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It pays to sell virtually

It pays to sell virtually
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First Published: Thu, Dec 30 2010. 09 00 PM IST

Going beyond stores: Dharmendra Bapna (in white shirt) at his distribution office in Bangalore. Hemant Mishra/Mint
Going beyond stores: Dharmendra Bapna (in white shirt) at his distribution office in Bangalore. Hemant Mishra/Mint
Updated: Thu, Dec 30 2010. 09 00 PM IST
Technology is one attribute that managed to hop effectively over the Bapna family’s generation gap.
In 2001, Dharmendra Bapna had dumped his electronics business to sell what everyone wanted to buy—cellphones. At the time, calling rates were just beginning to become cheaper. The new venture had taken its first steps when Bapna’s son told his father to experiment further with another technology, by vending online.
Bapna, a shopowner from Indore now aged 48, didn’t spend months thinking about the decision, he just went for it. Today, Bapna sits in his second store, on the busy Cunningham Road in Bangalore, where his 21-year-old son studies engineering—and he’s happy that he took two right calls at around the same time.
Bapna is one of around 12,800 sellers whose primary or secondary source of income comes from eBay. These are people who deal daily with trust, faith, bargains and feedback to add those extra zeroes to their incomes—additions that would have otherwise taken much more work. Indeed, Bapna says his income has gone from Rs 10 lakh a year to Rs 10 lakh a month in the space of only a few years.
Going beyond stores: Dharmendra Bapna (in white shirt) at his distribution office in Bangalore. Hemant Mishra/Mint
Cellphones may still be the most predictable sort of product to be sold on eBay—although inexplicably British Indian coins are also hugely popular. But as Kashyap Vadapalli, director of category management at eBay India, says, many urban consumers are also buying ethnic wear, furnishings, home décor and handicraft from artisans in smaller towns.
“Whether it’s (the case of) glassware from Moradabad or furniture from Jodhpur or sandals from Kanpur, smaller and mid-size towns are traditionally centred around arts and crafts,” says Vadapalli.
Tafseer Ahmed, for instance, manages Rana Overseas in Moradabad, and until recently he would conduct only wholesale sales of wooden and metal handicraft and decorative wall clocks, because retail just did not fit into his scheme of things.
“We would have had to move somewhere else to open a shop,” he says. “I was just not in the mood to do that.” About five years ago, though, Ahmed did start selling 20 products online, and he now has an online inventory of over 400 products. Although he declines to give a specific number for his sales volumes, he does proclaim himself fully satisfied with his steady eight-hour workdays, assisted only in some part by his wife.
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Small-town businessmen have thus discovered a world beyond their own stores, on a 14-inch screen. This explains why towns such as Ghaziabad, Puducherry, Indore, Dehradun, Faridabad and Meerut figure among the top 20 cities in online trading in India. In the annual eBay census, the number of towns trading online numbered 640 in 2008; a year later, that number touched 2,471, and Vadapalli expects an “explosion” in this year’s results, up to perhaps 4,000-5,000.
Entrepreneurs have found, as Ahmed points out, that it requires far less investment to trade online than to buy a store and staff it with customer service agents. What an online venture does need is good products and the ability to listen patiently to customers, who will call to ask why a particular phone comes only in black, as it clearly says online, and not in white.
Unlike in the West, buying or selling online here is not yet entirely impersonal. The touchy-feely Indian buyer may have taken a leap of faith by buying via a blinking screen icon, but sellers still interact a lot with buyers who unfailingly have questions.
Vadapalli recalls a seller of laptops and technology systems who was called by a buyer who didn’t know how to set up his new purchase. The seller had to spend an hour on the phone, dispensing step-by-step instructions so his customer could set up his system.
“Normally, people are nervous,” says Navneet Maheshwari, who also sells cellphones out of his home in Kanpur. “They are suspicious and will not buy unless completely satisfied. Every customer calls.”
Maheshwari’s business has grown by 20% since he started trading on eBay, a natural progression for someone who was once hooked on to Baazi.com in another era. Maheshwari used to be a frequent buyer until he decided to try on the other shoe and become a seller.
With encouragement from his friends, who were wholesale traders, he got good prices on what he sold: phones costing not less than Rs 15,000. At 26, Maheshwari is now a veteran of the online marketplace, having started out as a teenager; what was initially a “side business” now brings in sales of Rs 7-8 lakh a month.
Manish Mankotia had a different challenge—of expanding on an existing business. Mankotia, the director of Radical Instruments in Ambala, Haryana, which manufactures microscopes and other laboratory equipment, diverted two of his otherwise unproductive employees towards the Internet.
After an initial lull, Mankotia, who had never particularly bothered with e-commerce, realized that American customers were buying, from Chinese vendors, three or four times his own sales volumes. “We were never in touch with end customers, only with dealers,” says Mankotia.
Thus, four years ago, Mankotia started actively selling on eBay, and although the prices of his products range from Rs 400 to Rs 1 crore, he finds online sales ideal for lower-value products. Initially, mistrustful buyers would personally show up at his shop to ascertain whether he was genuine. His online business, from an initial 0.5%, now accounts for 3-4% of his total volumes; Rs 2 crore, out of Rs 25-30 crore worth of sales every year, come off eBay. What had started almost as a hobby is now serious business.
“I don’t need salespeople, or recovery people who will make calls every day,” Bapna says. “My margins are bigger.” His business is now “automatically” growing. For Maheshwari, too, life is good: In a realization of perhaps every entrepreneur’s dream, and unlike during his days of wholesale trading, there is now no udhaar (credit), only nakad (cash).
arun.j@livemint.com
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First Published: Thu, Dec 30 2010. 09 00 PM IST