K. Raja was an online shopper first before he joined the other side of the table. While searching for a particular product one day on eBay, the online selling switch got activated in his mind. Armed with inventory, as he was already operating a retail shop selling computer peripherals, he made his first listing on eBay in 2009.
Four years on eBay led to his own online marketplace, discountmall, in 2013. With around 18,000 orders per month, accounting for Rs 60 lakh revenue, Raja and his team wants to reach the Rs 2 crore milestone in the next six months.
Raja talks about his bitter-sweet online selling journey to IOS.
(IOS) Since you had ready inventory, was it easy entering the ecommerce space?
(Raja) We used to source our products from the open market for the retail shop. When I decided to try out online selling, I listed a tablet PC first on eBay, which sold almost instantly. Yes, the ready inventory gave me the confidence to move ahead and try out listing more products. Initially, I started listing 3G data cards. It was good working with eBay and sales turned out to be quite good.
Is the shop still operational?
No, it was closed in 2012. Till then, I was doing business on offline and online channels simultaneously. But the online selling magic had caught up and the profits were looking good. So I decided to concentrate completely on the online channels.
What were the early difficulties you had to face?
There is a problem with eBay policy. They hold the entire amount if they get a single claim/dispute and even after it is sorted; we have to call them repeatedly to have the amount released.
We tried out Shopclues also, but it was not a good experience either.
So that’s when discountmall happened?
We were getting good sales on eBay, so I felt it would be better to open a separate marketplace to leverage on the demand for our products. Once we launched it in August 2013, there’s been no looking back. We don’t sell on other marketplaces now.
We are still in a transition period, where we are learning something new everyday. There is a new challenge around every corner and we have to solve them.
You still keep ready inventory?
Most of it, yes. But as volume of sales increased, we started procuring as the requirement arose.
Your own marketplace would mean a bigger team?
Well, we are about 12 of us with distributed responsibilities to ensure smooth running.
Was it easy standing on your own with so many competitors?
As a startup, it was difficult to gain the trust of both customers and vendors. But we were prepared for this. We made advance payments to vendors initially till we slowly built up a relationship with them and got their faith. When customers placed orders, we used to call them individually and explain about our portal and special deals, which were applicable for each of them. So we tried to focus on personalization to make them feel special. I guess that clicked.
Did you use any marketing channels to promote your sales? Did you participate in any exhibitions or retail outlets?
I used facebook and google adwords, both of which are good. No exhibitions, I don’t think online stores need to participate in such events.
Although you have laid a solid foundation for your online business, is there any challenge that makes you insecure?
Capital is foremost, as we need to bear the cost of every aspect of our operations. It is critical to channelize the revenue we get ideally to ensure further growth.
Also, logistics is a major challenge, as we have to depend on a third party for it. A goof-up on their part still reflects on our service as sellers so we have to have our plan B’s in place at all times.
Raja considers good service to customers as his success mantra. Selling at low margins has helped them to attract customers into coming back for more. “Try to be strong in fundamentals like customer and vendor relationship, payments, refunds etc,” is what he advises young and budding sellers, something that has helped him to be where he is today.