Loss leaders is a time honored pricing strategy adopted by retailers worldwide to attract consumers to the stores. The intent of this pricing strategy is to not only have the customer buy the (loss leader) sale item, but other products that are not discounted. The rate of success of this strategy has been enormous worldwide which is being replicated in the Indian Market too but with the Indian Retail market opening up, retailers introducing newer product categories and many retailers entering the market.
It has become crucial for retailers to adopt strategies like loss leaders. But, to be able to understand the concept thoroughly.

What is a loss leader?
A loss leader is a pricing strategy which involves selling a product at a low price (at cost or below cost) to stimulate other, profitable sales. It is a kind of sales promotion, in other words marketing concentrating on a pricing strategy. This is a commonly used technique to attract customers via bargain on necessities and sell to them products which they don’t require; this will help in generation of profits.

Some Common Strategies:
Usually retailers place the loss leader at the end of a store, so that purchasers walk past racks of other displayed goods which have higher profit margins.
As loss leader item is a product that customers purchases frequently—thus the retailer ensures that the offered price is a bargain.
Retailers offer limited items as loss leaders, which discourages stockpiling by customers, which compels consumers to make repeated visits.
The retailer sets limitations on the quantity that one purchaser can make (e.g., ” Buy One Get 20% off on second”).

When and Why a Loss Leader Strategy is used?
Move Overstock: A retailer can use the loss leader strategy to encourage the sales of products which are the declining stage of their life cycle or if a retailer has inventory that isn’t moving or if he is overstocked on a particular item, a loss leader can move it. By cutting the price of such an item, a retailer not only frees up the shelf space and reduce inventory, but also increase cash flow.

Increased Footfalls: Using loss leaders as a marketing tool can help gain new customers and increase return visits. Consumers like a bargain and will likely come back to shop.

Attracting Customers from Different Sectors: Retailers use loss leader strategy to attract customers from different age groups, backgrounds and demographics.. For example, recently a leading supermarket introduced the sale of jeans from a leading jeans manufacturer. The clothing was purchased from a wholesaler and priced competitively which results in low profit. This helped in attracted young consumers who are not the target consumers for a supermarket.

Loss Leader Precautions
Though there have been successes in loss leader pricing, but a retailer must be aware of some obstacles to the process. If done incorrectly, loss leaders can actually cause the business to lose money.

§ A loss leaders strategy should be used only when it’s assured that the lost profit can be countered by the sales of other products or services. It should be made sure that there is a significant quantity of the sale item in stock

§ Not all manufacturers and suppliers allow their products to be priced under their minimum advertised price or less than what their other dealers are selling the same item. As it may be perceived as damage to the brand image of the manufacturer. Thus, it may be good idea to contact the manufacturers or suppliers before proceeding with the strategy.

§ In some states it is forbidden to sell products below cost. In recent years, lawsuits have emerged claiming loss leader pricing strategies to be equivalent to illegal business practices.

§ Competitors can take advantage of a retailer’s bargain and purchase the loss leader goods from the retailer to sell in their own shop. In which case, they could further reduce the price giving them a competitive advantage over you, or sell it at a price with a view to making a small profit.

The loss leader strategy is used primarily to attract customers to a retail store through the introduction of a bargain. Implementing the loss leader strategy can be risky and therefore needs to be considered that it is the right approach for penetrating the market.

References:
Bizhelp24, Retail.about, Wikipedia

In this competitive retailing environment, pulling the crowd has become a daunting task for retailers. Even mall owners have to implement new strategies and promotional tools to bring in the crowd as they want greater footfalls and more business for their tenants.

I recently visited Ambience Mall in Gurgaon during the festival of Teej which was also coinciding with friendship week. Ambience Mall, which boasts of being India’s largest mall with 1 km shopping floor, was totally abuzz on that day. The mall was totally in sync with the festive mood. At the entrance, there were people in traditional Rajasthani costumes singing and playing dhol welcoming visitors.

The atrium of the mall was replicated into a Teej fair running in a village. Swings decorated with flowers were placed where children as well as adults were waiting for their turn (yeah…even I was one of themJ). Various small shops selling hand-crafted and wooden toys were set up along two rows. A vendor giving “gudiya ke baal” free to children, puppet dance running in one corner, astrologer with his parrot giving free advise to people (was a busy man..this shows astrology services is a big business in India), Mehndi wala sitting at other corner, bangle shop, vendors selling “ek tara” and traditional perfumes and lots of other stuff, professional Rajasthani dancers dancing to the beats of folk music was all adding to the vibrancy of the place. Also, there were cots placed around adding to the village feel where people can sit and relax.

