FGE 11: What it takes to build a successful ecommerce business… with Sashi Somavarapu, Founder CEO, of RedLily.com

podcast

Sep 09

Sashi Somavarapu

Sashi Somavarapu of RedLily.com

Show Notes:

  • 2012: returrning to India, after 16 years in US
    Launch of RedLily, initially in kids/baby centric category
    finding out niche
    Learning curve : Figuring out right mix of products … high quality and affordability
  • Among top3 sellers on Amazon: during 12-16
    Bagged Amazon.in all rounder award
  • Broadened category mix to entire family
    Badic building blocks of ecommerce…
  • 100% positive feedback on Amazon in last couple of months !!!
    weekly review of feedbacks / operations meetings
  • Break up of sales: marketplaces vs redlily site
    Having multichannel platform technology (another core competency) enables on all marketplaces within minutes
  • Why ecommerce was chosen, as business?
    traditional vs ecommerce in terms of ‘speed, selection, affordability’
  • MIT Program (3-4 months) – start developing products on large scale
    Business plan competition finalists
  • the tipping point, to diversify, joined Amazon
    product returns > liquidator used to pay 30 cents on a dollar, during 2006
    His stint at warehousedeals.com (internal startup)
    Amazon: understand ecommerce marketplaces closely.
    enterprising exposure: over 20 programs launched in 7 years
  • Intitial investments
    initial investment from freinds & family, and supplemental in the form of debt from banks
  • Challenges faced:
    Funding locks your ability to scale fast
    traditionally banks are not coming forward, nor equipped to lending ecommerce firms
    interstate commerce
    last mile connectivity
  • financing, compliances, logistics / ecommerce industry.
  • own logistics partners
  • 30% drop in sales from last Apr’16, across the ecommerce industry
    guiding principle: ‘What makes customer happy’
    Able to do necessary work around…to handle the 30-40% dip
    3 key parameters to make consumers happy
  • personal / Lifestyle changes since moving to India
    Never relied on external help to run businesses!
    what defined his DNA of solving his problems
    building systems: humans + technology
    hiring technology vs humans
  • Ford became Ford becasuse of automation. FordT was people’s car in US.
    Cash positive ecommerce company since inception, not many ecommerce companies can claim that.
  • Cost conciousness is one of the key founding principles
  • How being employed in large companies (Ford, Amazon) helped in understanding business principles !
  • Hiring:
    perfers full stack, rather than specific specialities
    Interns hiring
    process? perfer with people with basics right!
  • Taking advise from mentors!
    whatsapp group with CEOs/entrepreneurs in Hyderabad?
  • How mentorship helped:
    1)Dont let go of your company too early.
    2)Emplotying (lean) team. : people to cober your weekness, not otherwise! That helped keep the runway much longer!
  • Letting go of Marketing for RedLily
    How marketing helps vendor, in marketplace ecommerce scinario?
  • impact of reducing marketing expense on redlily!
    Playing for the long run: spending on brands
  • Reason behind choosing baby category
  • branding for the long run, to attract right partners in future
  • Marketplaces tachnically make everything simple, to ease vendors!
  • About marketFront.in ( a SAS based product) : posting, price competitiveness
    price, inventory updates, ratings …objective of winning the buy box !
    does the work of 3-4 people
    built for redlily, now can be shared with others, already bagged awards, and as well as funding!
  • Opening up marketfront does not amount to helping competition !
    Promotes faster growth of ecommerce!
  • 5 year view for both redlily & marketfront companies!
  • RedLily: with India focus, 1000cr company in next 3years
    200 to 400 brands, in next one year
    How to scale is bigger challenge.
  • marketfront (SAS software) can be adopted anywhere in the world.
    Any retailer can avail of it.
  • Revenues & Margins so far
  • Most Influencial person: Amazon CEO Jeff Bezos
    Frugal mentality, highly scalable ..thought processes etc
  • Hobbies: Reading a lot, specifically technology
    Recommended books: The Goal , Good to Great
  • About CoFounder & Life Partner Rekha Somavarapu, about her role in building business
  • Reg 5 zones pan India
  • Parting advise:
    Focus on right direction
    at least 5 year view is a must;
    Don’t take courses…go & implement
    Question everything.

THANK YOU FOR LISTENING!

Hope you enjoyed the show.

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