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Powering the recommerce economy | Saket Saurav @ Refit Global
235 Plays1 year ago
This episode delves into the world of pre-owned mobile phones with Saket Saurav, founder of Refit Global, a leading player in the space. Discover the remarkable journey of scaling up this startup without external funding, reaching a topline of over 300 crores this year.
For more such interesting founder journeys, subscribe to our newsletter www.founderthesis.com
Read more about Refit Global:-
2.This Delhi- based startup nailing the second hand device market
4.ReFit Global on India’s gadget refurbishment market – Myths, Insights, and more!
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Transcript
Introduction to Pre-owned Market in India
00:00:00
Speaker
Hi, this is Saket Soroh, co-founder and CEO for Refit Global.
00:00:17
Speaker
India is a large market for pre-owned or used products. There are multiple unicorns operating in the space of pre-owned cars, for example. Another large category in the pre-owned space is mobile phones. And in this episode of the founder thesis podcast, we go deeper into this category as your host Akshay Thad talks to the founder of one of the largest players in the pre-owned mobile phones market.
00:00:38
Speaker
Saket Saurav is the founder of Refit Global and he has had a remarkable journey of scaling up the pre-owned phone startup with zero external funding. Refit Global is looking to end this year with a top line of more than 300 crores. They still have headroom to grow massively from there. This episode is a masterclass in business fundamentals and how to build a large business without external funding. Stay tuned for this amazing conversation and subscribe to the Founder Thesis Podcast on any audio streaming app.
Operations of Refit Global
00:01:15
Speaker
Can you just describe what is Refit Global? If you were giving an elevator pitch. So at Refit Global, what we do is we buy exchange devices from online portals and from brands. We get the whole devices to our warehouse. We refurbish the device to the best possible extent. We try to make it as good as new. We have offline presence, which is spread across pan India, and we sell those devices to our offline channel partners. Okay. And how big is the business?
00:01:42
Speaker
So as of now, last year we clocked around 200 CR. Amazing. And what's your target for this year? We are targeting 350 to 375 CR. That is amazing. So let's kind of start with the journey of getting here. Like, you know, you built a business which will soon be a 350 CR business with zero external funding. I would love to hear that story of how you built this. How did the idea come to you?
00:02:10
Speaker
What made you want to become an entrepreneur? Basically, both me and Avneet, old friends, after post-graduations, post-graduation, we started working with Legend Chronics and VideoCom. After corporate exposure of almost 9 plus years, while during our state-wide shop news, we were managing the repubition portfolio, and during our shop news, there only we decided to
00:02:40
Speaker
start this refit and with republish cutting. What made you want to leave LGA and joint shop close? The growth that Project 3 we got was the opportunity what we were getting was fantastic and since you know during that time everything was moving to online thing, e-commerce, there was a boom, the kind of hike in terms of money and in terms of profile and obviously the exposure which you get working with any new setup company which is particularly e-commerce. So to get that exposure in terms of profile as well as in terms of money,
00:03:09
Speaker
We decided to join top news and during our stated top news first, we are given large appliances category. You were like a category manager. Correct. Okay.
00:03:22
Speaker
When we were taking care of large appliances category, obviously a company wanted to start with some new category in which company could make some money.
Entrepreneurial Journey of Saket Sourav
00:03:30
Speaker
So under the new initiative program, they wanted us to start with some category.
00:03:40
Speaker
Appliances because of the cost intensive model, because of the logistics issue. Logistics, installation. The cost intensive model, the price profit banana becomes very difficult.
00:03:58
Speaker
Obviously, we have seen that in the SRA category, we had a lot of research and various market visits. We heard of this repubition industry coming up really well in India. When we did further research, we came to know that republish the U.S. May and other countries, the market is quite big. Then we put this idea to the management agreed and we finally decided to.
Challenges in Inventory Management
00:04:36
Speaker
It was a cash cow for any of the online companies. What was the margin like?
00:04:45
Speaker
Re-fervished. Re-fervished my margin up a bit a level pair of bathroom though there is a though present a bit a level margin. Okay. And gross margin. Gross margin by 5.5 varies from 5.5 to 7.5. Okay. Shopruse was not inventory led model. They were essentially pure marketplace. Yes. They were a pure marketplace to
00:05:05
Speaker
Because of that, only we got that exposure. So, we had a marketplace. We could have used the other platform, which is a shop news platform. Inventory source, we had flip-flops. Our inventory source, shop news, direct inventory source, we had inventory source. That third partner. On behalf of shop news, he used to procure the inventory from flip-flops.
00:05:31
Speaker
You know, whatever inventory you are sourcing on behalf of us, that entire inventory we'll sell it. So the margin, what I'm talking about.
00:05:53
Speaker
Right. And it was just a trading business or was there some value addition being done? No, in shop news, it was just a trading business that we used to carry inventory and we used to sell.
00:06:14
Speaker
We
Building Channel Partnerships
00:06:15
Speaker
used to refurbish the inventory of the refurbished inventory. We used to sell it as a shop lose platform. We used to sell it as a shop lose platform. We used to sell it as a shop lose platform. We used to sell it as a shop lose platform.
00:06:37
Speaker
So the entire thing was, you know, managed. He was moving ahead from Shop Cruise. In that time only, it triggered that since he was moving, we were also very much comfortable with him.
