Monday, April 14, 2014


Its Bihu time here. Wishing everyone a Happy Harvest season. May the music and food be great wherever you are

Friday, March 21, 2014

Conversion Optimization

I am not an expert and havent done split A/B testing and have had limited success but have tried a few things which seem to work for me :

1) Added a trust mark : This can be something a SSL Seal or a guarantee.

2) Highlighted the call to action button - Orange seems to work well as a color. Also de-highlighted other buttons like Add to Wishlist so that the main call to action stands out.

3) Remove extra information from the Conversion page - Minimize possible actions. Earlier I had Facebook buttons, pinterest, twitter etc - now I have just three - Buy (Main Conversion button), Add to Wishlist (De-highlighted but just in case you want to come back later), Facebook like. The sizes and colors are in that priority

4) Speed - Did some tweaking suggested by Google for making the page faster(lot to do still). The assumption is that faster pages convert better.

5) Conversion steps : Reduced conversion steps from 8 to 5. Made Guest checkout the default option(We are a niche site so dont expect a lot of repeat find something and buy)

Do let me know if you know of some low cost ideas to improve Conversion

Sunday, February 23, 2014

Online Market Places

We are a small handicrafts manufacturing company and we primarily sell online. A good part of our sales come through our own website - but we soon realised that as a brand, looking at your website alone is sometime not the best strategy. This is basically because of the following :

1) Costs : Setting up an online store is not very difficult nowadays. However getting good traffic is indeed a continuous and difficult task. This is where marketing comes in and whichever channel you choose be it Google ads or Facebook, cost of marketing is significant. Apart from that there are other transaction costs like Payment Gateway costs that are significantly high at small scale.

2) Brand : Each brand is unique and people connect to it in different ways and even though customers may love your brand, many are more accustomed to online purchases through the very large established online players like Amazon - this is due to a lot of different reasons from trust to customer service to purchase guarantees to robust feedback mechanisms.

Because of the above, we made a conscious decision to make our products available in well known marketplaces like and

Some of the great advantages of the market place model are :

- If you got a great product, you just need to list it. There is no additional expenditure for marketing and commissions are paid only when a product is sold. This frees up marketing expenses that can be put back in the business for expansion.

- Good marketplaces reward you for good performance. This means if you ship on time and customers are happy with the product, you get good reviews, your products get better rank and this converts into better sales.

- Marketplaces have great followup mechanisms and analytics tools that can give you excellent insight into what your customers are looking for.

- The commissions that are charged are usually in line with the industry one operates in.

The only model that works for us in the marketplace model right now are ones that just connect the buyer with us for a reasonable commission - the ones that take care of the logistics or ask us to ship to them or ask for very high commissions don't work because the Indian Ecommerce market is a value market - where the customer has to be happy, the vendors have to be sustainable and inefficiencies have to be minimised. Thats all for today. Thanks for reading. 

Saturday, January 18, 2014

Pricing Strategies

One of the finer things in our business is to decide on the price of a product. Since we manufacture our own products, there are various costs that one incurs in a product. Following are some of the key ones :

1) Labour Costs : Our products for the most part are handmade and we at KraftInn have artisans as employees who come from remote villages. Apart from monthly salaries, we also provide housing and food to our employees - which helps the artisans to send money home to sustain their families. Bamboo craft is an extremely skill intensive craft and finding the right artisan and retaining is one of our key goals.

2) Logistics Costs : Since we primarily sell online, one important aspect is the logistics costs that we incur - this includes packaging material and payments we make to our Courier partners and India Post.

3) Marketing Costs : Any business that seeks to sell products to its customers incurs marketing costs. In our case, these are related to branding and advertisements that we do to help take our products to customers

4) Operational Costs : These include costs related to production of items, rent, electricity, treatment, machines etc

5) Raw Material Costs : The raw material, which is primarily Bamboo and Water Hyacinth, in our case.

6) Commissions : Third party commissions, payment gateway transaction cost etc.

