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Gautam Kshatriya, CEO & Co-Founder, Upscalio has evolved a roll up E-commerce for the businesses. We talked to him about it. This is useful for the IT MSMEs to grow their business.
Explain the Roll-up E-commerce Model concept
E-commerce roll-ups such as UpScalio are building the next generation, digitally and analytically driven consumer goods giants. Instead of building brands from scratch, UpScalio partners with and acquires high potential brands that sell on marketplaces such as Amazon and Flipkart, then scales them up 5x-10x over time. Most E-commerce entrepreneurs face growth barriers in the form of working capital and challenges to hire a strong expert e-commerce team that is required to scale their businesses beyond a certain level. In the roll-up model, the company invests in such e-commerce brands, infuses working capital and brings on an expert e-commerce team to scale their business. For example, UpScalio’s team helps increase revenue through levers such as digital marketing, E-commerce storefront optimization, and demand and inventory planning to reduce stockouts. The experts are able to work on multiple brands, share cross-category intelligence and create synergies that lead to revenue expansion for each individual brand. They also enter into Joint Business Plans with marketplaces like Amazon & Flipkart and get favourable terms for ad spending and other marketplaces expenses which further helps the bottom line. Additionally, by centralizing e-commerce capabilities and other functions such as finance and supply chain operations, it is able to increase profitability of these businesses. What results is a house of brands made up of fast-growing and profitable businesses.
How can the businesses in non-metro towns be encouraged to use the Roll-up E-commerce Model?
The roll-up R-commerce model is a boon for E-commerce brands based in non-metro towns. Indeed, the roll-up value proposition might even be more attractive for those businesses based in Tier 1, 2, and 3 cities, where access to venture capital and working capital financing is more challenging, as is access to top notch talent. For UpScalio, it does not matter where these high potential businesses are based - if the brand has high potential, UpScalio would like to partner with it, and infuse it with working capital, expertise and enable supercharged growth.
Why would the E-sellers on Amazon and Flipkart allow a Roll-up E-commerce company to acquire them?
There are numerous fantastic E-sellers that have built great businesses on Amazon, Flipkart and other marketplaces. However, many realise that they need further capital and expertise to grow their businesses further. For example, they need further working capital to invest in inventory, especially around peak festival seasons to avoid stock-outs. They may also realise that they need additional capital and deep expertise in digital marketing - across multiple channels, such as Google, Amazon, Flipkart, Facebook and Instagram. They may need further expertise around optimizing their product display pages. They may also want to regionalise their inventory, so that they can deliver their products faster and more cost effectively to their customers. Getting this kind of expertise and warehousing & logistics infrastructure in place can be very challenging - indeed cost prohibitive for smaller brands. Plus, many e-sellers may have spent years putting money back into investing into their businesses, so might have only been able to reap very limited personal wealth creation benefits. That’s where companies such as UpScalio come in. Once we decide to partner a brand, UpScalio’s experts spend a lot of time and effort to deeply understand all the potential levers for revenue growth and profitability expansion - across category management, supply chain, E-commerce store optimization and digital marketing. These experts not only create a plan, but execute it - shoulding full operational responsibility, to ensure that the brand has all the resources to help it scale. Not only does UpScalio provide expertise, but it also provides capital. It invests capital in the businesses, but also purchases stake from the entrepreneur - helping him or her unlock personal wealth - rewarding them for their years of hard work. As the brand grows, UpScalio continues to buy stakes in the entrepreneurs business, at higher and higher values, thus continuously creating wealth for the entrepreneur. It’s a win-win proposition! However, when considering which roll-up the brand should partner with - they should consider both ‘hard’ and ‘soft’ elements. It’s of course important that the roll-up partner is offering the right ‘up-front’ wealth creation opportunity for the entrepreneur. But it’s even more important that they believe that the roll-up shares the same vision, and that the roll-up team has the expertise and commitment to grow the business. Only then should the entrepreneur be comfortable handing over responsibility for their legacy - the business that they spent years pouring their energies into. Only then would they be comfortable that their brand can scale rapidly and become a household name, and unlock significant wealth for them in the future.