This startup has been doing Rs 5 Cr business every month by liquidating mobile phone inventory
When Chinese mobile phone brand Gionee decided to discontinue its India operations in 2018, its distributors, retailers, and wholesale sellers were burdened with unsold stocks.
, an Ahmedabad-based B2B online marketplace, came to its rescue and helped in liquidating all its unsold inventory in a short period of time.
In a highly competitive, fast moving, and razor thin operating profit margin business of selling mobile phones, it is the unsold devices which causes the biggest problem for companies in this segment. EOL Stocks has been successfully solving this problem for close to three years now.
“I decided to do something about this and created a technology platform which could solve this industry problem,” says Apoorv Bhatt, Founder and CEO, EOL Stocks.
The core team of EOL Stocks
Apoorv has been in the mobile phone handset business for long and was also a channel distributor. Typically, unsold or inventory stock of mobile phone handsets accounts for around 10-15 percent of the total volume and any delay in liquidating these units eats into the profit margin and loss in working capital.
Apoorv decided to bring the buyers and sellers onto one platform where the unsold stock could be sold. EOL Stocks started as a bootstrapped venture in January 2018.
“There was no way one could sell these stocks in a structured or transparent manner under the value added tax structure,” says Apoorv.
Luckily, for him, the implementation of Goods and Services Tax (GST) in July 2017 gave the confidence as there was a single taxation structure across the country.
Besides the knowledge of how the mobile handset business works, Apoorv also built a strong technology platform, which combines big data and analytics to understand the demand-supply situation and top of it was the artificial intelligence layer, which gives valuable market insights.
EOL Stocks started meeting all the participants in the mobile phone business ecosystem and provided their value proposition of how they could help them in running their business profitably.
How it works?
According to Apoorv, India is a very complex market where brands, which are popular in metro cities, will not find any takers in other parts of the country. For example, EOL Stocks has seen that a brand like Tecno is highest selling mobile phone device on its platform.
EOL Stocks starts by curating the buyers and sellers on its platform and it takes utmost care that these are genuine businesses and there is no room for any kind of mis-selling.
At present, the startup has around 1,500 buyers and 50 sellers active on its platform.
Ever since it started its business, EOL Stocks has enabled businesses be it a retailer, wholesaler or distributor to liquidate their inventory much faster than before. For example, brands like Micromax, Karbonn, Realme or even Nokia may not find many takers in metros, but these brands are a big hit in other parts of the country.
EOL Stocks brings that connect between the two where an unsold stock in one geography is in big demand in another area. In the just concluded festive season, this startup saw very good demand from the North Eastern part of India.
Sharad Bhatt, CFO, EOL Stocks, says, “Earlier, it used to take 30-45 days to liquidate the inventory, but through us it takes just 24-48 hours.”
EOL Stock enables the complete transaction on its platform, which is available as a mobile app and a website version. Besides this, it also provides the logistics service in terms of shipping these devices.
The founder of EOL Stocks says they do not have any direct competitor.
Since its launch, the startup has been generating around Rs 5 crore business every month and is operationally profitable. In fact, in the festive month of November, it claims to have doubled its business.
On an average, the startup sells around 20,000-25,000 devices a month. The price range of these mobile phones starts from Rs 1,000, going up to Rs 12,000. EOL Stocks charges a commission on every transaction which happens on its platform.
“We upload only those inventories where we are confident that it can be liquidated in two-three days,” says Apoorv.
At present, the startup generates more than three-fourth of its business from the Western part the country, and plans to expand to Northern and Eastern region soon. It has also tied up with Tata Croma to help liquidate its mobile phone inventory.
“It is all about having the right model at the right price and at the right time,” says Apoorv.
Now, EOL Stocks wants to experiment to see whether this model of mobile phone inventory can be extended to other sectors like kitchen appliances, white goods, electronic equipments, and even agricultural commodities.
“The challenge remains the same across sectors of how to liquidate the inventory,” says Sharad.
EOL Stocks is now in the final stages of raising an angel round of funding as it wants scale the operations by 5 to 10x.
Apoorv says, “This business is all about trust and protecting one’s financial interest, and for a startup like us, we are not in the cash burn model.”