00:06:57
Speaker
Was this during the time after Sandeep quit and there were a lot of senior management exits and all that? Yeah, after that. This was in the year 2017. Okay. Well, the decline had very much started by that time. Yeah, the decline had started. Usi time period is also getting worse. I've been a little nervous about him. He goes to a category where he has an attack, a structure. So when we had a discussion with him, he only
00:07:23
Speaker
If you are building this end-to-end thing for the company, prior experience
Growth Constraints and Future Strategies
00:07:30
Speaker
has also been channel experience. Why don't you start thinking this business on your own? What kind of family do you come from?
00:07:49
Speaker
So, I come from a Caius family. I have a lot of kids who are in the Caius family. 99.99% of them are in the service. So, I have an IES, an IPS, an IT doctor. And your father was also in like a government job or something? Yeah, he was in the bank. He was the chief manager in the lab at the bank. So, I have a family job with a service background family.
00:08:15
Speaker
Right. Obviously, what if we don't succeed? What if we don't succeed?
00:08:26
Speaker
then obviously the comfort factor will be there. If you fail, which I am very confident that you will say through and you guys will do very good, but if you fail, you will have a job. And since you have that channel and sales experience, sales will continue. If you fail, you will have a job.
00:08:46
Speaker
Let's give it a try. Let's give it a try. Let's give it a try.
00:09:02
Speaker
But that was a trigger point for me and Abhinav. We thought that, let's give it a try. To 2017, we started
Competitive Strategies in the Market
00:09:10
Speaker
Reapit. And finally in the year 2000, the company was going to be able to help us. For Reapit also and for the company.
00:09:18
Speaker
So in the year 2018, we got released. We started with 15 lakhs of personal loan. We started with a lot of savings.
00:09:46
Speaker
We will either make or break. Fortunately, we were able to make something and it paid off really well. But obviously, Shurvat made the initial two, three years, three and a half years. It was very challenging for us. We have seen days where we used to travel.
00:10:07
Speaker
We used to take those things, we used to take some of them, and we used to look for them. The challenge industry was not at all very much scattered. You were clear on the online business, you were talking about online business. You didn't want to... The reason being is that you have to be clear on the online business.
00:10:35
Speaker
Marketing can't do it. Working capital limited. But you wouldn't have listed the market placement as a seller. Since we have been part of that, we know that the picture is not that
Expanding into Regional Markets
00:10:50
Speaker
rosy.
00:11:23
Speaker
But actually my company's commission, category commission, return, logistics.
00:11:29
Speaker
I am a partner. Fortunately, I don't want to pay for my investment. I want to pay for my investment. I want to pay for my business. I want to pay for my shoploose. I want to pay for my business. I want to pay for my business. I want to pay for my business. I want to pay for my business. I want to pay for my business. I want to pay for my business.
00:11:56
Speaker
And what kind of people do you shop for? What kind of people do you shop for? What kind of people do you shop for? What kind of people do you shop for? What kind of people do you shop for? What kind of people do you shop for? What kind of people do you shop for? What kind of people do you shop for? What kind of people do you shop for?
00:12:17
Speaker
And then you put it into the category. So you said that was that you will source through f*** not only, that was the plan. Shop Clues may have f*** through source categories. Okay. So Shop Clues may have 4
Leveraging Technology and Automation
00:12:30
Speaker
f*** also. We had quite good relations with Shop Clues.
00:12:36
Speaker
Right.
00:13:07
Speaker
And you were one of many partners that they were giving invitation to.
00:13:20
Speaker
So, in Shop Clues also, because inflow, we have 30% to 35% to contribute to Actmax. And the best case is that, in the first year of the Capital year, we were limited. In the Capital year, we were able to rotate the first year of the Channel building. In the Channel building, we were focused. If this channel is only going to give us returns here, we were built earlier. So, in this time, we were able to do that. We were able to do that.
00:13:49
Speaker
What you were doing was essentially... ...sourced and then you would supply it further to your channel partners. And these channel partners were either distributors or retailers. Correct. So, how am I... ...sourced? Initially, there was an idea that if you were trading... ...you would have to pay for inventory. You would have to pay for repurvement. You would have to pay for the problem. You would have to pay for repair. And you would have to pay for the channel. So, you would have to pay for value addition.
00:14:17
Speaker
Any Tom Deacon Harry would have come or Mariko would have eliminated the other person's price. But no to value addition, we have to reposition that inventory. And we have to reposition it to a prior experience. The channel is very clear, we have to reposition it to a prior experience.
00:14:37
Speaker
Okay category inventory, we could have given only okay category inventory. We have channel basically parts used.
00:14:56
Speaker
We have channel Joki Aesthetics, Aesthetically from Bikul
Vision for Refit Global's Future
00:15:00
Speaker
Scratchy, but functionally okay. So different grades, various mix and match channel, which is our core strength as of now. Whatever inventory we source.
00:15:16
Speaker
in that particular month, 95% inventory, we liquidate in that same particular month. Whereas other R competitors,
00:15:34
Speaker
If you have a quantity of 35-40,000 quantity, it is not a tough task. But the main hurdle or main challenge lies in balance between 15,000 and 25,000. If you have a path that makes you mix and match, then you can do it.
00:15:58
Speaker
I think the next match is going to be a mix and match. I think the value of this box is going to be $5.50 per box I am carrying. But the next month liquidation price will be $3.5 CR or $4 CR. I think it is going to be close to $8 CR. But I think it is going to be close to $8 CR. But whatever money I make, I think it is going to be $8 CR.