The atmosphere was filled with festive mood. Even the retailers were capitalizing on the festivities, various outlets and department stores were running “Sale” for increasing the footfalls in their store. One soft toy shop, on the event of Friendship Day, had organized games outside its shop and winners were being awarded Rs.100 gift voucher which could be redeemed at the shop. This was not only an enjoyable experience for the participants and passers by but has also brought additional sales for the store.

On that day, the whole mall was abuzz with fun activities going around lighting up the place. This all suggests that mall owners are realizing the need to bring out timely strategies to keep the footfalls increasing in their malls. Carrying out promotional activities during festive season and special occasions, organizing events and shows, food festivals, handicraft exhibitions, etc. are becoming regular feature for mall promotions.

After choosing the right tenant mix, mall owners’ responsibility is to sustain and increase the footfalls in their malls to ensure that the tenants do not make losses due to low footfalls.

One of the other examples is Simon malls in Indianapolis which is using “experiential marketing” which provides entertainment in addition to shopping. Simon, which owns six malls in the Atlanta area, develops promotions and events in partnership with radio and television stations, retailers, charities and celebrities. Simon has sponsored events for children and concerts by teen performers as part of a back-to-school promotion. The company also sponsors after-hours events to raise money for charity. [1]

Developers can work on drafting marketing strategies for individual malls to meet the needs of the local consumer base and the challenges of local and in some cases, regional competitors. A “Mall events” calendar can be made and shared with retailers so that they could organize their merchandise accordingly in tandem with the event. Such promotion events not only increase the popularity of the Mall, but also increase the value of the space available in the mall. Such events make the mall more popular and help the mall in attracting better brands at better prices.

Reference: [1] BizJournals
Fibre2fashion

Retail is one of the most badly affected industries in the current inflationary conditions, and is experimenting with various schemes and strategies to keep up the footfalls and sales graph.
Retailers are using these strategies in combination to make sure the consumer sees value in the offering and decides to visit the store in this lean time. In the recent past the retailers have been focusing on the following:

Flat Discounts: This is one of the most widely used promotions technique by the retailer, under this a retailer offers a flat percentage deduction of the price of a commodity.

Happy Hours shopping: is a period of time during which some restaurants offer discounts for alcoholic drinks for promotion of the venue in the quieter times. The same is being replicated by retailers some retailers are offering happy hours discounts during the day when all the merchandise is sold at rock-bottom prices

Buy One, Get One Free: Originally, “buy one get one free” was a random, end of season or stock clearance method used by stores who were left with a large quantity of stock that they were looking to sell quickly. More recently it has become a popular, planned and considered marketing method to sell high-end brands

Coupons: These have become a standard promotion tool with retailers for inviting consumers at the store; this not only invites a consumer to the store but also leads to a higher conversion rate than what is allowed for. Under this many retailers are tying-up with Corporates to give away their sales coupons as rewards.

Free-Standing Insertions: Insertions in the local newspaper showcasing best and lowest price deals is emerging as the biggest crowd puller.

Rebates: To attract huge footfalls retailers are rewarding consumers through offering rebates like additional discounts, assured gifts, money back, holiday trips for carrying with them a cutting of newspaper advertisement of the store or past purchase bills.
Retailers are becoming much more flexible and agile than they used to be. It would be interesting to see some new techniques and strategies by the retailers to adjust to the global slowdown.

Reference: Wikipedia

But Wharton faculty say the current inflationary period, if handled carefully, may actually be a business opportunity for some retailers, especially if they make selective changes in inventory management, pricing and promotions.
That new thinking can begin with inventory. According to Gérard Cachon, a professor of operations and information management from the 1990s to 2005, minimizing inventory was seen as a key to success. “The whole mind-set has been, ‘Let’s get rid of it.’ ” But that was when most prices were stable or declining. Today, he says, it’s not as clear that this is the best strategy.

In fact, some retailers may want to start holding much more inventory than they did in the past as a way to hedge against future price increases. “Of course … it’s a little risky to hold inventory that might [lose value], especially perishable goods and fashion-oriented goods. … But to the extent [retailers] know that prices will be rising over time, they will start to try to hold more inventory.”

