The Indian e-commerce market will soon have a valuation of US$100 billion by 2022. And in heralding this massive growth is dropshipping. Baapstore is a Chennai based startup founded by Karthic Gurnani. It is India’s first and dedicated dropshipping service provider and Karthic believes that today’s sellers need no stocks to start and run their retail business.
In a conversation with Thought Habitat, Karthic Gurnani is discussing about dropshipping business model, and how Baapstore has a COVID-19 proof business model.
Your tagline says COVID-19 proof business model. Can you explain a little deeper on that?
The last decade coupled with technological advancements, and covid19 in particular, has put many businesses and jobs out of context. As the world is changing rapidly, it is inevitable that technology will penetrate each sector and change it drastically which would result in massive job losses and close down of many businesses that do not update themselves according to the modern world.
If you look just 5-6 years back, you had to book a cab by calls only, and there used to be thousands of telecallers just to take bookings, now all those jobs are crushed by just a couple of young apps.
Dropshipping business model, just like Amazon FBA or SaaS, is one of the most advanced and futuristic business models that rules the eCommerce world. Dropshipping model survives all kinds of challenges and grows faster even in tougher times. When multiple lockdowns were enforced all across the world,
Dropshipping business was growing at more than 2x rate. It’s because the model itself is robust and very relevant to the current times. Today nobody is required to take all the risks on their own as people are accustomed to shared services. Businesses are unbundled into multiple services.
The server is taken care of by a separate company, security solutions are handled by another company, and deliveries are handled by a different company. One would not have the bandwidth to have all the services in-house. In such times- inventory, which is the biggest yet not talked about challenge, is the number one obstacle for many people to not start their own commerce business.
Dropshipping business model absolutely nullified this entry barrier and made sure that anybody can start their business at a very low investment. For instance, with Baapstore, one can start their full-fledged eCommerce business with stocks worth 15 crore rupees, for mere few thousand rupees. As online businesses are already growing fast, pandemics like COVID-19 will only push the growth of online businesses even further.
When it comes to dropshipping, people say inventory issues are inevitable. So how different is Baapstore in handling this?
Just like any other business, if you have a tie-up with a vendor who may not be the right fit for you, you will face inventory issues. You can ignore those mistakes by validating the vendor you are working out with.
At Baapstore, we have embraced technology wherever it is required to make sure that our dropshipping sellers do not miss out on sales because of inventory issues. The dropshipping stores we build for our resellers are directly connected with our inventory base which will automatically update all the connected dropship stores with the real-time stock sync.
Not just that, we both procure and aggregate inventory to make sure that our sellers tick all the factors that matter i.e., pricing, quality, and quantity. To make it possible, we vet every vendor very carefully before onboarding them. There are various criteria they need to fulfill before being onboarded with us. Thus technology and our tough vendor evaluation policy ensure that our sellers do not face any kind of inventory issues.
With multiple suppliers, shipping cost is said to increase with dropshipping. How does Baapstore ensure the same is well maintained?
We have hundreds of warehouses across India catering to our sellers with vast products. But that does not actually increase the cost, if at all it does anything, it increases the sales for our dropship sellers. Shipping cost is just an associated expense and it’s inevitable in eCommerce business where you move a physical product from point A to point B.
To make sure that our sellers get the best shipping costs:
- We are tied up with the shipping leaders like Delhivery, FedEX, Ecom Express, Shadowfax, XpressBees, and 50+ other courier services.
- We have an inbuilt shipping engine that automatically chooses the logistics company for every order based on various factors like costs, previous pickup quality, previous delivery quality, shipping timeframe, etc., there would be million permutations and combinations that happen in a fraction of a second for every order and the system will dynamically assign the best logistics partner for every order based on all those factors.
We also provide free shipping credits worth up to Rs.12,500 for our sellers to kickstart their sales.
We hear custom made products and dropshipping never go hand in hand. What are your thoughts on that?
That could be because of the timeframe it takes to customize the product accordingly. There are scenarios like where a custom T-shirt printing may take up to 3 days just to ship the order based on various external factors. This happens in any customization business.
However, at Baapstore, one of the factors we use to vet vendors is based on the dispatch timeframe. We do not work with vendors who take more than 24-48hrs to ship an order. Every order is a serious business and we mostly deliver orders in 4-6 days.
Can we call dropshipping an impending revolution and Baapstore as the torchbearer of it?
We are very much a grounded startup. We do not see the business as a short-term project, we are looking at it for a very long term. There are almost 2 million inventory-led suppliers registered on Indian marketplaces and there are nearly 10 million online resellers working on a dropship model.
As the reselling business is already popular in India, we are working on becoming the ‘Shopify for Inventory’ platform. If you decide on opening an eCommerce store, your first choice is ‘Shopify’. Likewise, Baapstore will become the first choice for inventory. So yes, dropshipping is the ultimate model which will be adopted by a majority of the sellers and Baapstore will be in the middle of it with a significant pie.
With all these attributes, Baapstore is surely heralding the next big boom in the e-commerce segment. This concept might impact the entire world as all countries are facing an import export surge and a bottleneck in last mile delivery.
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