00:16:25
Speaker
Why is that? The next one, the liquidation, you take a loss. Is it because of the selection bias, sir? Because of the industry, if the industry is fast-moving, you are slow-moving. If the industry is fast-moving, you are slow-moving. If the industry is fast-moving, you are slow-moving.
00:17:10
Speaker
We deal 100% in smartphones only. For example, Samsung J2, which is a very old model.
00:17:11
Speaker
We have close to, we deal in more than 500 plus models.
00:17:22
Speaker
I'll be able to sell it in the market very fast and I'll be able to make good margins also on this one.
00:17:46
Speaker
We will just take hardly 15, 20 or half an hour to make the order. But if you make the balance of 50% in total, then you will have to make sure that fast-moving models will not procure that balance of slow-moving models.
00:18:01
Speaker
Which is a very tough task. You just go and pick and choose your ones. We also get inventory in lots, which is a mix of fast, low and average ones. Have you still got that headache of segregating? They want the bulk buyer.
00:18:20
Speaker
Okay, absolutely. There only what we feel is, what we feel is a mistake. So there are every year, there are two or three partners who will come in this industry. And after years of industry exit, because of the same reason. This business is fantastic, wonderful.
00:18:48
Speaker
I am doing a wonderful job. You are saying that companies like you, like companies which are doing similar to what you are doing.
00:19:12
Speaker
We are competitors, we have to be able to win and win. We have to be able to win. We have to be able to win and win. We have to be able to win.
00:19:30
Speaker
But because of the various complexities of the inventory which he is carrying, beat in terms of quality, beat in terms of grade, beat model mix and beat the pricing, because pricing also keeps on changing. Mobile is a very diverse, you know, very fast moving
00:19:46
Speaker
This is not worth.
00:20:11
Speaker
But our thing is, we work on zero debt stock model. We work on the channel, whatever inventory, whatever percentage of inventory, because of the cost effectiveness, because of spare parts, unavailability, we especially procure BER inventory, which is beyond the economy.
00:20:39
Speaker
Okay, which is for spare brands basically then. Yeah, so brands don't have the inventory repairable. So what they did is... We are one of the few vendors, we are one of the few inventory sources.
00:20:58
Speaker
And of that, BR inventory, we are able to refurbish almost 40-45% of them, whose BRs. And then through balance inventory, we cannibalize the spare parts to use other devices, 100% fully functional. At last, we have the final budget.
00:21:15
Speaker
We have partners, we have partners, we have partners, we have partners, we have partners, we have partners, we have partners, we have partners, we have partners, we have partners,
00:21:36
Speaker
We are very clear since day one. We are very clear since day one. We are very clear since day one. We are very clear since day one. We are very clear since day one. We are very clear since day one.
00:22:01
Speaker
I'm not adding any value. Any person can come and do this job. Your actual value lies about, then actually you are making value. So we're very clear since day one. He will not take any... Obviously in terms of channel, in terms of artwork,
00:22:30
Speaker
I would zoom into something you said previously. You said that your competitors are able to do maybe 60%, 70% liquidation, same ones, which you are able to do 95%. So is that...
00:22:49
Speaker
Because you are creating bundles and then selling those bundles together to the buyer. Is that why you are able to manage it? Or is it because of the type of product that you buy? There are majorly because of three reasons. Number one, we don't give our buyers that option of choosing the event.
00:23:19
Speaker
So we have three categories. One is our distributors. Number two is world sellers. And number three is B2R channel. B2R are small, small retailers. So we do any of the three channels. We don't give them option of choosing the inventory from the lot.
00:23:37
Speaker
If a distributor has 1,000 units, we make the lot. Bases are great. Model mix, brand contribution. We just beat the inventory. We just beat the inventory.
00:24:00
Speaker
We don't give them to choose the inventory. Number two, we don't give them to choose the inventory. Number two, we don't give them to choose the inventory. Number two, we don't give them to choose the inventory. Number two, we don't give them to choose the inventory. Number two, we don't give them to choose the inventory. Number two, we don't give them to choose the inventory. Number two, we don't give them to choose the inventory. Number two, we don't give them to choose the inventory. Number two, we don't give them to choose the inventory. Number two, we don't give them to choose the inventory. Number two, we don't give them to choose the inventory. Number two, we don't give them to choose the inventory. Number two, we don't give them to choose the inventory. Number two, we don't give them to choose the inventory. Number two, we don't give them to choose the inventory. Number two, we don't give them to choose the inventory. Number two, we don't
00:24:30
Speaker
Okay. And this you're saying, so someone like your competitor, like say Casify is one of your competitors. So Casify would be telling retailers, you e-commerce experience, you see my inventory and you select what you want to buy, which is why Unki inventory.
00:24:49
Speaker
That same thing, that same problem that Joham discussed, that same problem, they are also facing. Selection. Selection. Yeah, okay. That same problem, that same problem, that same problem, they are also facing. Selection. Selection. Selection. Selection. Selection. Selection. Selection. Selection. Selection. Selection. Selection. Selection. Selection. Selection. Selection. Selection. Selection. Selection. Selection. Selection. Selection. Selection. Selection. Selection. Selection. Selection. Selection. Selection. Selection. Selection. Selection. Selection. Selection. Selection. Selection. Selection. Selection. Selection. Selection. Selection. Selection. Selection. Selection. Selection. Selection.
00:25:13
Speaker
But my question here is, why would some guy who's procuring 1000 units, why would he come to you? How did you convince?
00:25:32
Speaker
Sourcing, we don't spend a single penny. The only cost in sourcing which is involved is lot sticks, which is less than half a percent.
