Tips to enhance your GMV
Are you an IITian who has forgone a cushy consulting or investing job to start your own company? Or, are you trying to achieve your ultimate purpose as an entrepreneur:raise money? Are you wondering how your classmate raised more money than you although you are smarter? Are you meeting investors who are making you feel inadequate by sharing the sizes of your competitors’ overgrown GMVs? Look no further. Here are five tips to enhance your GMV.
I am sure you have got the memo about being a marketplace and not an e-tailer. It keeps the regulators away and enables better GMVs. Take your fastest moving product, buy it from the seller at Rs 80 and sell it on the website for Rs 60. Your sellers and their buddies are smart enough to take turns to buy the product from your website at Rs 60, sell it back to you at Rs 80 and pocket the difference. As a bonus, this saves delivery cost because the inventory does not need to be stocked or even shipped. You can keep clocking GMVs as long as you keep paying sellers for buying their own products. Look at it as 3x return on investment. For Rs 20 of burn, you are buying Rs60 of GMV per transaction. It gets even better. Get a relative to become a seller. Then all family members can order and make their family rich in a collective effort. After all, what is a large family for. No need to sell your shares in secondary offerings to new investors. With cross-selling, investor money goes directly into the bank. No pile of paperwork, no lawyer fees, no dilution.
Rookies think coupon codes are great ways to drive first-time transactions, referrals and nth repeats. Experts say it is a way to get any transaction any number of times. All you need is a bug in the coupon code validation software. After all, one man’s bug is another man’s feature. A coupon code bug is a gift that keeps on giving GMVs. If you had given
your engineer 24 hours to come up with the feature in the first place, then they would have automatically authored a bug. If you work with couponing websites to get traffic, then your customers will find the bug even before you do. Just do yourself a favour. Do not plug the bug. Let the orders flow. If you are bottomline conscious, cancel all orders. Don’t worry, investors do not check for cancellations in your GMV reports. Hint: they don’t check if you have netted out the coupon code value either.MRP
Change the MRP of your highest grossing products and make them double of what they are, why even triple or quadruple. If you really want to do a good job of this, get your sellers to multiply the MRPs instead when they are uploading the products. If ever someone asks, it was their fault not yours. Define GMV as total MRP value of goods sold and not just total invoiced sales. Everything between MRP and invoiced sale is a discount, a capital expenditure invested in buying the asset of lifetime value of customers. Sounds shady? Stop being retro. Investors find it progressive. They love the way you think about investing heavily in your customer’s life. Every once in a while, your investor might ask you to report two to three times higher fundraise than the actual investment made. Don’t be all stuck up when that happens. Look at it as the MRP of your funding round which your investors bought at a discount. It is standard practice, just like treating MRP as GMV.
Why write code when you can write code to write code. Imagine a bot that orders from your app or website. Don’t know how to code? Imagine a call centre full of agents who do not receive phone calls from your customers because you do not have actual customers receiving actual products. Make them useful by ordering from your app or website. If bots and call centre agents are not enough to hit your targets, always trust the curiosity of your customers to order stuff for cash-on-delivery even though they are headed on a long vacationor just want to see if your service works. Do not make the mistake of verifying a cash-on-delivery order before it ships. What about returns, you ask? Let the
customer keep the item without paying cash. It probably costs a lot more to get the order back to its source and convert it back to live inventory.Make things up
All of this sounds too tedious? Does your head hurt with all the complexity of doing nothing about creating the right processes and financial reporting? Here is the silver bullet. Just make things up. Pick your favourite chart from Google search and come up with numbers that get to your desired target one or two months ahead of schedule.You will need that buffer because nothing goes right on schedule, does it? Make sure there are no rounded numbers in the chart. Use one of those visual tools that are used by the latest YC batch of Silicon Valley.
Not convinced that this would work? Trust me. Some of the best companies out there whom you probably aspire to emulate have invented some or all of these techniques to enhance their GMVs. Don’t worry about your investors. They love it too. It gets more investors. But what about the eventual investor? Your company is too small for them to take notice and do diligence on. The market is early and they are in it for the long haul. Besides, doing diligence takes away deniability.
Sar-chasm (noun): The gap between the humor in this article and your views about it. It is known to be different for each individual. If you do not experience such a gap, congratulations! You have either found a remedy for the pain called fomo that you feel in your chest or you are ready to be the next Indian unicorn.