One day delivery, heavy discounts and inventory less- marketplace model, have been the key success paths of the existing ecommerce portals. However, Gurgaon based ecommerce venture, Factoryrush.com, plans to take this success model a step ahead, thereby joining the traditional ecommerce ways with a simple yet effective promotion concept- BOGO – Buy One Get One Free.
Launched in December 2013, Factoryrush is a venture of 4 viz. Mayur Karwa, Ankush Karwa, Anant Bisht and Neeraj Choudhary. The startup aims at delivering factory goods directly to the consumers’ doorsteps cutting down the supply chain and thus the costs to its minimum. At the same time, allowing factories to earn more revenue by way of forward integration – making it a win win situation for all.
However, a major challenge faced was the bulk made by the factories and on the contrary, very small quantity purchased by the consumer. This gives way to their base model- BOGO. “Although, the technique is quite old but till date, no ecommerce retailer in India has made its primary selling proposition”, said Mayur. Also, the company differentiates from its existing competitors with its ability to source products directly from factories and make them available at very reasonable prices.
Currently focusing only on the fashion category, the portal offers limited product categories, restricted to kurtis & leggings for only women and footwear for both. The online buyer is allowed to add two products of his/her choice to the cart. The one which is priced lower will automatically become free. If both the products are of same value, they will charge only for one pair and the other pair is free.
The company, at present finds association with around 20-22 factories in cities such as Jaipur (kurtis), Mumbai, China (footwear), Agra and Kanpur. In near future, the team aims to add more factories to the list and also to enter men and women apparel segments.
Since its launch, the portal has generated an average traffic of 5 lakhs per month and it is observed to increase at a compounded monthly rate of 10%. Factoryrush is currently using Facebook, retargeting and Email marketing as the promotion tools. However, founders have a firm belief that an offer like Buy one Get one free has social virality attributes associated with it.
Blue Dart, FedEx and Delhivery are the logistics partners of the company with nearly all major payment options available viz. Net banking/credit card/debit card/ COD. There is no minimum free shipping concept. Every transaction is levied with an additional INR 49 as the delivery charges. The shipping time for an order is approximately 2-3 days and follows refundable policy of 15 days.
On asking how this policy will sustain in the current world of almost free and one day delivery, Mayur answered, “We always believed in transparent pricing and that is why we didn’t mark up our product pricing to take care of logistics expenses.”
The startup is currently self-funded, but is looking forward to raise outside funding in order to scale up its operations. Also, the founders are planning to reach break-even by middle of this year.
In the past few years, it has been observed that discount is not a sustained ecommerce business model and has led to shut down or acquisition of many. With Factoryrush dealing majorly with non-branding stuff, how many takers would one go for unbranded and discounted products, even when companies like Koutons failed to survive long enough with BOGO kind of deals.
Also, it would be worth watching, how would any ecommerce startup compete with the likes of Myntra, where they are giving almost the same competitive pricing and that too for branded products.
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