Short Story
54-year-old Ali runs a trading company in Mumbai. He lives with his wife and two daughters of ages 19 and 13 who are studying currently. He also has a younger brother and a younger sister. His brother handles the shoe store that they own while Ali runs his business from another part of Mumbai.Ali currently imports tech gadgets from China and sells them through e-commerce stores such as Amazon and Flipkart. This story documents the challenges faced by a trader who is trying to access a larger market through e-commerce websites.
Business
- Ali started this trading business 15 years back by selling bags, then he moved on to perfumes, shoes, rice cookers and now spy cameras.
- Ali decides to pick the goods to sell in the market based on customer needs. When he starts feeling the customer needs have changed, he moves on to the other products.
- He neither is a part of any trader’s association nor has any tie-ups with brands.
- He believes that it only makes sense to take business advice from people who work in the same field because they could give one another perspective of the business as they have the required skills and knowledge.
A: How did you get the idea of starting this business?
A: Initially, I used to own a workshop where bags were manufactured. While I was doing that, I got offered a commission based job for the marketing of perfumes. I had to travel to different cities across the country and reach out to buyers and collect orders. The first time, I had gone to Lucknow and came back with a Rs. 2,00,000 order. From then, I sort of got consumed by this business. Other than my bag business, I marketed perfumes for 18 years, out of which the bag business lasted for 13 years. Only 15 years ago did I get into the trading business. So, you can say I’ve been working for almost 30 years now.A: How do you decide what product to sell in the market?
A: See, it’s not that difficult. When our products don’t comply with the demand or need of the market, we shift to the other product. We usually get this information from other traders, when we contact them to sell or buy our unsold goods. That’s where we generally get the idea of what segment of the market to tap into.A: Do you have any tie-ups with specific brands?
A: I usually sell products under an in-house brand, so we don’t have tie-ups with any such specific brand. I had tied up with online e-commerce websites, which is completely fraudulent according to me. They place fake orders, which get returned most of the times and we face such deductions which only the company has details of, which is not open to us. Ultimately, I get my product back as unsold and also lose out on some money. All of this, other than their high margins, which end up eating into my profits. The only e-commerce website I trust is Amazon because they do their work with complete honesty.A: What is the reason why you would only want to work with Amazon?
A: See, at the end of the day, each one of these e-commerce companies are money magnets. But, there are some people who nibble on your food or eat half of it, and Amazon is the former. The problem is, that these e-commerce companies reach out to us and promise to give us access to a larger market, but fill up the websites with so many sellers that there is only so much profit that we can make.
Finance & Banking
- Since Ali has an overdraft bank account, there isn’t any net banking facility on it. He makes most of his payments via cash.
- He prefers opening accounts with private banks only because he believes that they are a more efficient professional compared to public sector banks.
A: How frequently do you visit the bank?
A: I visit the bank at least once a week, because it is not very far from where I work or live. But I prefer using online banking as it is easier and quicker.A: Do you use any online banking modes?
A: I don’t actually get the opportunity to make/receive any online payments. Since, I have an overdraft bank account, there isn’t any net banking facility on it. Whenever I need to make any payments, I need to withdraw from my account and pay in cash.A: How do you decide to open an account with a certain bank?
A: I prefer opening accounts with private banks only. This is because their way of doing business is more professional compared to public sector banks. I will tell you in instance. An employee of mine had visited <public sector bank> for the purpose of closing an account. There were 3 days in continuation where I had to wait at the bank for 4 hours at a stretch. They unnecessarily harassed me and took really long for something so basic. He ended up having an argument with the authorities. After that episode, I swore to never associate myself with a public bank because their work ethic and priorities are really messed up.
Loans
- Ali has taken 3 loans in the past from Yes Bank, Capital First, and Flexiloans. He generally receives an average interest rate of 18%.
- He doesn’t compare rates or background of loan partners before taking a loan. He feels that the ideal scenario would be banks and other financial institutions distributing loans without asking for any documents as that is where he falls short to fulfill the requirements.
A: Have you taken loans before? What was the source?
A: I have taken loans from Yes Bank, Capital First and FlexiLoans. I won’t lie, but I had the best experience with Yes Bank. They had provided me with an escrow overdraft account and would only charge me for the amount I withdrew. Also, I tried to apply to Bank of Baroda for a loan, but it did not get passed due to some documentation issues. The interest rate I received from all the loan partners was around 18%.A: How many Credit/Debit cards do you have? Which banks?
