28-year-old Ankit Aggarwal’s ecommerce journey started off like many others. From a 9-to-9 corporate job to a side project selling a few projects led the way to a full-fledged and flourishing online sales business.
The initial store was launched with just 10-12 designs, for which the responses were just average. But in a few months, they figured out the basics and sales increased. Humptee Dumptee turned into a full time venture.
In this IOS exclusive, Ankit shares more about their ecommerce journey including mastering the art of COD.
IOS: How did you start off?
Ankit: Our initial products were round neck tees for men and women in 2 colours, black and white. We tried our hands on marketplaces like Snapdeal, Paytm, eBay and Amazon, but they were too much hassle for building a brand. We decided to move away and focus our energies on building our own brand. It was the best decision we took.
What were the difficulties you faced on marketplaces?
- Commissions were very high.
- Policies and support were not seller friendly. In 2014, the average wait time between Snapdeal Customer Representative and us were around 20-25 minutes. eBay’s wait time was around 45 mintues. Nowadays they are quicker but there are still a lot of areas of improvement.
- There were a lot of fake COD orders in the initial days, which were eating into our profits.
- Payment cycles were long (15 days for prepaid orders to 1 month for COD orders).
- Return policy always favoured buyer. We took full responsibility for any quality issue but the “No questions asked” return policy made a lot of buyers abuse it.
Apart from these, what were the initial setbacks and challenges?
Dealing with suppliers and manufacturers was a major challenge. We had limited funding taken from our personal savings.
The problem was no wholesaler was willing to take smaller orders. So it was difficult to find such a supplier who would. That’s why we started with 2 colours only. Finally, we tied up with a local supplier, who probably made a good amount of money from the business we provided in the next 15 months. We are now dealing with multiple suppliers from different cities to meet the demand.
What is your current online presence?
We are completely focusing on our online store, www.humpteedumptee.in. From our earlier marketplace selling experience, we found only Amazon to be a favourable association. Policies are friendly with brilliant support from the team. We still sell on the platform and will be launching new products in January.
What are the marketing platforms you have used? What do you have to say about returns on advertising vs word of mouth?
We used Facebook ads and Google ads for a few months. Returns on FB Ads are better.
Mostly we expanded through word of mouth. Thing is, if you can provide an excellent quality product at reasonable price people will talk about it. It was surprising to us, that we were receiving almost 70% of our new customers from Word of Mouth. No ads, No marketing. It helps us to be on track also!
You talked about mastering COD, how did you work make that happen?
A customer opts for COD in 3 cases:
- He/she is not comfortable or doesn’t have an online payment method.
- He/she doesn’t trust your website, either with card information or genuineness of the website itself.
- ‘Maybe’ type customer, who thinks “I’ll take if it comes in x number of days” or “I like this product today, but maybe tomorrow I’ll change my mind.”
It’s the third type of customer you need to figure out. And believe me, it’s a very small percentage of customers. In our case, most of the buyers are genuine. We have systems and checks for this in place, but can’t disclose them. In the past 2 months our COD return rate was 1 out of 105 shipped Items. And we consider it significant.
Why do you feel businesses like yours are not suitable for marketplaces? And when you say businesses like yours, in terms of what do you mean this?
We deal in products that are “made to order” and we take full responsibility of quality and promises we make (like delivery time).
In a marketplace, brand building is hard. Customers don’t look for brand Humptee Dumptee, they look for a Tee with good design.
Marketplace policies are not seller-friendly; they are biased towards customers. Orders are returned because the customer has had a change of mind for something as simple as colour preference. Since marketplace offers them a No questions asked policy, they tend to abuse them.
Such instances are not sustainable for Made to order items.
Brand building on marketplace is difficult. But if you have to market your own store and build brand, don’t you need that much capital in hand? Apart from your personal savings, how did you manage the funds needed for developing and running your online store?
Selling on marketplace is something I call Illusion of Growth. Most of the marketplaces have the idea of Volume sales, but considering the number of sellers competing it’s not a practical Idea. You are not building your brand plus the margins are not that great unless you do the sales on high volumes.
Building a brand independently takes some time, but in the long term it will be beneficial. We are proud that Humptee Dumptee is completely bootstrapped. We haven’t raised any funding so far, and we don’t plan to do it in future either.
Limited resources give you the advantage of staying on track. What can any company do with extra cash? Spend on advertising right? We do a little less advertising and stick to building quality products. Plus word of mouth is giving us great returns!