Cachon also suggests that contracts with suppliers include some agreement on how to handle future price increases. For example, include fuel-cost adjustments “so that both sides are sharing the risk.” Company buyers, he says, can also look for more local products to cut down on transportation costs.

“What I expect is that sourcing from farther away becomes less attractive … because the extra transportation costs are now going to swamp” price advantages for many distant suppliers, Cachon says. As energy costs continue to rise, retail chains’ distribution plans are likely to be driven by fuel efficiency rather than labor or location of physical assets.

“I suspect that some retailers will start to consolidate their network, closing marginal stores because they’re too expensive to supply, given their [low] profitability,” Cachon says.

In addition, operations and marketing departments will need to work much more closely to successfully navigate the new environment. “There’s a lot of volatility right now, and with a lot of volatility … a retailer who typically runs with very small profit margins can go from making money to losing money pretty quickly,” Cachon says.

Ensuring that the company stays profitable “is going to require some experimentation and probably a lot of coordination between the two groups.”
The current volatility has shaken some major value-oriented retailers, who typically do well in hard times, says Wharton marketing professor David Reibstein. “For the Wal-Marts of the world, inflation is actually something pretty good, because so many customers are trying to figure out, ‘How do I save money during these inflationary times?’ And that takes them more and more to the value-based retailers. The Costcos and Wal-Marts and Dollar stores should be thriving during such periods.”

Squeezed by Lower Demand

However, this particular environment presents some peculiar difficulties. “The problem is not only that there are inflationary pressures but that aggregate demand is going down,” says Wharton marketing professor Leonard Lodish. “That’s why you see retailers like Boscov’s and Mervyn’s in trouble, because they may still be marking up their goods but there’s not enough demand to keep the stores full.” Both of those regional department stores recently filed for Chapter 11 bankruptcy protection.

Retailers typically try to pass through their costs by adding their margin to the supplier’s higher price. By itself, such cost-plus pricing can be a profitable strategy in an inflationary time if consumers have accepted the idea that prices are rising in a given category, such as baked goods, Lodish says.

A price hike to keep up with inflation may actually create more profit for the retailer, he adds. How? An item sold for $2 at wholesale nets 20 cents for a retailer who sells at a 10% markup. But a $2.10 wholesale item nets a retailer 21 cents at the same markup. If the retailer’s overall costs–such as labor, shipping, marketing and other products–remain static, that extra penny of margin can flow to the bottom line.

But with rising product costs and consumers worried about their jobs, marking up the price of goods becomes a delicate business.

“The smart way for the retailer to do it is to … raise prices a little bit here, a little bit there over time so that the consumer doesn’t have one big sticker shock,” says Wharton marketing professor Stephen Hoch. “In order to do that, the retailer has to absorb some of the pain in the short run and eventually pass it on down. And frankly, the manufacturers are trying to absorb pain too because … they don’t want to be the one that’s raising prices when their competitors aren’t.”

How much exactly is “a little bit?” In the past, most retailers have not known how to quantify the point at which price increases start cutting into demand. Now, business scholars are trying to work out more robust models to determine how much a price should be increased. Among them is Wharton marketing professor Omar Besbes.
He cites one study, which found that a good way to gauge the market is to test several different prices at once, ideally in different stores, and see how consumers respond. “This is a way to hedge against future changes in the market,” by enabling the retailer to develop a model to test how consumers will react to future price increases, Besbes says.

Hoch suggests that retailers try to promote sales in a product area in which prices have not increased. At the moment, prices of electronics and clothing have not risen but food and energy have. For grocers, he says, “a prime choice … is to emphasize their private-label goods. It’s their ace in the hole.”

Grocers typically put more emphasis on their store brands during an inflationary period as a way to offer the customer a better deal without cutting into their own margins, he explained. At the same time, pushing the private label keeps the pressure on manufacturers of nationally branded goods to keep their own price increases in check.

Retailers can also try to cut prices in an important category as a way to boost market share, as Costco (nasdaq: COST – news – people ) does by selling gas at a relatively low price. Others have cut prices as an opportunity for running promotions or special sales, recognizing that with their customers facing an inflationary crunch, “it might be an opportune time to run some deep discounts as a way to try to capture some volume,” says Reibstein.

