Latest posts by Vikram Dutta (see all)
- What Is The Best Form Of Exercise? - November 2, 2014
- The Science of Physical Fitness And Its Importance For An Improved Quality Of Life - May 11, 2014
- FolksVagn – Community Carpooling For A Better Life! - March 31, 2014
See all stories by Vikram Dutta
We all know of how recycling and reusing of material can help save the planet from getting warmer every passing year, eventually leading to a possible doomsday. One of the biggest source of pollution that has started to make its mark on the global map is electronics waste. With the booming of information technology and electronic devices being manufactured and bought at a electric pace, major steps are required to curb this problem for the betterment of humanity. Having done all the heavy talk about the health of our planet, how does electronics recycling, a platform to sell old electronic devices and buy refurbished second hand devices with warranty – all at the same place sound? Pretty interesting, isn’t it? Mandeep Manocha and Nakul Kumar, both engineers with an interest in waste management and recycling, have started ReGlobe.in to provide a platform to sell old electronic devices at good prices and buy refurbished second hand gadgets with one year on-site tech support. When you provide this kind of a service, you end up recycling the tens of thousands of electronic devices which would become a waste otherwise. Now that’s one by-product of a business that mother earth will smile upon.
We caught up with Mandeep and Nakul at their office cafeteria in Gurgaon and had the typical LifeBeyondNumbers style chat session where they talked about their journey, inception and current state of ReGlobe.in, future plans and lots more…
Mandeep Manocha: We know each other for 10 years now. We were together in college in Punjab University, Chandigarh. I did my chemical engineering from PU, and then my MBA from NITIE, Mumbai. I passed out from NITIE in 2009 and the market was pretty gloomy and I had no job. That was a reason good enough to start on my own (laughs…). Nakul and me both came back to Delhi in January 2009 and both of us did not have a job. We toyed with many ideas – solid waste, water waste, electronic waste. Then luckily we got a break with a major mobile handset manufacturing company. We worked with them as consultants and helped them develop their mobile handset take back campaign in 2009-2010. We helped them with designing the whole back end supply chain for, logistics and also the marketing for it. Both of us were together in it and we did for one and a half years.
Nakul Kumar: Moving forward, we realized that consulting is a business which is more like an outsourced workforce for these companies. In terms of building a business and growth potential, we felt we were not cut out for it. Also, it was a lot of paper work and reporting to people, and if we had to do that, we would take up a job. So we thought of taking the risk, we hadn’t taken risks till then in terms of monetary investment as consulting was purely knowledge based business. And that was the time I was about to get married, so there were two risks (laughs…). So after a lot of research we found a project where we recycled scraped rubber and tyres to produce oil. We did a lot of research and went to China and imported machinery from China and set up a factory in Faridabad.
Mandeep: And that business made a lot of good business sense at that time. The numbers were pretty good and we thought it was a good time to make some money. And that was a great journey. Setting up a factory from scratch in India is a painful task. We had no experience in that. First to raising capital going from bank to bank as we did not very rich fathers who could fund the whole project for us. We had to take a bank loan. And one bank where the Bank Manager’s daughter was doing masters in environmental engineering finally thought that the project made sense. Reason being no one else could understand how you could make oil from tyres.
Inception Of ReGlobe.in
We ran that factory for almost two years and made some good money there. Then we realized that scalability is an issue for a manufacturing business and that we didn’t want to continue that forever. It was a good time for exit because the business was picking up and very few people knew about it when we started off. So we sold that factory in September 2012, made some money and then went out around roaming for a couple months trying to figure out what we want to do next.
We didn’t find anything exciting and started toying with the idea of going back to where we started from, which is electronics waste management, buy-backs and take-backs. And we realized that now, after four years the scene is pretty different than what it was then. With the advent of Android platform phones, the life-cycle of these devices have come down to 8 months to a year. Plus Apple launching a new model every year means that people will change their handsets every year. And laptops as a traditional item has reached that life-cycle point where people have started upgrading or changing their laptops. And also the fact that people have become very comfortable with online buying and selling of stuff, which was in its very initial stages in 2009. So we thought why not give people a platform to sell their used products online, rather than finding someone in their family or friend circle or going to the local electronics market. We did some research on it and came across Gazelle, which is the biggest player in this sector in the world. Interestingly we saw that Gazelle would close 2013 with 100 million dollars revenue in the US. So we thought if gazelle can do 100 million dollars in US, we have a bigger market in India and no one is doing it. People were going to the corporates and institutions and buying back their old products from them, but not for people like you and me. We have to either dump it, give it to our house help or take the trouble of selling it in the local electronics market.