00:25:51
Speaker
Whereas our competitor, who inventory customer co-op the platform, the customer acquisition cost there. Logistics cost intensive. We have to pick the device and pick it up. We have to pick the warehousing, different, different. Just imagine pan-indian location for centralized hubs.
00:26:34
Speaker
What is an example of a scheme that you run for loyalty?
00:26:39
Speaker
Form loyalty, for example, distributor, if he'll do 25,000 quantity or 15,000 quantity, he'll get an additional slap scheme of 2%, additional scheme of 2%. Yeah, we give them some, you know, two times that, you know, 2% of the total turnover he does with us. So for example, 25,000 quantity contributes to 10 CRO business. So he'll get 20 lakh rupees additional.
00:27:14
Speaker
Your distributors are bound to follow your pricing. You have set the pricing for your channel. This is the price that our channel is aware of.
00:27:24
Speaker
The price of the sheet will be more than the price of the sheet. Sometimes we take the call depending on the price of the sheet. The end consumer will sell it at the price of the sheet. The end consumer will sell it at the price of the sheet.
00:27:43
Speaker
Okay, so pricing power is theirs only. This is a channel that has a pricing control. If you want to buy a inventory, you can sell it to a B2R channel. If you want to buy a pricing channel, you can sell it to a customer offering. If you want to buy a conversion channel, you can sell it to a wholesaler and a distribution channel. If you want to buy a inventory, you can sell it to a pricing controller. If you want to buy a market, you can sell it to a company.
00:28:12
Speaker
Right. Okay. And number two reason they are, they are not bound to work with us because of the credibility, trust, reputation, or whatever we have built, 40-45% partners. So they just trust us. That's the second and what's the third. You said three reasons why they come to you.
00:28:41
Speaker
And number three is in terms of sourcing the price, all the partners are not sourcing from us.
00:28:58
Speaker
Okay, okay, okay. We have other channels also for sourcing inventory. This channel has a disadvantage on the consistency of the inventory. There are many partners. There is a lot of inventory. There is a lot of inventory. There is a lot of inventory. There is a lot of inventory. There is a lot of inventory.
00:29:27
Speaker
So, it becomes our liability, our responsibility. So, it is a consistent inventory to supply. So, as I said, it lies in tier 2 and tier 3 cities. In terms of money, in terms of time, in terms of hassle.
00:29:55
Speaker
So, if you refurbish your phone, your value proposition will be better. But just because you have to take a look at it from Lataq or from Manipur coming to Delhi or Bangalore or Mumbai to source the inventory, there are n number of partners that you can inventory liquidate. So, if you look at the shortlist, you can trust that the quality and grade of inventory will be increased.
00:30:42
Speaker
Payback is not a business business, but it is a business business. If you are a business owner, you can only buy a source in Delhi. If you are a business owner, you can only buy a source in Delhi.
00:30:48
Speaker
Will it be as per the condition what he is claiming?
00:31:00
Speaker
That quality will deliver to that quality. That is best. It will be as competitive as other partners are giving us.
00:31:24
Speaker
You can store the inventory available. If you want to get the sheet, you can transfer the money. If you want to buy the shipment, you can store it. If you want to get the sheet, you can transfer the money. If you want to get the sheet, you can transfer the money.
00:31:45
Speaker
Even for the small retailer, the model is same. You give them a set of products, they don't choose. You choose and create a bundle for them. Absolutely. When you say that our quality commitment, what is that quality commitment? What does it mean? Great definition. We have our own diagnostic app. That app is run on the phone.
00:32:12
Speaker
Once that app is wrapped within half a second, that app generates a report on 37 checkpoints, phone, camera, condition, display, SI, vibration, SI, rigger, SI. The report generates all of that. Whose report, whatever the problem of the phone, that app identifies that problem. Based on the problem of that phone, that phone is allocated to that particular engineer in our recruitment department.
00:32:45
Speaker
Once our app gives a go-ahead that this phone is ready to sell, then it goes to R.
00:32:52
Speaker
So, that is the quality check which we have done in our internal system because of which the failure ratio is less than one person. You take back the device if there is a problem with it. Only from retailers. So, a retailer who has an unsold inventory, that is their responsibility? Their sources are their own. Okay.
00:33:16
Speaker
This entire offline channel is getting automated. This entire thing is getting automated. All our channels are getting automated. All our channels are getting automated. All our channels are getting automated. All our channels are getting automated. All our channels are getting automated. All our channels are getting automated. All our channels are getting automated. All our channels are getting automated. All our channels are getting automated. All our channels are getting automated. All our channels are getting automated. All our channels are getting automated. All our channels are getting automated. All our channels are getting automated. All our channels are getting automated. All our channels are getting automated. All our channels are getting automated. All our channels are getting automated. All our channels are getting automated. All our channels are getting automated. All our channels are getting automated. All our channels are getting automated. All our channels are getting automated. All our channels are getting automated. All our channels are getting automated. All our channels are getting automated. All our channels are getting automated. All our channels are getting automated. All our channels are getting automated. All our channels are getting automated
00:33:46
Speaker
These phones also have some grading like accident or good or average or something like that.
00:33:55
Speaker
So, Humjoy have basically superb, very good and good. How did you build this channel? That is supply point of view, Savi. That is not very easy. So, we have been consistent in terms of performance. We have delivered numbers whenever it is required. Our contribution to their business is almost 40-45% of the total.