Even specialty retailers that can’t make shifts between products quite so easily may find they can reposition their products to an extent. One example that Lodish admires: auto dealers that pitch the notion that now is a good time to buy a big vehicle because the discount will save customers more than enough money to compensate for the extra fuel costs over four or five years. “It’s crafting and putting the best face on the value statement that you’re making,” he says.

Other strategies for succeeding in an inflationary environment may require some counterintuitive thinking. While companies typically slash sales and marketing budgets during tough times, some studies have suggested they would do better to turn up the advertising volume, says Reibstein.

“Those that do not cut back tend to have much bigger returns for their marketing spend [in economic downturns] than during times of prosperity,” Reibstein notes. “And that’s a real surprise, because you would think during prosperity people have money to spend and you’re more likely to get a return for any of your marketing investment. … Most marketing spending has an impact basis–that is, how much you’re spending relative to your competition.”

So if the competition is buying less advertising, the merchants who spend more get a greater share of exposure. “Companies with enough cash to boost spending on marketing can use a bad time as a period in which to focus on gaining more market share,” Reibstein says.

Hoch warns that retailers shouldn’t overlook other aspects of their business, particularly service. “Retailers need to go out of their way to provide friendly customer service, because everybody’s going to be out there screaming value,” he says.

As complex as some of these adjustments might seem, Cachon is confident that retailers will adapt more quickly than in previous inflationary periods, such as during the 1970s oil shocks. He says retailers now have much more information because of bar coding and other technologies that allow them to track their goods from suppliers to the checkout line.

“Retailers are much more flexible and agile than they used to be,” Cachon says. “This [economic slowdown] is not something that I would expect to spiral out of control. … There will be some new winners among the retailers who can adjust quickly.”

Source: Forbes

On 1st August, we attended the TiE Retail Summit held at Sheraton Hotel, Saket where Milagrow conducted a panel discussion on “How Small will Become Bigger” and mentoring session.

The Indus Entrepreneurs (TiE), is a global not-for-profit organization, dedicated towards fostering entrepreneurship. TiE provides a platform for entrepreneurs, professionals, industry leaders, investors to interact with one another & forge long lasting relationships.

This time the summit was focused on finding out the challenges faced by the Indian retail industry and bringing out solutions through mentoring and knowledge sharing workshops.

I got a chance of attending the summit being a part of the organizing team from Milagrow which was altogether a great experience. In the morning, we reached the venue and set up the things for the panel discussion. The tent cards were placed and the standees were put up at strategic locations.

The summit started at 9 a.m. where the industry people shared their experiences and talked about the growing retail sector, the challenges and the way forward. Following were some key learnings:

v The rising consumerism and huge potential of the market will drive the retail sector in future.

v Small retailers do have an edge over Big Box Retailers in terms of better understanding of market, low operations cost, flexibility, customer knowledge and services.

v There is an increasing influence of Bollywood on the lifestyle of consumers.

v How product innovation and adapting to the need of local markets is important to modern age retailers and international players coming to Indian market.

v The retailers today need to provide “shopping with fun” experience to their customers in order to retain them as sustaining in current competition only on the basis of products is hard. The consumers seek a WOW experience once they enter a store which the retailer needs to provide.

v The organizations should be more process driven rather than individual driven.

Milagrow conducted a workshop on “How Small will Become Bigger” in which Mr. Rajeev Karwal along with Mr. Sanjay Sahani of Ritu Wears and Mr. Ashish Kapur of Yo China spoke about different strategies which small retailers should adopt to fight Big players.

The key points which came out of the session were:

v Location strategy is very important. Be where your consumer is whether it’s a high street or neighborhood market. The small retailers can also try kiosks as a good value proposition to retail their products. This can help them to reduce their operational cost as well as increase their presence and visibility across different locations.

v Plan years in advance as to where you want to open the outlets to get the best real estate price deals.

v Store Layout and Design should be such which is customer friendly and encourages browsing. The aspects like store atmospherics should be given due consideration to enhance the customer experience.

v Make your store a brand and enhance its image so that wherever your customer goes, he search for your store and buy your merchandise.

v Manage your manpower effectively. Selection of right people for the right job is the key. As retail is a customer facing industry, the employees need to be trained so that they can effectively communicate to their customers.

v Stocking the right products and having a proper merchandising plan in place is very essential to avoid the stock out or overstock situation. The customer demand and buying behavior needs to be tracked and the merchandise should be kept accordingly.

v Think unique and give your customers an experience and product/service which is unparalleled in the industry. This would drive the customer traffic in your store and gives you a distinct positioning in the industry.

v Venturing into online retailing haphazardly would not give fruitful results. Plan judiciously according to the product offered and viability of selling it online and then go ahead with it.

