Starting and successfully running an online retail company
is not a joke. It requires lot of
courage, passion and hard work to synchronize the entire supply chain - from
getting right partners to reach out to the end customers. In this journey, many
have sleepless nights to get their business going. We have talked with many
young entrepreneurs who see lot of potential in selling online. But at the same
time, they have shared some of the challenges that they have gone through or
still going through. Here are few tips from those who have already “Been There,
Done That”.
Identify the need : Before starting an ecommerce company ,
check out if you are adding any value. “We
wanted to make sure that people do not have to travel to different places to
buy authentic products from the places famous for them. This was an idea which
was never executed in India and we had conviction that there is ample demand
for such products which is unmet, says Zuhai Khan, Co-Founder of ShopAtPlaces.” At the same time, Founder of Oyechotu – Indian
Food Abroad, Ruchita Desai says, “It was
out of personal experience. I have lived outside of India and being the
telecoms profession also traveled around many parts of the world. The most
pressing problem for Indians who are living abroad is good, authentic Indian
food. I thus, started the venture of delivering Indian food products to Indians
living abroad.”
Major Investments: There are multiple cost and revenue
models in each online business. While many invest majority of their budget in
procuring inventory, other are investing in marketing and building IT
infrastructure. “As a startup you need to make wise decisions on spending based
on priorities. Identification of core
assets, prioritizing them based on the business maturity stages and spending
the right amount is the key. To OyeChotu.com, the main assets are ecommerce
site & the logistics. We spend most of the budget around it. For a good
business idea you will get many opportunities, but prioritize and invest your
time, effort and money on the key ones. You can't do everything or else you
will do nothing” , Says Ruchita Desai, Founder of OyeChotu. While Investment
Banker turned Internet Retailer , Zuhaib Khan created financial model and found
out the costs involved - both fixed and variable - through public and private
sources and plugged in those costs in the model. Sometimes they had to speak to
industry sources to get an idea.
Ecommerce Platform : There is always a confusion, whether to
build our own platform to sell things online or should we try to get hosted,
SaaS based platform to launch online store. While former gives you lot of flexibility
but at the same time huge cost of building and maintaining it, later is other
way round. Companies like Shop.inonit is using a hosted platform Martjack but Shopatplace
and Oyechotu think differently. “We have invested to build our own e-commerce
site as we wanted lots of features and customized modules which would have been
difficult to do on a packaged solution and would have been more time consuming.”,
Says Zuhaib Khan from ShopAtPlaces.
Logistics: Customer wants - Timely delivery in a Good Condition.
“We wanted to deliver across India from the day we started operations with a
good service offering at the cutomers' end and hence we tied up with 3 vendors
at the start. We are shipping items through DTDC, Javas and Indiaontime as of
now. We have tied up with Fedex for international deliveries. All 4 of them are
quite reliable.” Says Zuhaib Khan.
Challenges Faced: “We are improving our packaging so that
product quality remains intact. Sometimes products are out of stock thus
delaying the delivery service levels. Apart from that we have not seen any
logistics challenges.” Says Ruchita Desai from OyeChotu. “Tracking packages and
ensuring that they reach the customers on time is one of the challenge as the
infrastructure is not that developed in India.”, says Zuhaib Khan from
ShopAtPlaces.