So the conventional wisdom for deriving the price of a product is to add a weighted average of the above to come with a price that leaves room for a minimum profit. This was our very first strategy when we started out but slowly we realised that it really does not matter if our costs are high or low for  particular product but what is more important is if the customer finds value in our product. That is when we thought of what we call a minimum viable price. The idea is the following :

Value : Customers like to pay for the value they get. So, regardless of whether a product is big or small and incurs X cost for labour and Y cost, the customer should feel that there is enough value for what he or she pays. We get extensive feedback through channels like our Ebay page and have derived some insight into what is the right price at which customers see value. After that price is discovered, we slowly tune the cost parameters - example the size of product to make it viable. A good example is our set of laundry baskets - Putting two laundry baskets of slightly different sizes makes it possible for us to package it together in such a way that we save on logistics cost and pass the value to our customer.

Discounts : A friend of ours said in jest that she would buy the same product at Rs 250 with 50 percent discount rather than at Rs 100 because that is how strong the perception of discounts is in India. We however thought it wise to have a minimum viable price rather than pricing it higher and then offering discounts. This also helps us to keep our price uniform across all our channels be it our website or Ebay and KraftInn.

Economy of Scale : As a business grows, it is able to bring in more and more productivity and efficiency and this helps to bring down costs. As a small business, we know that over time, we will be able to optimise better on our costs. But, this does not mean that we need to pass all our costs to our customers. At this moment, we are looking at minimum viable price from a customer stand point and the idea is to focus on growth where over a period of time, the economies of scale will enable us to put the financial model that will help us sustain a large number of artisans while keeping the minimum viable price attractive for our customers.

    That's all for today. Thanks for reading.

Thursday, January 2, 2014

Artisans at Work

KraftInn Artisans at Work

We use Bamboo Nails only

The Green India Lamp

Different type of Bamboo is used for different parts of the lamp

Sheets are immaculately glued together

Its a bit cold and the sun sets early 

Monday, December 23, 2013

The Perfect Ecommerce Customer

We are a very customer oriented company and try to provide the absolute best service possible. Companies that have ECommerce as their primary channel cannot afford not to give their customers the very best service. It is well accepted that Ecommerce can bring great benefits to customers be it discounted or competitive prices, convenience of shopping from home, options like returns and refunds which are usually unavailable in traditional retail or commerce. As a small company with sustainability dependent on timely cash flows, we also have a perfect customer in our mind.

The perfect customer for us exhibits the two traits below :

1)  Responsible : As Customers, many a times after we buy, we tend to think about a few questions after we buy it - do we really need it ? Will it fit my sense of style etc. Since Ecommerce is not touch and feel as traditional retail, it is important to look at product details, the size, shape etc and how it fits ones needs. This can minimize any chance of returns. A return is not a happy outcome for both the customer and the retailer, especially for the retailer, because there are multiple costs related to a product - marketing cost, operational costs, logistic cost, cost of capital etc. An ecommerce transaction is based on mutual trust and shared responsibility between a customer and the retailer. Here's where a responsible customer helps the whole ecosystem to be cost efficient and provide benefits both the customer and retailer.

2) Reasonable : There are multiple parts in processing an order e.g Payment, packaging, labeling, delivery, receipt etc. Though some of the bigger Ecommerce companies can sometimes provide all of this in a single day in some cities, most deliveries require a lead time between 2-5 days. The perfect customer understands this and provides the right information (e.g availability for receipt of goods to Courier person) to facilitate this. She also understands that everyone in every industry be the manufacturing industry or the logistic industry have holidays (e.g Sunday) and is respectful that business is conducted on business days. As a owner of a business that employs bottom of the pyramid artisans and painters, I consider it extremely important that my employees have reasonable work timings and work days.

As a company, we focus immensely on not just finding customers for our products but also the perfect customers. Thats why we have had great customers, some of whom have become great friends as well. We get to hear a lot from them, especially via Ebay and Mouthshut.