We wrote down an algorithm to get the correct pricing of all second hand products, which took a lot of time. Once the pricing model was done, we launched the ‘price calculator’ in February 2013, and started marketing the website. We had good traffic coming in to the site, people wanted to see what current worth of their laptop or phone is. After that to reduce the marketing cost, we decided to tie up strategically with people where this proposition makes a lot of business sense for them and get a lot of traffic by riding on to their traffic. The best way was to tie up with the major e-commerce players and get the traffic because people are coming there to buy new products. Anyone who is coming there to buy a new product might want to sell their old one. Secondly we wanted to tie up with Original Equipment Manufacturers (OEM), as they have already explored the idea of buybacks. And these things have actually worked for us. Now we have a tie-up with SnapDeal where we get a lot of traffic from. We have a tie up with HP India, where we do their buyback campaigns on ground. In the last 8 months from zero to 800 transactions per month is not a very big number, but it shows that this idea has a lot of potential. And if done in the right manner with the right amount of marketing and keeping the quality in place, this can grow to say 5000 transactions a month.
The Way ReGlobe.in Works
The whole thing works this way: you come to the ReGlobe.in > go to the sell option > select the device you want to sell > take a quotation with help of the online price calculator > if you agree to the price, you schedule a pick-up > the customer support calls you to confirm the sale > after you confirm it, the lead will go to the on-field technician > after confirming the pick-up time on phone with you the technician will come to your place, check the device and if everything is in place as you mentioned on the ReGlobe website while generating the quotation, he will give you the money in cash then and there, and get the paper works done. We have this service available in 4 cities now – Delhi & NCR, Mumbai, Bangalore and Hyderabad. And we buy and sell second hand laptops, mobiles and tablets.
Now that particular device will come to the central facility and will be comprehensively tested. Any repairs and replacements are done as required and once the quality test is done, it will go to the sales department where the 1 year on-site tech support will be bundled with the device, which means if there is anything wrong that goes in that product after you buy it from us, we will give you free service at your doorstep for a maximum of 3 times in the year. We have two channels of selling the refurbished products – one is on the ReGlobe website and the other is we have a dealer network in smaller towns. Those are the people who sell a lot of second hand products. They buy from us and sell them in their local markets.
The price in which ReGlobe sells a device is in effect at a 40-50% discount of the price for what it is available in the market as brand new, with the functionality being 99% similar to what you’ll find in a brand new piece. And that’s because ReGlobe refurbishes every device. And whatever device we find is not fit for refurbishing and selling, we scavenge its parts to use in refurbishing of other devices. In the end it becomes a zero sum game for the products and nothing is wasted, everything is reused. And we have a very big second hand spare parts market in India; people need a lot of screens, RAMs and hard drives, etc.
The biggest advantage of selling on ReGlobe is that you get the correct pricing of your device. If you sell it anywhere else, you will just set a price which might be too low and lose out on some money or maybe too high and lose the sale altogether. Either ways you are at a loss. at ReGlobe who get the appropriate price and you can sell it without any hassle from the comfort of your home. No need to receive 10 calls to sell it to one person as it happens when you put an advertisement on a classified website.
By February 2013, we felt this was going to work and decided to go full blast, and burn all the money we had made from our earlier venture (laughs…). As we have been taking risks from day one – we had nothing in our pockets when we started, not even a job – this risk seemed a very small one compared to what we had taken earlier. And since it was the money we had earned by our hard-work, we found that to multiply this money with a factor of 10 or 100, we have to re-invest it. There’s no other way. And in India, what we have seen with whatever experience we have, you do not get funding on your ideas or capabilities. You get funding only when you have shown that this thing works, the people will come and give you money. To reach that phase, you have to spend your own money. And that is what we did.
It’s a very exciting and challenging market and we feel we are in the right place. People will sell their old products and buy new ones. It’s all about pricing and convenience – and we are very confident that we provide a very convenient solution for anyone who wants to sell, and pricing is and will always be a very subjective matter. You cannot ever come to a right price which will satisfy every customer.
We are a very gross-profit positive company. We are not selling our products at a loss just to acquire customers. Our operational losses are there only because we don’t have the enough volume to sustain the fixed cost that we have; on the variable cost front, we are always positive. So at 200 transactions a month, we are at x loss, but as soon as we hit 300 transactions a month we will break even. And as we go over that, the company will make money. For any company, I feel, one year is not a very long time and we are pretty sure we will break even well before we complete one year.
Currently we are looking for expansion of ReGlobe. We want to set up our own refurbishing facility and bring all the refurbishing under our control as opposed to the current outsourced model. And we are also launching our pan India operation – in six cities we’ll have our own people and rest everywhere else we will send the customers prepaid shipping packages. So for example, if you want to sell a laptop, we will send you a box with all the packaging material. You have to pack it and our courier guy will come and pick it up. After evaluation of the product, you will get the money within 48 hours. So at this point, we are looking for some investment coming in. We have a very solid model and the demand for our service is established. We need to reach out more and get people from every corner of the country to know about our services. And to reach a milestone of say 2000 transactions a month, we have to put in money.
Do you have an old gadget lying some where in your house? May be it’s time to ReGlobe.