00:34:15
Speaker
resource. As a partner, we have been very transparent and whatever feedback we give, it should be good for the market. You reduce the price for this model because I'll be able to make 5%.
00:34:31
Speaker
Considering the entire market, we give the feedback. feedback is mostly on prices. Mostly on prices and the market feedback, how where the market is moving.
00:34:47
Speaker
The market is going to be higher than the funds for refurbishing. The funds are going to be higher than the funds are going to be higher than the funds are going to be higher than the funds are going to be higher than the funds are going to be higher than the funds are going to be higher than the funds are going to be higher than the funds are going to be higher than the funds are going to be higher than the funds are going to be higher than the funds are going to be higher.
00:35:12
Speaker
So these type of feedback in terms of model, in terms of price, so these type of feedback. Implication, like you're saying a customer who's exchanging his old phone in Bihar, then a customer who's exchanging his old phone in Delhi will get a different value for that exchange. What is the reason to do this? The reason to do this, for example, agar koi Delhi main customer.
00:35:37
Speaker
If you are a customer, you can use the state and the number of options that you can use. If you are a customer, you can use the online store store, you can use the state store, you can use the online store store, you can use the state store, you can use the online store store, you can use the online store store, you can use the online store store, you can use the online store store, you can use the online store store, you can use the online store store, you can use the online store store, you can use the online store store, you can use the online store store, you can use the online store, you can use the online store, you can use the online store, you can use the online store, you can use the online store, you can use the online store, you can use the online store, you can use the online store, you can use the online store, you can use the online store, you can use the online store, you can use the online store, you can use the online store, you can use the
00:35:56
Speaker
Tier 2, Tier 3 cities are still there. The total amount of time has been paid. The price has been saved. The price has been saved. The price has been saved. The price has been saved. The price has been saved. The price has been saved. The price has been saved. The price has been saved. The price has been saved. The price has been saved. The price has been saved.
00:36:23
Speaker
Whereas customers sitting in Metro, there is no time constraint. If you want to make a decision, click off a button. If you are in Metro, you have to pass through the company. If you have to pass through the company, you have to get that inventory from tier 2 or tier 3 city. You have to pass through the customer. If you don't have a customer, you have to pass through the phone, or you have to pass through the phone. Do you have a potential customer? Do you have a potential customer? Do you have a potential customer?
00:36:51
Speaker
What about like even brands offer trade-ins now? Like if some Samsung store may be trading like that. Yeah, that market is quite big. You know, Samsung, you're surprised that Samsung exchange program, which happens at their storefront, that market is as big as, you know, 2,500, 2,700 CRI. But you're not accessing that inventory. We are partners with other brands as well. And now we are partnering. We'll be participating in these type of things.
00:37:16
Speaker
Okay. Okay. So what you're saying is 35% is split between Amazon and like Samsung and all these brands and 65% trade in phones. Amazing. Okay. Amazing. Okay. So it seems like your constraint to growth is working capital.
00:37:39
Speaker
Is that the case? What are the constraints to growth? Obviously, that is one of the constraints and which we also see as the major reason to do these things with this set of working capital.
00:38:01
Speaker
And we are trying to arrange that additional working capital into the process. And hopefully, in a month's time, we will be able to do that. Working capital is a big raw material, basically. And you built it, basically, with both types of innovation.
00:38:22
Speaker
First of all, the office was limited. The office was set up. Obviously, the manpar was limited. Everything was limited. The capital was limited. The manpar was limited. The time was limited. The office was limited. The manpar was limited. The manpar was limited. The manpar was limited. The manpar was limited. The manpar was limited.
00:38:50
Speaker
What we are doing is not purana phone. That's a refurbished phone. We have refurbished the problem of that device and we have refurbished it. We have repaired it already.
00:39:01
Speaker
But the market doesn't have a phone. Then they used to educate them. This is not purana phone, this is refurbished. Purana phone is that when you use the phone, you don't have to use the phone. You don't have to use the phone. You don't have to have a problem with the problem. You have to have a problem with the problem. You don't have to have a problem with the problem.
00:39:25
Speaker
We will come back after 3 days. We will take back the inventory.
00:39:35
Speaker
Like, area sales executives just look at the channel, building a channel, you go from dealer to distributor to retailer to convince them that you have a product to carry. That is what both of you did in the early years. Exactly. Even our distributors, also Joe, Hamarissa, Chocloos, Mathejo, Pandrav, Rislak, Pachislak, Pachaslaka, Kaam.
00:40:01
Speaker
They were just a working capital provider. They were buying the inventory and selling it through shop.
00:40:24
Speaker
I will take 5000 units if you are staying. But where will I liquidate this 5000 units?
00:40:32
Speaker
So this is how we crack wholesalers. So this is how we crack wholesalers. You buy this 500 minutes and you get this build from here.
00:40:56
Speaker
We are very clear from day one that we are going to make good money. And the majority of our profit is coming from that same channel.
00:41:16
Speaker
And that balance between B2R and distribution can be balanced. And this is how we have bifurcated these three channels. Where after first year, we increased just to working capital or working capital. Obviously, banks are going to limit this.
00:41:39
Speaker
Laptops or large appliances, we have not seen before. There was no value addition. There was no value addition. We had to segregate this channel. We had to use this channel as a channel for laptops or large appliances. So we realized that we had no value addition. So we realized that we had no value addition. So we realized that we had no value addition. So we realized that we had no value addition. So we realized that we had no value addition. So we realized that we had no value addition. So we realized that we had no value addition. So we realized that we had no value addition. So we realized that we had no value addition. So we realized that we had no value addition. So we realized that we had no value addition. So we realized that we had no value addition. So we realized that we had no value addition. So we realized that we had no value addition. So we realized that we had no value addition. So we realized that we had no value addition. So we realized that we had no value addition. So we realized that we had
00:42:10
Speaker
But the only condition is...
