyers but is expensive. Keeping it as an option while putting MoMo/Paystack first captures both profiles without hurting cash flow.
What launch ad budget?
A realistic range is ₦80k to ₦250k/month on Lagos-targeted Meta Ads, tuned to your observed acquisition cost.
What do mobile money fees cost?
Between 1 and 2 % per transaction depending on provider, charged on settlement. Trivial against COD's 20-30 % losses.
Let's talk about your project. We'll price your Lagos store and its delivery model in one session. WhatsApp +221 77 596 93 33.
Mohamed Bah
Fondateur, Kolonell
Passionate about digital and entrepreneurship in Africa, Mohamed has been helping Sénégalese businesses with their digital transformation since 2020. Founder of Kolonell, he believes every SME deserves a professional and accessible online présence.
