How To Build a Reselling Platform in India
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Almost every person thinks of bidding adieu to unused goods lying at home. Similarly, many aspire to buy costly commodities at reduced costs by purchasing it second hand. It is clear that there is a great potential for the re-commerce market in India and yet, we do not seem to be succeeding in this industry in comparison to other countries.
We need to analyze the problem areas and ask ourselves what we can do to build a successful re-selling platform. From breaking the common misconceptions about pre-owned goods to providing end-to-end logistics, there are many steps that can be taken. Appended are few pre-requisites that can help you create a successful one.
Firstly, there is a need to address the lack of trust between buyer, seller and platforms. Technology enabled re-selling platforms, to a large extent, are creating their own market. Be it cars, mobile phones, furniture, appliances or fashion, the market has either been completely “dealer” driven or non-existent. We’ve been trained to be very skeptical about all “pre-owned” purchases, especially when done through an unknown agent. Most of the younger “used goods” platforms like Truebil, Elanic etc., are solving this issue by providing value added services to ensure that the buyer trusts the platform, if not the individual seller.
Logistics play a crucial role in the functioning of a re-commerce platform. Pickups from consumers aren’t straightforward, be it a sofa or a pair of shoes that needs to be picked up. While logistics, especially forward logistics, has improved leaps in the last few years, pickups or reverse logistics is still a challenge. Companies need to figure out the exact fit for logistics, be it the hyper-local bike service providers such as Shadowfax or the intra-city mini truck providers such as LetsTransport. In case you require specific attention to packaging, do work with the logistics providers extensively before finalizing a transactional model. The good news is that there has been a definite upward trend in reverse logistics service with providers now offering custom features for clients. We can thank the eCommerce companies and their marketing campaigns around “simple returns” for this.
Thirdly, there is a need to create a competitive niche. This advice isn’t specific to reselling platforms but rather most businesses. In case of reselling platforms, every consumer is going benchmark your company against the classifieds - Olx, Quikr. These are two extremely well-funded, super competitive giants in the space. It becomes important to create a niche where you aren’t directly competing with them for customers. The competitive niche can be achieved by solving the above two problems. GoZefo, for instance, purchases furniture upfront from the seller creating a unique value proposition over the classifieds.
Lastly, focus on liquidity. This essentially means that the person selling is able to sell the item quickly. A reselling platform at the end of the day is only as good as its ability to sell a product. Liquidity is, by far, the most important aspect for seller loyalty. Look at specific ways to increase liquidity on your platform, especially in the early days. One of the ways is to limit the platform to a very small, high density geographical region (like a college). Another way is to narrow your catalogue to only a few high demand products. Since the classifieds spend a ton of money in advertisements to create market liquidity, a measurement of your platform’s sell through rate or time to sell is also an ideal method to check for POC.
The used goods market in India is estimated to be Rs.1,15,000Cr and growing rapidly. A large part of this market is going to be disrupted by companies leveraging technology to offer more efficient solutions. The market opportunity is huge, so with a little focus and a lot of hard work, you may be able to create the next eBay, or rather a better version of it.