00:42:23
Speaker
That's why I'm here today. I've been in the business for a long time. I've been in the business for a long time. I've been in the business for a long time. I've been in the business for a long time. I've been in the business for a long time. I've been in the business for a long time. I've been in the business for a long time. I've been in the business for a long time. I've been in the business for a long time.
00:42:51
Speaker
We have also focused on our channel. So once you confirm the lot, you have to give 20-25% of the advance payment at the time of slot booking. And before dispatch, you have to make the balance rate.
00:43:18
Speaker
But since now we are looking at, you know, with this current working capital.
00:43:28
Speaker
Now, we have to take this to 500, 700, 800 CR in the next few years. With this current set of working capital, the supply is going to be 3x. Now, it is going to be 3x. Now, it is going to be 3x. Now, it is going to be 3x. Now, it is going to be 3x. Now, it is going to be 3x. Now, it is going to be 3x. Now, it is going to be 3x. Now, it is going to be 3x. Now, it is going to be 3x. Now, it is going to be 3x. Now, it is going to be 3x. Now, it is going to be 3x. Now, it is going to be 3x. Now, it is going to be 3x. Now, it is going to be 3x. Now, it is going to be 3x. Now, it is going to be 3x. Now, it is going to be 3x. Now, it is going to be
00:43:55
Speaker
Basically, the whole distribution, channel distribution game runs on working capitals. So, why do you need distributors and wholesalers?
00:44:15
Speaker
That is also one of the important things. Distributor or wholesaler is more than 500 and distributor is more than 1000.
00:44:35
Speaker
I get my working capital back.
00:44:54
Speaker
Right. Okay. Doing more branding of refit global. Like you said, you don't want to be just a trader.
00:45:18
Speaker
But I think the idea is that if we celebrate this, we can repeat the global Quran on the phone. That's a waste of money. That's a waste of money. That's a waste of money. That's a waste of money. That's a waste of money.
00:45:45
Speaker
That is how you build your brand.
00:46:05
Speaker
Plus, you've required B2R, you've got space, in-shop branding, you've got boards, you've got countershare, you've got design, those are all things we are doing.
00:46:22
Speaker
Like things like say, boxing the phone, most phones you would be getting would be without boxing. Now we are also, what we are doing is, all the devices which goes into offline market. So there is a QR code on the back side of the device. customer just needs to scan that QR code.
00:46:51
Speaker
with the actual image of the phone which is present inside the box. Zoom in, zoom out. That is also what, this is the minimal scratch which is inside, which is there in the box. Very nice.
00:47:07
Speaker
So the retailer can take care of it. He can take care of it. Wow. This is across all channels, like distributor can be boxed with QR code and all that. That is for this channel, there are optional distributors, whether you buy it with the box or without the box. There is only one additional cost, so the margin will be added. There are also optional retailers, because B2R will be channeled 100% with the box.
00:47:36
Speaker
Okay, so what you're building on retail is basically more directly competing with like a Casify. Casify retail direct sales, they also sell to like through channels. They also have distribution channel also but and also they sell this device to phone pro.
00:48:07
Speaker
I said, so Casify is in a way competing with retailers. Like they have set up offline stores where customers can come and buy refurbished products instead of going to retailers. Yeah, they can. Obviously, they are doing that, but that is not a long term thing to do. Why is that? You have funds and you have ample money.
00:48:27
Speaker
So that is not feasible. Okay. Okay. Basically the only way to successfully do reefer, which is you really have to have a Baniya mindset. Baniya mindset and plus, you know, as we say, you know, as we said, you have to have a corporate company.
00:49:12
Speaker
You just need to have the right mindset and right channel to sell that.
00:49:16
Speaker
Okay, okay, amazing. How big is this refurbished market and how do they split up with our concept players? You are there, Casify is there, who else is there? How big is this market? So the total overall refurbished market is $4.2 billion. This is the entire organized and unorganized booth.
00:49:42
Speaker
If you organize, what percentage? Organized would be 50%. So that is what online companies and brands are trying to do. To get that inventory to that organized channel. What are the other players in the organized market?
00:49:59
Speaker
is there, extra cover is there. So, there are multiple partners which are spread geographically, but they only do trading. So, you go to site.
00:50:27
Speaker
That's it. Now, we are not existing partners. We have to visit them. We have to go back to business. We have to go back to feedback. We have to go back to feedback. We have to go back to feedback. We have to go back to feedback. We have to go back to feedback. We have to go back to feedback. We have to go back to feedback.
00:50:52
Speaker
We have a lot of feedback from our industry. We have a lot of feedback from our customers. We have a lot of feedback from our customers. We have a lot of feedback from our customers. We have a lot of feedback from our customers. We have a lot of feedback from our customers. We have a lot of feedback from our customers. We have a lot of feedback from our customers. We have a lot of feedback from our customers.
00:51:09
Speaker
From tier 2 to tier 3, there is customer support, retailers, retailers, and people who have feedback on how to educate them. There is customer support and value proposition. So tier 3, city, city is the last thing we discussed. Our household average income is 20-25,000.
