Mumbai-based startup that enables artists to monetise content through designer merchandise and lifestyle products made revenue of Rs 1.3 crore in the last financial year.
Bored and keen to try their hands at something different, four friends working in Mumbai in 2013 decided to set up a poster and T-shirt stall at Mood Indigo, IIT Bombay’s cultural festival. The foursome — Shantanu Mahajan, Deepak Yadav, Akash Arun and Amogh Vaishampayan — was overwhelmed by the response and started contemplating setting up a company.
Since Amogh came from a family of artists, he felt their startup should focus on artists. His grandfather was a professor at an art school and his mother is an art professor. Through his understanding of the space, he realised that it is impossible to take your work to market as an independent artist.
Whether it is online or offline, it’s essential to set up stores and handle technology, operations and logistics, meaning the artist ends up focusing on other things than his art.
The team recognised that they could help independent artists and creators.
“We knew early on that we didn’t want to be another T-shirt-selling company,” Amogh says.
The four also realised that the way people consume art is no longer through a gallery or an exhibition. Online shoppers are now looking for products they can use every day, and want design and content that they can relate to. They saw a gap in what the creators were creating and consumers were consuming.
“That is how we, as Paintcollar, thought of bridging the gap by connecting art with lifestyle,” Amogh says.
They started by building a product creation engine, which is a rendering tool. The moment you upload an artwork on the tool, or to any of the product templates, the engine renders them to look like a final product mock-up, which is later sold online.
Initially, the team stayed away from the license merchandise model, as they felt this needed a huge upfront payment of a minimum guarantee sale. Also, this market has several players like The Souled Store, Bewakoof and others.
In 2014, the global merchandising industry was touted at upwards of $200 billion industry in markets like the US and Europe.
There are as many as 12 known brands operating in the apparel and merchandising space, including Jack of all Threads, Alma Mater, Socratees, Campus Sutra, No Nasties and Brown Boy (organic cotton merchandises), which are aiming at scale. In April this year, US-based Bioworld Merchandise acquired Indian merchandiser Voxpop.
Paintcollar’s model is a little similar to Freecutlr’s, where the platform promotes entrepreneurship by encouraging individuals to come out and sell out their designs.
The co-founders stepped into the merchandising world with the movie Shivaay, where they had to work on a few Shiva-themed designs. It was an experiment, but they got a great response at their stall at ComicCon Mumbai.
They soon bagged a merchandising contract for Baahubali from Black White Orange Brands (BWO). Speaking of the Paintcollar team, Bhavik Vora, Founder and CEO, BWO says that most merchandise is fan driven and when fans are looking to buy or sell merchandise, which tells the story in the form of a product.
“Fans have already consumed the brand on TV or movie, the product is an extension of that storyline. It was important that we partnered with someone who understood the brand and how this works. And Amogh and his team were passionate about the brand that they were work with. A lot of the designs that they gave were their own interpretations of Baahubali as a movie, which doesn’t come very often in merchandise wear. Paintcollar refreshingly brought in more ideas, which reflects in their products,” Bhavik adds.
On their part, Paintcollar chose this because of them access and it also offered the opportunity to create exclusive designs, which other merchandising models would not.
Speaking of the Baahubali experience, Amogh says,
“The licensing deal for Baahubali was with Black, White & Orange. They approached us and told us that they had a style guide with design references. We were asked to commission this to our designers and come up with unique designs for Baahubali. We knew that Baahubali 2 was going break records; we took our chance.”
The team claims that Paintcollar made a revenue of Rs 1.3 crore in the last financial year.
On-boarding artists was a challenge for the startup in the initial days. There were several platforms working on similar lines and artists found the margins thin and delayed payouts.
Paintcollar understood early on that artists needed 100 percent freedom and financial security. This meant creating a transparent payout system and mechanism.
There is a base price for every product, over which the artist adds a profit margin. The final price is the base price plus the margin and taxes.
“This covers our entire manufacturing cost, packaging, delivery and profit margins,” Amogh says. When the team first started, their margins were at 8 percent, which moved to 18 percent as traction on the website started increasing.
Currently, the highest selling products are apparel. Initially margins on apparel were low, but the team is looking at bringing the apparel printing machine in-house.
“Earlier the order would go to a vendor in Tirupur, Tamil Nadu; controlling margins was difficult,” Amogh says. Initially, the gross profit margins for apparel were at 15 percent, which have jumped to 35 to 50 percent, according to Paintcollar.
“The machine will pay for itself within three months. We aren’t into sourcing of fabric, we source readymade T-shirts and print,” Amogh adds.
When a customer places an order on Paintcollar, that one product is printed and shipped out. The artist is paid his or her dues once a month. This helped create a network model; some artists started earning well and onboarding became easier.
The team followed a curation system, which made it easier to weed out copies or replicas. Word spread organically within the design community. The team knew that there was a supply and market for designed lifestyle products in e-commerce.
Since it is a just-in-time supply chain, the team holds no inventory and does not need to set up an inventory cost for every single SKU. This gives the bandwidth to onboard a vertical inventory of infinite products.
For one year, from September 2014 to September 2015, the team worked on their product-market fit and onboarding artists. In September 2015, they raised their first seed funding of Rs 8 lakh from family and friends.
And in June 2016, the team raised an additional funding of Rs 50 lakh from angel investor Santosh Shetty, Co-Founder of Neev Technologies, and Apurva Agarwal, Founder of Universal Legal. The team today comprises 10 people.
During this time the team also ventured into plug-n-play merchandising. E-commerce needed heavy cost of customisation and, with little funds, it was difficult to push the brand out. But they got an opportunity through the YouTube channel – Being Indian, who were coming up with their channel, shop.ecommerce.com.
“We said we would deploy our technology to offer access to order data and customer data, and handle fulfilment. It worked as a customised version of Paintcollar for that platform. While they handled the marketing, content and logistics, we worked the backend and product. This helped us as it was our product and brought visibility,” Amogh says. It also reduced their cost of customer acquisition significantly.
It also reduced their cost of customer acquisition significantly. Exploring this line of plug-n-play further, Paintcollar in February 2017 realised that they could expand their definition of an artist to include YouTubers, comedians and others.
“Currently, we are the only YouTube-approved merchandise partner in India,” Amogh says. The team is setting up exclusive merchandise stores for larger players.
“For us, it has been a validation that the artist-fuelled business model works. Our highest-selling artist is a second year engineering student from Pune. Abhilash Baddha has sold over 1,000 products in the last six months and has earned a profit margin of Rs 1 lakh,” Amogh says.
The team is now looking at reaching out to their customer base and expanding the number of artists on the platform. The future looks exciting for Paintcollar, which promises to connect the dots between design and lifestyle.