The verdict in three sentences
The headline price of an online store in Lagos is only part of the real cost: it hides hosting, payment fees and logistics. In 2026 development runs from NGN 400,000 to 1.2M, but the total cost of ownership (TCO) over year 1 must include monthly hosting, 1.5 % per payment and NGN 1,500 to 3,000 delivery per parcel. Once these lines are costed, break-even is simply a matter of order count.
Year-1 TCO line by line
Reasoning only on the development price distorts the decision. Here is the realistic breakdown of total cost over twelve months for a Starter-tier store in Lagos.
| Line | Year-1 cost (NGN) | Basis |
|---|---|---|
| Store development | 400,000 - 1,200,000 | one-off |
| Managed hosting | 180,000 | 15,000/mo x 12 |
| Domain name | ~ 8,000 | annual |
| Maintenance | 300,000 - 600,000 | 25-50k/mo |
| Mobile/card payment fees | variable | 1.5 % of revenue |
| Delivery | variable | 1,500-3,000/parcel |
| SMS/email | 30,000 - 120,000 | volume dependent |
The last three lines are variable: they grow with sales but stay proportional to revenue, so they remain sustainable as long as per-order margin covers them.
Break-even in number of orders
The right reflex is to convert fixed cost into a target number of orders. Here is a simulation with an average basket of NGN 12,000 and 40 % gross margin (about NGN 4,800 margin per order, before variable fees).
| Scenario | Year-1 fixed cost | Net margin/order | Orders to break even |
|---|---|---|---|
| Lean Starter | 850,000 | ~ 3,800 | ~ 224 |
| Standard Starter | 1,200,000 | ~ 3,800 | ~ 316 |
| Growth | 1,800,000 | ~ 4,200 | ~ 429 |
At 40 orders per month, a standard Starter store reaches break-even in about 7 to 8 months, then turns clearly profitable.
Mini case study
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Chioma, an Ankara fabric seller in Lagos, invests NGN 900,000 in a Starter store, with NGN 15,000/month hosting and NGN 35,000/month maintenance. Average basket NGN 12,000, net margin ~NGN 3,800/order after payment and delivery fees. At 50 orders/month she earns NGN 190,000 net margin monthly; her annual fixed costs (~NGN 1,200,000) are covered in about 6-7 months. Year 1 ends with net profit after full payback.
FAQ
Why isn't the development price enough to budget?
Because it ignores hosting, maintenance, payment fees (1.5 %) and delivery (NGN 1,500 to 3,000/parcel). These lines form the real year TCO and change the profitability maths.
How many orders to break even on a store?
With an NGN 12,000 average basket and ~NGN 3,800 net margin, you need about 224 to 316 orders over the year for a Starter store. That is 18 to 26 orders/month.
Should delivery be charged to the customer?
Usually yes. Charging NGN 1,500 to 3,000 per parcel protects your margin; some stores offer free delivery above a basket threshold to raise the average ticket.
Is the TCO very different in Conakry?
The structure is identical; only the amounts change (development, delivery and fees in local currency). The break-even logic by order count stays the same.
Let's talk about your project. We build the year-1 TCO and break-even point for your Lagos store. 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.
