To opt for online sales or stick to traditional sales? – That’s the million dollar question on the mind of many component distributors for a while now. Both of these business models come with their own set of pros and cons. Gulabchand Hariya, owner of Cirkit Electro Components Pvt Ltd shares his views on this highly debated topic. Excerpt follows…
Q. What is the unique thing about your company that is beneficial for your customers to do business with you?
Our company was established in 1990 and we have customers who trust us. We have our own reputation for big manufacturers of inverters, UPS, power supply and LED lighting. For IoT also, the customer depends on the originality and looks out for authorised agents. Currently, we are the authorised component distributor for 24 companies at present. Regarding SMD components, our sister company, SMD Electro Components has around 14 agencies.
We have only those customers who can trust us. So it is a win-win situation for both of us. All the big customers come to us who want to manufacture quality products. We don’t cater to companies that manufacture cheap products.
Q. What’s your strategy w.r.t. keeping ready stock of in-demand products for your customers?
People in India call us “the Indian Digikey” because they know that we stock a wide range of components. They can stay are assured to receive their material in a timely and proper manner when purchasing from us. Also, there are big companies to whom we supply components according to the schedule that they provide us. We have a good stock of regular items as we have a system in which we know how much the demand for a particular component has been in a year. We carry around 6 to 10 per cent of our stock for inventory i.e, around INR 50 million – 100 million.
Q. Do you cater to startups also?
Yes, we do cater to startups provided they match our minimum order quantity. We support them so that in future they can go into production for big quantities. They can also buy in small quantities from us for R&D requirements.
Q. What’s your strategy w.r.t. providing samples to customers who may want to try them out in their designs? How do you enable the same?
We sometimes provide free samples of those companies who assign us as their agents. At times, somebody may be using products from a particular brand. We give our samples to them so that they can compare whether the quality of our product is better than what they were earlier using.
Q. Do you have a team to help customers in designing their products? If yes, what role does this team play in building relationships with customers?
Yes. We have different teams to help customers in designing their products. Our team follows up with our customers for the components that they need for their prototypes and helps them in the import or supply of components.
“With the help of our logistics partner, we can also provide same day delivery to our customers’
Q. How do you see the role of online sales affecting components distribution business?
I believe online sales is not a big problem as the online business is not that big in India. For electronics, online business is not so easy as these components get upgraded day-by-day. Moreover, there is a huge price difference of components between online and offline sales. Traditional sales are important as one also has to be in touch with the customer and understand their difficulty and educate them about new products, which is not possible to execute through online platforms.
Q. Have you started tapping this segment too?
We will have some of our services online. There will be a system with online chat and other things on which our technical team will work with our sales team. Through online chats, we can help buyers select between product brands and take an informed purchase decision. Sometimes many suppliers discontinue their products. Customers can be informed about such updates and recommended alternatives they may go for. Some other add on features will also be added.
Q. Are you taking orders online also?
Right now, no. But we will in coming time. However, we have our product catalog available online. Customers can check it out on our website.
Q. What are the top 3 qualities that you would advise your customers to choose the right component partners?
I would advise that a customer should always buy from a reputed distributor only who deals in 100 per cent original and branded components. Most importantly it should be an authorised agent. That person should not be a small dealer who buys from someone else and sells it off to the customer. Also, the customer should not always look for cheap pricing as that can lead to a trap going forward.
Q. In which all cities do you have offices? How do you cater to/service customers who are located outside the cities your offices are in?
Apart from Mumbai, we also have offices in Pune and Hyderabad as there are a lot of industries based around these cities. Our customers are spread across pan India. We have partnerships with logistics and courier companies to deliver goods to the customers all over the country. With the help of our logistics partner, we can also provide same day delivery to our customers. However, it depends on the products and quantity.
Traditional sales are important as one also has to be in touch with the customer and understand their difficulty and educate them about new products, which is not possible to execute through online platforms
Q. How has been the growth of your organisation in the last 2 years? And, how do you see it for this financial year?
Last year, we witnessed around 50 percent growth in our business. In the current year, the business is a little bit slow due to the general elections. As elections are now over, we are expecting that business would pick up soon. We are expecting more than 20 per cent growth this year also.
Q. What’s your leadership style? What’re the best management practices that you’ve adopted?
I have been in the business for a long time now. As I was working in the electronics domain since the start of my career, I have gained a lot of experience and understand the nitty-gritty of the business. Therefore, our major focus is on customer service excellence. We believe that the employees are our most valuable asset who always delight the customers with excellent service. So we appreciate the hard work and cultivate honesty and trust in our organisation.
Q. Any major initiatives taken in the last financial year that you’d like to share with our audience?
Last year we have expanded our warehouse facilities by 10,220 sq feet. This helped us to increase our inventory and to keep ready the products to meet the demands of our customers in no time.
Q. What are your key focus areas for the next financial year?
Our focus is on intruding new products in our portfolio. In addition, we are focussing on increasing IoT enabled products.