EP 8 of 40 - Business Mastery Series | By Sandeep Maheshwari | Hindi

Summary

The speaker discusses the challenges of running an e-commerce business, focusing on product returns and customer satisfaction. They share their experience with reducing return rates from 30% to 10% and the impact on margins. The conversation emphasizes the importance of good reviews for business growth and suggests strategies to increase positive feedback without incurring losses. The speaker also highlights the need to understand and manage 'approachability cost' and the transient nature of business success on marketplaces.

Takeaways

• 😀 The speaker is running a business with a partner that sells a product called 'Ajan'.
• 🚀 The business faces difficulties, especially with e-commerce returns, which is a common challenge for new businesses.
• 🔄 The speaker mentions that returns can sometimes be due to reasons beyond product quality, such as customers not liking the product after opening it.
• 📦 The product being discussed is a photo frame, which is sold with a 30% return rate, but efforts have been made to reduce this to 10%.
• 💰 The business is currently focusing on capturing the market rather than maximizing profit margins, which is a strategic decision to increase sales volume.
• 📈 The speaker acknowledges the importance of managing returns and freight costs, which can impact the overall margin of the business.
• 🤔 There is a discussion about the importance of reviews and ratings for the success of the business on the marketplace platform.
• 📉 The speaker points out that focusing too much on reducing returns might be misplaced, and instead, the focus should be on increasing positive reviews.
• 🛒 The business model is criticized for not being viable with the current cost structure and pricing strategy.
• 🔍 The speaker emphasizes the need for a clear understanding of the business costs, including the opportunity cost of time and resources invested.
• 🎯 The overall message is that the business should prioritize gaining positive reviews and market presence over immediate profit to ensure long-term success.

Q & A

What is the main issue the speaker is facing with their business?

The speaker is dealing with difficulties related to returns and customer satisfaction in their e-commerce business, especially with a product called 'Ajan'.

What is the current return rate for the speaker's product?

The speaker mentions that they have reduced the return rate from 30% to 10%, but they still face challenges with returns.

What steps have been taken to reduce the return rate?

The speaker has taken steps to minimize returns by providing detailed specifications and clear communication about the product size and details to customers.

What is the speaker's strategy to increase sales and market presence?

The speaker is focusing on gradually increasing the price and capturing the market by emphasizing the importance of good reviews and minimizing returns.

What is the speaker's approach to handling customer complaints about product size?

The speaker explains that they provide detailed product specifications to customers to manage expectations and reduce complaints about the product size.

How does the speaker plan to manage the cost of returns?

The speaker is considering the cost of returns as part of their business model and is trying to minimize it without affecting the overall customer experience.

What is the speaker's view on the importance of reviews for their business?

The speaker believes that good reviews are crucial for the success of their business and are focusing on getting positive reviews to improve visibility and sales.

What is the speaker's advice on pricing strategy for the product?

The speaker suggests that the selling price should be four to five times the cost of the product to ensure a good margin, considering all factors including returns.

How does the speaker address the issue of returns affecting the business margin?

The speaker acknowledges that returns do affect margins but emphasizes that the focus should be on getting good reviews and managing the cost effectively.

What is the speaker's perspective on the business establishment and stability?

The speaker mentions that a business is never truly established and stability is relative, suggesting that one must always adapt to changes in the market and algorithms.

What advice does the speaker give regarding the focus areas for the business at its current stage?

The speaker advises focusing on getting good reviews and not worrying too much about returns or sales at this stage, as reviews are key to increasing visibility and sales in the long run.