It had all the classic ingredients for a failed startup story – a first-time entrepreneur with no mentors, a slump in the market, and co-founders who quit before the business could kick off. But like all good stories, even this had a proverbial happy ending waiting around the corner. A bit of persistence and the founder’s never-say-attitude helped change the fortunes of Toolxprez.
A B2B marketplace for industrial goods, ToolXprez was founded to solve the problem of delay in procurement of industrial goods. From Eastman pipe wrenches to cordless angle grinders to digimatic dial indicators, Toolxprez has over 8,000 industrial tools listed on its platform.
Toolxprez, which is in its soft-launch phase and looking to launch officially in April 2018, uses technology to automate the traditional process of procuring industrial goods. Founder Sukin Shetty believes that technology brought in a transformational shift in consumer behaviour in India. Everything that was considered impossible to sell online – from furniture to fresh juices -- is being sold in thousands daily. “Better understanding of technology, easy access to it, coupled with the growth of the mobile internet -- all of these are driving the growth of the online consumer economy faster than industry predictions. But the B2B space is a different ball game, where embracing change is more complex. Hence the pace of B2B businesses taking the online route for their primary mode of business has been comparatively slow. Nevertheless, there is a shift and today a significant share of B2B purchases happens online.”
Sukin comes with over a decade of experience of working in the manufacturing sector as Head Production Engineer, Process Engineer, and related roles. In all of these roles, he faced one persistent problem – procuring industrial goods on time. Sukin says, “It would take a minimum of 15 days to procure even basic industrial tools, because of scattered vendors, unorganised offline distribution and manual procurement process.”
Seeing a clear market opportunity and because he had expertise in this niche segment, he decided to take the entrepreneurial route in 2016. He agrees that there are early entrants in this segment who have now made it big, but believes there is still an opportunity for Toolxprez to capture the fragmented smaller retail market.
He says, “Our bigger focus is on our online platform. But we are also an omni-channel business. When we mapped our customer journey, we saw multiple customer touchpoints as a necessity. So today we deal with customers who send us an enquiry on SMS as well.”
He explains that since they have a network of trusted vendors, they are able to not only work on a model that does not require them to stock inventory but are also able to fulfil bulk orders.
Being from a middle-class family with no entrepreneurial background, Sukin’s was discouraged from starting up. However, he was determined to pursue his dream. “I read articles, attended startup meetups and events and enrolled in Startup India programmes, to enhance my knowledge, network and stay motivated,” he says.
He got two friends on board as co-founders, and registered the startup as Limited Liability Partnership (LLP). He also spoke to manufacturers and wholesalers, who showed willingness to become vendors. The team also did a dip-stick survey that validated their solution. Just when they were all set for a soft launch, demonetisation was announced. Because several small businesses who were Toolxprez’s potential customers dealt primarily in cash, the team decided to wait and watch. When it looked the market had settled down, realigned itself, GST was implemented, prompting the team to further delay the launch. With what seemed like a never-ending delay, the two co-founders quit.
Sukin says, “Looking back, this was probably the hardest phase for Toolxprez, but it has worked out for the better. Today a lot of our customers are open to online payments which was definitely an exception and not the norm in the B2B manufacturing tools marketplace earlier. With GST, the uniformity of tax makes it easier for me to work on my expansion plans.”
During the pre-launch phase, Sukin continued to meet customers, expand his network of vendors, and work towards getting everything in place.
He also got two people to join his startup, and the team of three began working on building strategy, strengthening its business model, and continued to gear up for a launch. They did a soft launch on December 15, 2017, with a three-month target to generate monthly revenue of Rs 50, 000. The team was pleasantly surprised when we reached the target in the first month of going to market itself.
Since most online marketplaces are flooded with customer complaints related to poor quality or fake products, the startup wants to steer clear of such poor customer experience. It is for this reason that they have not given vendors the rights to upload their profile or products on Toolxprez. Once the vendor is validated, the Toolxprez team does all the backend work, so that they are aware of the products that are being sold and if they match the quality that Toolxprez promises its customers.
Sukin had purchased a Dell N5110 10 years ago, which is going strong even today. He says, “For me, Dell is a brand that stands for reliability, performance, and affordability. And my experience has shown that these are not mere catchwords from ads or marketing brochures.”
Having been empowered by Dell right from the concept stage, ToolXprez knows it has a budget-friendly and dependable technology partner at hand, as it works towards becoming India’s leading industrial tools destination online.
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