Window-shopping is fun. You get to see and try out all the glitzy stuff, click the odd selfie, and come back home without shelling a dime. The sneaky ones check the price tags, open a shopping app, compare prices, and buy online. App – 1, Retailer – 0. In an increasingly disruptive world, pure brick-and-mortar retailers are facing a dilemma — how do you bring customers back to shops?
That’s where Inroadz comes into the picture. Abhishek Singhal, a techie from Noida and an MBA-grad from IE, Spain realised how fragmented Indian distribution channels were while working as a consultant for a French medical equipment manufacturer that wanted to foray into India. “You put a product up on FirstCry and Amazon, and start selling, but offline is a challenge. That's because you need to work with numerous brands, and then the distributors, who also add mark-ups in between,” says Singhal.
Hence, it was in late 2017 that he decided to invest about Rs 6 million and start Inroadz — the app that became operational in February 2018. So, how does Inroadz solve this inherent problem with our distribution channels? First, by eliminating the distributor from the picture. And then, bringing retailers and brands on the same platform. The brand lists its products on the app and pays a monthly subscription to the tune of Rs 50,000. While the monthly subscription may sound high for a budding brand, it allows it to piggyback on Inroadz’ in-house sales team, eliminating the need for it to hire its own team. Meanwhile, a retailer can view the products on the app and place a stock order as per requirement. From this party, Inroadz makes between 5-12% cut on the value of the order.
“On an average, a retailer earns 7-8% more margin on our platform because we don’t have distributors,” says Singhal. In fact, the company claims that it passes on as much of mark-up to the retailer as possible. “If a customer says that the product is cheaper on Amazon, the retailer has the cushion to compensate for the price-gap,” he explains.
But how did Singhal cut down the middle-men? “We work with logistics companies such as Gati to get the product shipped,” Singhal says. The team of 12 managed a business of GMV Rs 5 million in July, and Rs 6 million in August. Barely a year-and-a-half into business, Singhal claims to have operationally broken even, and growing at a steady 20-30% monthly. “We've begun stocking products that are in high demand. We have a small warehouse in Noida, and plan on getting into a bigger warehouse to maintain stock of products,” he says. To do so, while expediting expansion, Singhal aims to raise $1 million.
Besides allowing retailers to bag higher margin, Singhal wants to help new brands hit the street. For instance, Singhal explains that 90% of sales for big toy brands such as Mattel comes from retail stores, but newer brands find it hard to reach retailers. “They sell well online, but their offline revenue is a under 10% of total business. So, we tell them that we'll take care of their off-line channel by deploying our sales team to reach retailers,” Singhal says.
He currently has over 700 retailers spread across Mumbai, NCR, Patna, Lucknow, Kolkata and Bengaluru. The app hosts products of over 70 brands which include Mattel, FunSkool, Sequoia-backed Skillmatics, and baby-care brands such as Mama Earth. The start-up also recently graduated from Axilor’s 100-day incubator programme and if such ventures help real stores match the aggressive prices online, who knows, the score-board may look a little different again: App – 1; Retailer – 1.