00:51:32
Speaker
It is not like metros, it is not like a match member, it is not like a match member, it is not like a match member, it is not like a match member, it is not like a match member, it is not like a match member, it is not like a match member, it is not like a match member, it is not like a match member, it is not like a match member, it is not like a match member, it is not like a match member, it is not like a match member, it is not like a match member, it is not like a match member, it is not like a match member, it is not like a match member, it is not like a match member, it is not like a match member, it is not like a match member, it is not like a match member, it is not like a match member, it is not like a match member, it is not like a match member, it is not like a match member, it is not like a match member, it is not like a match member, it
00:52:01
Speaker
If you look at this photo, you can see that it has a T-3 with a custom camera with a megapixel. The phone is fast and the processor is fast. This is the first time he was using a keypad and now he is upgrading to a smartphone. If you look at the keypad, you can see that the phone has a photo with a zoom and a pixel. You can see that the phone has a photo on it. What's up? You can see that the phone has a photo.
00:52:30
Speaker
It's a YouTube channel. If you want to learn more about YouTube, you can go to the YouTube channel. If you want to learn more about YouTube, you can go to the YouTube channel. If you want to learn more about YouTube, you can go to the YouTube channel. If you want to learn more about YouTube, go to the YouTube channel.
00:52:57
Speaker
Is there a science behind how you are building your channel? Like how you expand your channel? I started getting to channels like regions like Ladakh, Shillong, Meghalaya, Manikore, etc. I started getting to the distributor partners for inventory. So the partners sitting right on the east of our base route of Polkata.
00:53:25
Speaker
We are going to take a look at the market potential in the next few days.
00:53:35
Speaker
We have partnered with Charkarod, a distributor, to make the market potential for this company. We have used this data to make the inventory of the company. We have used this data to make the company reach out to reach out to reach out to reach out to the Delhi office.
00:53:59
Speaker
So just imagine, when the Assam has trained like this, and the train has suffered like this, just to source 200 quantity. So just imagine, when the Assam has trained like this, and the train has suffered like this, just to source 200 quantity. So just imagine, when the Assam has trained like this, just to source 200 quantity. So just imagine, when the Assam has trained like this, just to source 200 quantity. Just imagine, when the Assam has trained like this, just to source 200 quantity. Just imagine, when the Assam has trained like this, just to source 200 quantity. Just imagine, when the Assam has trained like this, just to source 200 quantity. Just imagine, when the Assam has trained like this, just to source 200 quantity. Just imagine, when the Assam has trained like this, just to source 200 quantity. Just imagine, when the Assam has trained like this, just to source 200 quantity. Just imagine, when the Assam has trained like this, just to source 200 quantity. Just imagine, when the Ass
00:54:15
Speaker
The same thing happened. The same thing happened. The same thing happened. The same thing happened. The same thing happened. The same thing happened. The same thing happened. The same thing happened. The same thing happened. The same thing happened. The same thing happened. The same thing happened. The same thing happened. The same thing happened. The same thing happened. The same thing happened. The same thing happened. The same thing happened. The same thing happened. The same thing happened. The same thing happened. The same thing happened. The same thing happened. The same thing happened. The same thing happened.
00:54:44
Speaker
If there is a maximum problem, the problem will not be solved. If the problem is not solved, the problem will not be solved. If the problem is not solved, the problem will not be solved. If the problem is not solved, the problem will not be solved.
00:55:13
Speaker
Amazing. Tell me something like you have that understanding at the retail level and you literally had Google investing money in geo platforms with the best geophone. But anyway, it didn't live up to the hype.
00:55:33
Speaker
Actually, I think that same thing is related to Reliance's problem. The problem is that when you type in your phone, the feature of your phone is not being launched. Reliance can be CDM-ed. CDM-ed can be a phone. You can be a phone too.
00:55:52
Speaker
But over a period of 10 minutes, I realized that I was going to do something wrong. I didn't know that I was going to do anything wrong. I didn't know that I was going to do anything wrong. I didn't know that I was going to do anything wrong. I didn't know that I was going to do anything wrong. I didn't know that I was going to do anything wrong.
00:56:11
Speaker
So I think that road played a very big part in this geo phones. Plus, this geo launch was a big customer that was able to get a lot of customers to get a lot of local phone and mobile phones. So they bought and purchased it. So they created a lot of mobile phones. So that was the options and the price point that people are aware of.
00:56:31
Speaker
Number two, we are creating a particular network provider, because we don't want to do this. Because we don't want to do this because we don't want to do this because we don't want to do it because we don't want to do it because we don't want to do it because we don't want to do it because we don't want to do it because we don't want to do it because we don't want to do it because we don't want to do it because we don't want to do it.
00:56:52
Speaker
What all do you need to do to achieve it? Do you need to raise funds from investors? Or do you need to build more sources of supply? Or do you need to build more retailers in your channel? No, what we see is in terms of sourcing, that is more or less what we see in sourcing initiatives.
00:57:13
Speaker
Brands and our partners are taking this discussion. We say supply for the next three to five years, IBC, no problem. In terms of selling also, our current channel has appetite to consume 1.5 lakh units a month. And we have done this also multiple times.
00:57:37
Speaker
The peak season, the inventory supply is in lakhs. Same thing we have followed during those months also. We have liquidated that inventory in the same month. That is more than 1.5 lakhs easily.
00:57:55
Speaker
We are penetrating more towards tier 2, tier 3, tier 4 cities. Just because we are trying to automate everything and we are doing a smooth line process.
