My dog had the same thing. I thought she might have gotten her nipple caught on something. I tried cleaning it and putting an antibiotic on it, but it kept coming back. Since my previous dog had a bout with cancer and "lost", I didn't want to waste anymore time. I took her to the vet. He looked at it and said it needed to be taken off. He didn't see any need for a biospy and all the extra costs. He said it is something he has seen many times in female dogs. So I agreed, and within 15 minutes the procedure was done. The dog was not put to sleep, but was given some kind of local anestesia. It only cost me 30 euro..($25). It will probaly cost a little more in the states. That was over a year ago, and she is doing fine from that procedure. She has other problems, but they are a separate matter.
It is well worth it to get it taken care of before it turns into something that might not be curable.
Ginger gave you great advice. The only way to tell what it is is to make an appointment with the vet and let them take a look at it. Please let us know what he or she says.
Ghilly
It looks like there may be some discharge from that nipple? Is there, or is that the wrong impression I got from the pic?
My dog gets small breast lumps. I check her about once a week for any new ones. Every single one gets thoroughly checked out by the vet, even if I think I'm sure what it is. The thing about any suspicious lumps, that could possibly be cancer....if they are taken off while still very small, then something has been 'nipped in the bud'. If they are benign, the vet should be able to tell.
On the other hand some lumps are a sign of infection, and need treating right away.
I'd take her to the vet, see what they say.
I have some more images if need be, but I could only upload 1 here.