While majority of the component distributor sees the benefit in shifting to online sales, there are still players who prefer to stick to the traditional method of doing business. G S Sharma, director of Shri Ram Marketing, explains to Baishakhi Dutta of the Electronicsforu.com Network why he finds offline sales to be a more lucrative sales pitch rather than joining the bandwagon of the digital world. Excerpt follows…
Q) What’s unique about your organisation that’s beneficial for customers to do business with you?
To begin with, every business is based on three factors: quality of service, availability of varied products and affordable cost. Our customers usually demand a ready availability of components in order to meet their immediate requirements. So, keeping enough supply of such products is important for us to provide a good quality of service.
We generally keep similar components that have been manufactured by different, but leading organisations. We currently have products of more than 30 companies. This provides our customers with a variety of products to choose from according to their needs. Also, different components are provided to our customers at a price that is the same as the import price of that product (in Indian Rupees). So these are our USPs as our work is closely based on the above three factors.
Q) Do you also supply to startups, especially those who do not have a particular MOQ?
For startups, we don’t put any condition of MOQ. We generally provide the components/samples as per their requirements so that they can build their prototype products. Once such companies go for mass production and come into commercial use, then we put our MOQ on them.
Q) So for an established organisation it’s the MOQ and not SPQ?
No. Some of the international companies do not have fixed criteria when it comes to quantity. They will also supply a single component piece as per the customer’s requirement. But, its cost will be 50 times higher than the original price. However, we don’t follow such practices.
Q) What’s your strategy with regards to providing samples to customers who may just want to try them out in their design?
It depends upon our customers, existing as well as new ones. As and when we get demands for the requirement of a particular component, we send that immediately if it is available. If it is not available, then we get it made available from the factory and then supply them.
Q) What are the top three qualities that you would advise to customers while choosing the right distributor?
Reliability in terms of availability of a component, correct method for publicity by reaching out to relevant people and fast methods for supplying good quality products at a competitive price – these three factors are the most important ones in choosing the right partner.
Q) Is online distribution responsible for component prices to go up multiple times?
Yes, undoubtedly online sales lead to a massive change in component prices. Several e-commerce companies generally have most of the components in their inventory. Based on the number of components that are selected, the exact price is given to the customer. However, the costs of various services such as transportation and handling are also added to the final price, which makes the price go up from its previous price.
Q) Are you aiming to step into the online distribution service?
No. The reason for this is because our model of business is different. We basically sell our products directly to the customer. Currently, we have huge demands in large quantities hence going online is not required for us. E-commerce is a part of retailing which does not suit our business model.
Q) With the rise of online sales, don’t you think that certain customers are being missed out by just sticking to traditional sales?
No. We operate at minimum costs and as I mentioned earlier, we already get demands for large volumes. Yes, in this process, we might be losing some potential customers. But as of today, we are quite satisfied with our business model. In India, it is hard to find any company or trader who is involved in traditional sales. Thus, only the large buyers come to us and this gives us an advantage in doing business in this sector.
Q) In which all cities do you have your offices?
We have offices in New Delhi only. In order to reach out to all India customers, we have agents who do the marketing on our behalf.
Q) How has your organisation growth been for the past two years and how do you foresee it for the next financial year?
During demonetization and GST, our business had a setback. But, in the last financial year, we had done extremely well, i.e, a growth of around 30 per cent and in the years to come, it will become even better.