A: I have 3 credit cards in total from Yes Bank, HDFC and CitiBank. I also have an account with BCB bank.A: What do you have in mind before you take a loan?
A: The best scenario would be banks or financial institutions distributing loans without asking for any documents. That is where I generally I fall short to fulfill the necessary requirements. Otherwise, I don’t really compare rates or backgrounds of the loan partner. If they are willing to lend me money, I am willing to borrow. When it is urgent, when payments need to be made, I do not think about anything else other than procuring that kind of money from the market.A: Have you ever defaulted on any payment in the past? How did you make these payments?
A: I have always made sure that I have money in my bank account on the due date of my EMI obligations. I have never had a cheque that has bounced. Rather, there are times where double the amount gets debited from my account due to the fault of the loan partner. But I have always maintained by streak of not defaulting.
The money used to get auto-debited (NACH) from my account on the due date of the interest payment.A: Has there ever been a time where you had to take a loan due to shortage of cash or a stagnant inventory?
A: No, there has never been such a need. We manage to sell all of our stock. And even if such a situation arises, we make quick arrangements with our vendors and ask for an extension or flexibility of payment due to rough market conditions. All of this only happens due to the bond that is created. I never take a loan because I really need it. I am more concerned about how to pay it back in time. Banks, on the other hand, should not judge borrowers by their documents and by their business ability, to recover the loaned amount. For example, I am not comfortable with providing my GST details. I am okay with providing my bank statements, though. It is a very ambiguous system and they should make the process more transparent.A: How do you file your taxes? What taxes do you file?
A: I have a CA who helps me with the filing of taxes. I pay my GST every 2–3 months and everything is handled by the CA. He receives the online bank statements and does the necessary filing. Other than that, I just pay my income tax.
Payments
- Ali has a billing system for his business for printing invoices for business-related transactions.
- The major expenses for the business are the rent and salaries to the employees who are paid through cash; electricity bills are paid online through credit card.
A: What are your major utility bills for a month?
A: I need about Rs. 2,00,000 every month to run the show. This includes the rent of the office, salaries, electricity bills, and other miscellaneous expenses.A: Have you ever defaulted on any payment in the past? How did you make these payments?
A: I have always made sure that I have money in my bank account on the due date of my EMI obligations. I have never had a cheque that has bounced. Rather, there are times where double the amount gets debited from my account due to the fault of the loan partner. But I have always maintained my streak of not defaulting. The money used to get auto-debited (NACH) from my account on the due date of the interest payment.
Employees
- Ali currently has 4 employees who help him out with running the business.
- He usually gets references through contacts and makes sure they meet his work requirements before hiring them.
A: How do you find your employees?
A: I can’t trust everyone, obviously. Whenever I hire new employees, I get their reference through contacts in the same field and I make sure they have a prerequisite to the business before hiring them.A: Do you face any difficulty to retain your employees?
A: See, there never comes a point where any employee feels that the work is not satisfying them or paying them enough. They know that it has been a struggle to reach such a stage. So, whenever they leave or join, is all according to the consent.
Vendors
- Ali is currently working with 2 vendors who are based out of China.
- He has a certain understanding with his vendors and pays them as per his convenience.
A: Where do you source your products from/Who are your main vendors?
A: There are only 2 vendors that I am currently working with, who are based out of China. I feel, that is the only country with the best products in terms of price and quality. There are a lot of Indian middlemen in Guangzhou who make buyers like us meet the right kind of seller. Plus, my old business partner lives there and he helps me out whenever need be.A: How do you choose your vendor before working with them? Do you change associations often?
A: See, I don’t ever get to meet these vendors in person. But, at the end of the day, business runs on trust. This is the only reason why I work with less number of vendors and work with them for long, building trust and relations over time.A: How do you contact your vendors?
A: Honestly, I have never been to China myself. But I have built relations with some useful people there who can help me find business. I contact those people over the phone or WeChat, since WhatsApp is banned there. I just need to place an order and all my requirements are shipped accordingly.A: How do you pay your vendors?
A: I know it is not a very conventional way of making payments, but I do make these large payments through cash.
Customers
- Ali has been in this business for the last 15 years and deals with customers who believe in quality over quantity.