I know it is kind of difficult and maybe controversial to be picky about your customers but I need to make sure that we run a sustainable business so that I can pay my employees on time and that's the only way. Thank you to all KraftInn customers. You have been perfect. 

Friday, December 6, 2013

Startup Funding India

Startup Funding India

When I decided to become an entrepreneur, I had zero capital - absolute zero, in fact I had quite a few bills to pay - Credit Card Bills, small loans from friends etc. I had already exhausted my limited amount of savings on traveling around a bit and looking for the right ideas. So, I did what most people would do - I reached out to friends and family and got the very initial funds to kick start my business. The place I would start my business at,  had to have the absolute minimum cost for me in terms of personal expenses - what better than staying with Dad and Mom and So, I started at my home town in Assam.

India is a land of entrepreneurs if you look at the countless number of small businesses - the neighbourhood grocery stores and the thelas, but for reasons perhaps related to western influences or maybe demographic, the word 'startup' is often spoken in conjunction to a few select businesses - these are usually related to Electronic commerce, tech products, education and somewhat lately, with sectors like healthcare. Traditional Manufacturing and Services companies typically don't come to mind when you talk of startups. This being the case with KraftInn - because we started out basically with the idea of making ecofriendly home decor items that we could hopefully sell to the bigger retailers in bulk made us somewhat of an business rather than a startup. However, a year later, when we decided that we would primarily focus on selling online - we also started getting some attention as a small ECommence brand. This is when we figured out that it may not be such a bad idea to try approach for some angel or institutional funding. I reached out to a few angels and venture capitalists. I really had no idea how much money I exactly wanted but then, I gave it a shot and managed to meet a few.

Here are a few things that I found out (experienced) :

There are various types of investors available, two of the important ones include :

a) Angel Investors - They usually invest at an early stage and provide seed capital and usually is a high net worth individual or a group of them. They seem to invest primarily based on the strength of the business idea or the pedigree of the team

b) Venture Capitalists -  They usually manage a fund which is pretty big (hundreds of millions) and invest in somewhat mature businesses (compared to angels - maybe some initial success story or prototype)

There are numerous other ways to get funded, but usually that is based on debt or more attuned to established businesses. Funding from Angel investors and VCs make a lot of sense because they are equity based instruments.

Based on my interactions, I have noticed a few things :

1) Team/Pedigree - This is something that matters a lot. Different people have different methods to gauge this - but good degrees from Ivy league colleges seem to help, previous startup experience seem to help, family background etc.

2) Scale - At this moment, In India, investors dont seem to care much about profits - a lot of the conversation usually is around revenue scaling - A business that can show the potential of growing by 500 percent a year in a large market is likely to get funded as opposed to a niche profitable business with more modest growth targets. VCs are probably looking at a business that can scale to 80-100 Million dollars in 4-5 years. This is probably the right thing to do from a investor standpoint because a business that goes from 0 to say 2 Million USD in 4-5 years is still very small from a investor return standpoint

3) Exit - Currently there are two possible exits for indian startups - first is an acquisition and the second is a IPO. For an angel investor, probably there is a third option - which is offloading stake to a bigger investor. So a business that looks likely to provide more exit options is likely to get funded - hence it is difficult for certain niche businesses like say a technology product company to get easily funded - because the exit is not clear or there isn't much precedence.

4) Market Size - Investors seem to love the idea that the addressable market is big - it is somewhat of a strange argument in itself - because every business can always expand with the right capital and success metrics and address a larger market - I mean a successful tea stall can probably become a restaurant and then a chain or restaurants and potentially the biggest chain of restaurants in the world. However, if at the outset the initial market looks very small, investors seem to lose interest.

From the above funding kind of scenario, our business is not really a favourite for such kind of investment probably at this point - our location is too remote, our business focus is too narrow and our addressable market is somewhat small. Maybe once I reach the first significant economic milestone that I have set for myself, I will give it a wider canvas.

Have you spoken to any investors or got funded ? What has been your experiences ?