SPECIAL REPORT: ‘New Week, New Price’ — How Small Businesses Survive in Latest Nigeria
Less than a month after its last upward price review, W’s Bakeshop, a pastry shop in the Yaba area of Lagos State announced that it would be reviewing the prices of its whipped cream cakes and mini-trays. The pastry shop was already running at a loss, the management said in a social media post on Wednesday.
“Genuinely, this has been the most exhausting rat race I’ve ever seen. We’re sadly reviewing the prices of a few things: our whipped cream cakes and our mini trays,” W’s Bakeshop wrote.
POV: you review your prices by October and less than a month later you’re already running at a loss.
It’s so tiring to keep going to the market and have the prices of every single thing double and double and triple every single week. I’m so tired. Genuinely this has been the most… pic.twitter.com/caeBNdd8hg— W's Bakeshop (@Ws_bakeshop) November 15, 2023
Ajoke Onifaari, the founder of the Onifaari Brand, a local scarf, bag, and gift box company, also posted on her X page on Monday that she was considering a review of her bag prices.
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Upward price reviews of goods and services have become more frequent as inflation continues to shoot up with an unstable exchange rate. Faith Adebayo, the founder of Alluring Aud, described doing business with the current economic realities as stressful.
“For my brand, I sell different kinds of fragrances, and the idea is to be able to sell to anyone and everyone, meaning regardless of your budget, you should be able to get a good fragrance for a N5,ooo minimum budget,” Adebayo told FIJ.
“But right now, it’s really difficult to provide that same service to my clients, especially with the unstable rates and increased prices.”
Alluring Aud has reviewed the prices of its products more than five times in three months. “At a point, it was new week, new price,” she said.
The result is poor sales. “When the price review started, most clients had to go for a cheaper alternative because they had budgets. But as a small business owner, you have to know how to work situations like this,” she said.
One of the things Adebayo does for customers is provide discounts. “Discounts have been very helpful since I started this business, and they are still a very good tool for my business. It saves my clients some money,” she told FIJ. But when asked if it was still feasible considering the current economic realities, she said she tried her best.
“As much as I want to make sales often, I also try to put my clients into consideration. Imagine a client that got two items for N20,000 a few months ago, and right now the new cost is around N32,000. If I’m able to sell for N30,000 and still make a reasonable profit, that’s fine with me. My client is happy, and I’m happy too,” said Adebayo.
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But for how long can she maintain this model? Adebayo told FIJ how the fluctuating and increasing dollar rates affect her business. Most of the perfumes are imported from Dubai and Germany. The unstable rates affect everything: the cost of purchasing, shipping, etc. For example, you buy a perfume for N20,000 to sell, and when you restock, you buy it at a new price of N25,000. In fact, some perfume prices increased by N20,000 – N30,000 extra,” she said. But that was not all. Logistics is also a problem.
“Logistics here in Nigeria is also [an issue]. For instance, delivery used to be N1,500, but now it is N3,000. Only a few places are N2,500. We have the new price of fuel to blame here,” she said.
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To stay afloat, she has directed her focus to Arab perfumes and high-demand, high-end products.
“Arab perfumes! They’re life savers, if you ask me,” she wrote to FIJ in a message. “Let me explain. So there are Arab designers and niche fragrances. Arabian perfumes like Lattafa are dupes for designers and some niche brands, and their performance is great. So, a client can have a budget of N30,000 and I’ll recommend one or two perfumes within his or her budget.
“For high-end products, it’s best to stock up items that are in high demand; with time, one would definitely sell.”
[FIJ]