- He gives credit to his regular customers with no stipulated credit period only on a need basis and depending on the relationship.
A: Who are your main customers?
A: I only have very select customers who believe in quality over quantity. I have been in this business for the last 15 years and have marketed my business at the national level. Spy products have been the only constant product I have been selling for all this while because I knew that this market would grow because of the demand for these products. There isn’t anyone who doesn’t know my business when it comes to this domain.A: Do you give credit to your customers?
A: I would only give credit to the customers I trust, which are very selective and have been regular customers of the business, with no stipulated credit period.
Tech Adoption
- Ali’s business is listed on Amazon and JustDial for the last 15 years.
- He doesn’t believe in marketing his business online, though he has sent a broadcast of emails and SMSs to potential customers in the past.
- He does not accept digital payments like Paytm or Google Pay.
A: Is your business listed on any online platforms?
A: Other than Amazon, my business is listed with JustDial for the last 15 years. This has given the business a required boost, as people from outside Mumbai would approach me because I sort of had a monopoly over spy products.A: Have you ever tried marketing your business online to find new customers?
A: I have tried a few methods, actually. I have sent a broadcast of emails and SMSs to potential customers or the target market, so to say. But, now I don’t really feel the need to do so. Because of the internet, there are so many people from all parts of the world/country that can get in touch with you and this makes business smooth sailing.A: What apps do you generally use on your phone?
A: I mainly use WhatsApp on my phone. I don’t really use the phone for any other purposes like entertainment or news, etc. Even on television, I watch old films and listen to old songs. Only if there is any film which is really hyped up, do I go to the theatre to watch it. I like to keep myself oblivious from all the drama and negativity present in this world. It gives me peace of mind.A: Are you a part of any business related WhatsApp group that might help you?
A: No, I am not a part of any such group. Personally, I believe that the more your business is private, the more success it can achieve. Otherwise, there are various weaknesses that can be exposed, making the business vulnerable. Even the people who say that the new way to grow business is marketing, is just bookish talk and not the correct way to run a business.
Business Goals
- Ali plans to continue this business until he can last it out.
- If he has access to greater capital he would invest it in buying a larger property from where he could run his business.
- Ali also aspires to direct a small scale Bollywood film someday with his own money.
A: What sets your business apart?
A: In this business, the customer does not always have full knowledge of the product. There is a lot of assistance they need sometimes. Our team is just this one person, who is skilled with such knowledge and assists our customers even at 2:00 a.m. They end up thinking that we have a call centre team, whilst there is only one professional handling such technical queries. In today’s time, people want everything to be cheaper than what it already is. This leads people to build products with cheap material, which lasts for a shorter span, thus losing out on prospective business. I feel I could never let go of the fact that my product has to be the quality I charge for. I might lose out on business but never compromise on quality.A: How have you seen the business change in recent times?
A: I don’t really think the business has changed a lot over the years. I would rather say that the business has only increased over time. We get more orders and work is much more than what it actually was. It boils down to only one thing — How well can you sell your product? I have the confidence to tell you that if you get my any product, I would be able to sell it and make money. I think the only thing that has changed is the fact that before, we had to go out looking for customers, but because of how connected we are, technologically, there are customers that approach us.A: What do you think is the mantra to run a successful business?
A: I think the only way to reach great heights in your business is to be honest. Never steal anybody’s money and never lie to them. I don’t believe in lying or any such deceitful behaviour. Even if that means I am earning less money, at least I have no guilt to eat me up.A: What is your long term goal in life?
A: This might sound amusing, but I want to make a movie. I feel if people are anyway making rubbish films nowadays, why should not I try my luck. At least, it might be funny if nothing else.
Credits:
- Interviewed and transcribed: Ansh Chawla, Flexiloans and Dharmesh BA, D91 Labs
- Analyzed and published for Medium: Geetika Shukla
About the research:
This documentation is a result of the in-person interview, along with the participants’ consent. The interviews might be conducted in their native languages and translated to English in the best possible way to reach a large audience.
Disclaimer: The identities of people and places in this documentation have been changed to honour the privacy of the participants.
About D91 labs:
This research was executed and documented by D91 labs. D91 labs is an open-source initiative by setu.co to help Bharat build great fintech products. We organise and publish user research, insights, and frameworks for fintech in India. Please follow us on medium for more exciting stories and insights on Bharat.
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