We also released a White Paper on “How small retailers are facing onslaught internationally” which talks about the strengths and weaknesses of small retailers as compared to big players in the industry, the strategies adopted by them and how they can improvise.

The workshop went very well and the audience gained a lot of knowledge on the topic. They got a lot of their queries answered in the QA session regarding online retailing, location planning, etc. The workshop was summed up by Mr. Rajeev leaving the audience with 10 point suggestions as to how small retailers can grow their business and be successful in their market place by capitalizing on their strengths.

After that, we had a mentoring session where the budding entrepreneurs seeking guidance were mentored by Mr. Rajeev Karwal. This session helped them to know their road ahead and how they should strategize it.

All of the sessions were centered on the theme of how to make one’s business a successful business proposition and were an eye-opener for existing and aspiring enterprisers as to how to conduct their businesses and make them successful.
Overall the TiE Retail Summit was a good learning experience and a great day for Milagrow!!

With India on the cusp of a retail revolution and discount stores riding high on the wave, the only way retailers can create moolah for themselves is having their “Private Labels”.

But the only caution for retailers is that there should be a clear understanding of what a Private Label strategy mean and what are the different types of labels which can compete in the market:

Store brands – The goods produced by the retailer himself, to transfer the cost benefits to the consumer are called store brands. The retailer’s name is very evident on the packaging. for eg: Shoppers’ Stop : STOP

Store sub-brands – Products where the retailer’s name is low-key on the packaging.

Umbrella branding – A generic brand, independent from the name of the retailer.

Individual brands – A name used in one category, this is only used to promote a “real” discount product line.

Exclusive brands – Again a name used in one category, but to promote “added value” products within the category.

Copycat private labels – brands owned by a retailer which use similar trade dress, i.e. packaging as a leading national brand.

Reference: The Free Dictionary
Wikipedia, about retail

By definition, or even by law, the phrase Maximum Retail Price (MRP) leaves little room for ambiguity. Under the Standards of Weights and Measures (Enforcement) Rules, 1985, charging more than the MRP is a criminal offence. The MRP Act, 1977, states the consumer should pay exactly the same price as printed on the packaged commodity, no matter where it is sold or served.

Yet, it is common practice for multiplexes, fast food chains and pizza delivery companies to sell products above their MRP.Domino’s Pizza, for example, rakes in 65 per cent of its revenues through home delivery, 50 per cent of which comes from the sale of soft drinks. It retails 600-ml Coca Cola bottles, which are not available at local stores, for Rs 30.

Consider this: in the market, a 2-litre bottle of Coke is available for Rs 50. That translates to Rs 15 for 600 ml, double what Domino’s is charging. However, Dev Amritesh, vice-president of marketing at Domino’s Pizza India, is unmoved: “We don’t charge above the MRP.” And he isn’t wrong, because the MRP printed on a bottle of Coke at Domino’s is indeed Rs 30.

Companies claim they are justified in charging more for the convenience of delivering hot, fresh food and chilled beverage at doorsteps. Should the price printed on the bottle be seen as the legitimate price? After all, how would a customer even know a product’s cost otherwise?At Delhi’s PVR cinema in Saket, a 750-ml bottle of Aquafina costs Rs 20. It works out to Rs 26.67 for a litre, more than 200 per cent above its MRP of Rs 12 at a local store.The catch is insidious. While claiming to charge only the printed price, the companies are printing a higher MRP. Legally, different MRPs for different packages of the same commodity are permitted under excise law.

This leaves the consumer confused and helpless.Sometimes, though, justice is served well. When popular Delhi-based food joint Nirula’s charged Ankit Jain, a student, Rs 35 for a bottle of soft drink, he moved the consumer court and won compensation. The printed price of the product was Rs 15. Most recently, in April 2008, a resident of Patparganj in east Delhi, charged McDonald’s with cheating him by selling him Coke at the price of Rs 30, when it actually costs only Rs 20.

