1 min read.Updated: 31 Jul 2019, 11:21 PM ISTAbhishek Bansal
Learning from the growth stories of other e-commerce firms and the challenges they faced, we concluded that generating profit on each transaction, however minuscule, was the sustainable way forward, says Bansal
Abhishek Bansal, chief executive, Shadowfax
As a fresh IIT graduate on a stint at a large global retailer for an organizational restructuring assignment, I first became cognizant of the pain points in the last-mile-delivery segment in logistics. When we founded Shadowfax in 2015, we wanted to capitalize on the demand for these solutions.
While setting up the venture, we faced a crucial decision—whether to rapidly build capacities in pursuit of high growth with a lot of cash burn, or to focus on the unit economics of each transaction. Learning from the growth stories of other e-commerce firms and the challenges they faced, we concluded that generating profit on each transaction, however minuscule, was the sustainable way forward. Adoption of the unit economics model for Shadowfax was our first click moment.
This go-to guideline formed the backbone of all our crucial business decisions—the nature of contracts and agreements we signed with the clients, ways in which we attracted our riders and their payouts, the geographies we expanded to—everything from the where, when and the intensity of expansions, and other capacity building activities.
The unit economics model dictated that we do not lose money on any order we deliver; the outcome being that we remained in the green on every single delivery, or the losses were minimal. Shadowfax has been courting sustainable growth from its early days and the firm’s survival was never at risk.
Our other click moment was when Shadowfax decided to leverage the crowd power and create a million micro-entrepreneurs in five years. With this decision, we were also able to garner trust of investors and grow exponentially across the nation. As a result, today, we are one of the most sustainable third-party logistics (3PL) firms in the market.