00:58:17
Speaker
If you have a transaction, if you have a transaction, that is also, rotation will also become faster. If you have a partner, if you have a partner, if you have a partner, if you have a partner, if you have a partner, if you have a partner, if you have a partner, if you have a partner, if you have a partner, if you have a partner, if you have a partner, if you have a partner,
00:58:33
Speaker
Okay, okay. The fear of missing out.
00:58:57
Speaker
But yes, obviously to get us to 3,500 or 4,000 or 5,000 crore type of figure, obviously sourcing our channel point, we are not concerned because we are the way we have been building our offline channel. The hard work, those were very difficult. Go deeper into beyond tier 1 and tier 2.
00:59:25
Speaker
Yeah, deeper and plus technology will also play a very major role in this. So that is the reason now the RQC problems of the device is being diagnosed by diagnostic app. That is completely automated. The entire warehousing and everything is now completely automated. Because these all things will only get us to that volume. So hopefully in the next three years time, I think we should be clocking thousands here for sure.
00:59:55
Speaker
Tell me something, why is Casify so focused on building its own supply? Are your supplies easily available? Because Casify was just a celebrity endorsement, just to build supply. Because initial fundraising, the initial rounds, whatever they had raised, that initial fund round spoke, it was raised basis that only. Because who's time pick?
01:00:23
Speaker
channel, inventory, supply key, equip, fixed particular source. Obviously, that industry was more unstructured. That is, Kashi Pay started 10 years back.
01:00:36
Speaker
10 years back. Okay. Did you send a phone or refurbished the phone? No, it was a trade-in culture. Trade-in was a bit of a... You know, that time would take a lot of time, but it was a bit of a late time, and it was a bit of a period of time. It was a period of time, and it was a period of time, and it was a period of time, and it was a period of time, and it was a period of time, and it was a period of time, and it was a period of time, and it was a period of time, and it was a period of time, and it was a period of time, and it was a period of time, and it was a period of time, and it was a period of time, and it was a period of time, and it was a period of time, and it was a period of time, and it was a period of time, and it was a period of time, and it was a period of time, and it was a
01:01:05
Speaker
Market dynamics has changed. When they started, it was time to supply Thiening. So they had to build supply. But then supply like buying with these retailers basically.
01:01:18
Speaker
And all these dealers and the online partners, be it brands, be it online partners, they have become very aggressive in terms of supply. Every time we go to them and we only discuss how to tap that 50% of the inventory which is lying in that unstructured.
01:01:35
Speaker
Because it drives their sales. If they are able to get more people to give in their old device, it means that people are upgrading to a new device, basically. Yes, because of the forward sales, they are a little bit dependent. Okay, one last question. So, tell me about your organization structure. How many people do you have? How do you manage the team and all that? So, in total, at Refit, we have 32.
01:02:03
Speaker
Wow, I think we have a billion 300 karats. Amazing. That business man said, I don't know how to do it, I don't know how to do it. So obviously me and Abhneet have, our entire sales was managed by me and Abhneet. We just have 8 people.
01:02:34
Speaker
And if you look at the score, maximum employees, those are TRCs. We have a refurbishment centre. We have to look at it. We have to look at the volume. We have to look at the peak season. We have to look at the time. We have to look at it.
01:02:49
Speaker
Almost time to outsource. So we have the need to see some additional manpower for two months, three months, four months, whenever required. But as an organization, we are just 32 as of now, but looking, we don't have any plugs.
01:03:05
Speaker
I think it will never become 300, basically. So that is the mindset. So what's the end goal? Do you want to take it all the way to IPO? How will you make it? If you don't bring in investors, how will you make it?
01:03:27
Speaker
This number will be targeting and we should be here by the next five years. And what is that number? Depending. So five years we are targeting that we should be somewhere, if everything goes well. So should we do it somewhere around 1500?
01:03:51
Speaker
We get joy when we see any rickshaw puller.
01:04:00
Speaker
The feature phone was very happy. The photo was very happy. Then we think that gives us real joy. He can have captured those memories with the same amount of money what he was willing to spend.
01:04:29
Speaker
As far as creating our own wealth is concerned, we will cross the bridge when it comes to first. We take milestones step by step.
01:04:45
Speaker
Hamara goal is to clock minimum 350 to 375 CR. Next year, we should be crossing 550-600. And then so far, so henceforth by 50 year, we should be somewhere around 1200-1500 CR. And then once we reach that, then we'll see that IPO should be the option or raising some funds.
01:05:05
Speaker
That's the idea we have, not raising funds is, you know, what happens is sometimes, investor can mindset to a, it should match with your mindset. Because when investor comes, he only comes with the mindset of what is the exit for me. As co-founders, obviously we are also,
01:05:26
Speaker
other partner has, if the other, if the investor is showing, restoring our business, it becomes our responsibility to give you a good exit. But at the same time, sometimes what happens is much investors are on board, they make you do such things in which, you know, you yourself know, because you have been running the show for the past six, seven years, you know about this industry, that where, especially when you are making money, then to all the more, you know,
01:05:55
Speaker
And investors are very concerned about this. They are very concerned about this. They are very concerned about this. Despite knowing this, they are very concerned about this. They are very concerned about this. Just because of some pressure. Who is the person sitting on your head?
01:06:13
Speaker
So that was the thing. Are you able to pay yourself this financial year? After six years of hard work, now we are drawing that much salary on which we have left our respective jobs.
01:07:06
Speaker
That was the idea.
01:07:06
Speaker
I will be working in capital. I will be working in Hamari net worth.