The court reiterated that no retailer can charge its customers above the MRP.Nirula’s changed its policy since the court verdict. “We never charge our customers above the MRP,” says Ajay Khanna, vice-president of operations at Nirula’s. But McDonald’s hasn’t changed. “We have only 500-ml Coke bottles, and they have an MRP of Rs 30,” says a delivery boy at one of the McDonalds outlets in Delhi. “These bottles are especially made for us.”Five-star hotels are exempted from the MRP law. Most up-market restaurants feel that customers are not misled when charged more; they are aware they have to pay more for the ambience and the service. “The extra charge is not forced on them,” says a source from JW Marriott in Mumbai, not wanting to be quoted.One way to resolve the whole MRP issue, would be to,“stop buying drinks from such chains that charge more than the MRP”, says Arvind Iyer, a lawyer based in Mumbai. Still, a long-term solution is not forthcoming.

Source: Businessworld

According to a study on leading high streets of India by Jones Lang LaSalle Meghraj, shopping hubs like “Connaught Place and Khan Market (New Delhi) and Linking Road (Mumbai), are slowly but steadily creeping into the league of expensive high streets in the world”.

The report released on July 9 says that although the most expensive Indian shopping streets are nowhere close to rentals in 5th Avenue Manhattan (New York), New Bond Street (London) and Ginza (Tokyo), the rentals in these leading Indian high streets/ bazaars have witnessed significant growth in the last few years.

The rentals, which were at Rs 300 to Rs 500 per sq ft per month in 2007, have peaked to Rs 550 to Rs 850 per sq ft per month in January 2008, making them the most expensive shopping streets in the financial capital. As compared to this, even the plush shopping areas of Breach Candy and Colaba Causeway in South Mumbai have their rents starting only at Rs 350.

The report says that Linking Road, which has been operational since 1970s, has seen a transformation from clustered informal and small format shops to a street that has one of the highest brand penetrations. The arterial road has still retained its inclusive quality by integrating both platform shops and premium retail brands.

“The fact that it sits in the geographic centre of a linear and very wealthy city and within the cradle of neighbouring affluent residential areas has only complemented Linking Road’s exhaustive brand mix and integrated retail offerings, all of which, as a whole, have contributed towards its phenomenal success as a retail destination,” the report said.

The JLLM reports looks at 21 high streets across India. In Mumbai, it looks at how shopping streets like the ones along Linking Road, Breach Candy and Colaba have managed to retain their customer base despite the presence of about 41 malls in the city.

“With the coming of malls in 2001-2002, it was assumed that this is the end of high street retail. However the study shows that high streets has always been and will be an important component of Indian retail. In fact several international retailers also prefer these high streets as they feel that their brands get lost in a mall. Also shopping streets like Linking Road are slowly seeing a “pedestrianisation” of some portions on weekends,” said Shubhranshu Pani, managing director of retail at JLLM.

Source: Expressindia

Hina Saiya of Shop Imagine, an online lingerie store which went live in January 2008 and started shipping out products from the following month, says she is “blown away” by the response from the far off small towns of semi-rural India. “I had not even heard of these places from where we are getting our orders,” she said, adding: “Businesses have not tapped into this phenomenon of India’s women being able to use their financial clout and buying themselves some excitement and romance via this luxury, aspirational items.” Mr. Bang’s fresh fruit e-tail venture is seven-years-old.

He admits to selling 1-lakh mangoes during the short, two-three month season, with 90% of his sales being domestic, making it worth around Rs 1 crore from just one fruit. He has just added sitaphal and pomegranates, giving him fresh produce for at least nine months of the year. “We have three brands in mangoes starting with Bangoes, sitaphal goes under the brand of Capp and the red pomegranate under the brand anara,” said Prakash Bang and Sons CEO Mr Bang. Silicon Valley-based Ms Saiya and the Pune-based Mr Bang agree that gifting is what gives them volumes. Ms Saiya expected the Valentine’s Day effect to linger for a bit. “We were surprised that sales just kept on, long after Valentine’s Day. These items are mainly gifts,” she said. Since neither has an offline presence, all the action is on the Net and Ms Saiya maintains that it cost her a quarter of what it would have cost to set up one small shop in Mumbai to retail her line of products.

The average size of a purchase varies between Rs 10,000-20,000, usually comprising two or three items. “Retail is too daunting to enter. This way, with a portal, I can target the entire country, with an office here. We ship out from a central store in Bangalore, where goods ordered from all over the world are stocked,” she said. From concept to start-up took her less than a year and now, within a year of start-up, she plans to extend the product range. This venture is privately funded although she is open to external borrowings for the expansion.
Source: Economic Times