In this insightful discussion, Aman Preet, Founder and CEO of RockingDeals Circular Economy Ltd., explains how his company is reshaping the refurbished goods market by offering certified products, partnering with global brands and adopting innovative strategies to promote sustainability and circular economy principles.
Rumela Banerjee: Hi, this is Rumela Banerjee and joining me today is Amanpreet, Founder and CEO at Rockingdeals. The Delhi NCR headquartered re-e-commerce company enables bulk trading of excess and open box inventory and offering refurbished products. Thank you for joining us on SmallCap Spotlight.
You can start by telling us a bit about Rockingdeals, a unique name for sure. What’s the idea behind the name too?
Amanpreet: So we opened up Rockingdeals so considering we’re going to be offering great deals to our customers. I mean, we started with a concept where we were thinking of offering the best deals to our end customers, which were the best branded products at the best rates, best pricing that we could offer.
So that was the whole concept around it. And when we started, it was quite, you know, we’re more concerned about whatever is the best offer. We were not actually looking at anything else apart from deals that we could offer to our customers.
Rumela Banerjee: What got you interested in the pre-owned goods market?
Amanpreet: Earlier, I started doing my business with the regular brick and mortar store for Tata Delhi services. And then from there, we got into the distribution business as well of a lot of brands, global brands in India, majorly telecom. I understood that there was not much of a value add there.
So gradually we got into different categories as I had studied abroad and I traveled for many years of my life out of India. I understood there was something apart from the brand new business that we were all in, which was refurbished or customer returns or repair products. So that was, you know, the whole thought of doing something out of the box was the reason why we got into, you know, excess inventory, certified refurbished and pre-owned products.
Rumela Banerjee: The services you offer are the need of the hour. Could you give us an example of how it works from the time an e-commerce company contacts you?
Amanpreet: So if you talk about e-com, just e-com, when any website or any portal sells their product, anything and everything that they’re selling, there’ll be three to 4% spillage where the product might be, you know, the box might be damaged in the way or the customer might not like the product in the seven to 10 odd days that they have that return policy. All of those products get collected, they come back.
When they come back, they’re given to us and then we grade it, test it, make sure that they’re in the right condition before we sell them to our end customers. So the whole grading and pricing of that product is something that we work on and that’s where the value add is.
Rumela Banerjee: How does Rockingdeals make money? What sort of contracts do you enter into with companies who come to you for managing their excess inventory?
Amanpreet: So there are a lot of contracts that we’re in. Any brand that we talk about, the need of the hour is that because they’re so much into distribution and they are so well, you know, the biggies like Bajaj Electricals and many others, they have the best distribution models and they have the best inroads to all the tier two, tier three, tier four towns also. They do not want their excess inventory or anything that’s seconds to go to those retailers or those dealers so that, you know, their distribution model or their regular trade gets disrupted or they face any problems or issues there. So what we do is we go to the end customers, tell them the condition of the product, that their excess inventory or their seconds or something where, whatever the exact condition of the product is so that the trade doesn’t get spoiled.
So that’s the need of the hour for all of these brands and they’re very happy dealing with us because we’re very ethical in our trade practices and what we do. So we do not spoil the distribution model and we do not give any, there’s no problem in their, you know, from the regular distribution or regular trade that they do.
Rumela Banerjee: Considering you are in the inventory management business, your warehousing facilities have to be solid. What sort of square feet and cost model do you have?
Amanpreet: So as of now, we have three warehouses, majorly in Delhi NCR, which is Faridabad. We are somewhere close to about 60, 70,000 square feet here. Plus we also have another warehouse in Guwahati, which is supporting our partners and our trade partners there.
So overall we have somewhere close to 60 to 70,000 square feet all over. From where we bring in the inventory, we grade it, test it, and then we sell it to our partners or our end customers.
Rumela Banerjee: You’ve entered into a joint venture with UTC Digital Technologies for reverse logistics training, et cetera. Could you tell us a bit about that?
Amanpreet: So UTC Technologies is majorly into, it’s a tech company which gives technology support to all of the OEs in the country, like Samsung, LG, and many others. So if any customer wants to trade in their large appliance, they use their tech through these websites. They have a handshake on their own portals.
So anything that you want to trade in, the old products come back in, which we grade and we sell. So that technology to get into pre-owned, I mean, we’ve done this business for a very long time. So we’ve understood that we’ve been a part of a lot of the trade-ins and upgrade models for a lot of brands where we were the first ones to even sign up with the biggies in the country.
So we understand the quality of the product is very, very crucial. And technology is very, very crucial when we talk about trade-ins and pre-owned and all of that. So as they are, they have a handshake with these brands.
The quality of the products that we get are very, very good because they’re coming directly from the customers. There’s no, it’s direct from the customer to us. And then our tech is used.
So the whole grading and everything through the tech is all done through the software that we have. So the whole relationship there is pretty good. And then we feel that this is the right way to get into the pre-owned business where if you’re interacting with the customers, you need great tech and the right product so that you do not lose money.
Rumela Banerjee: To what extent is the market for excess inventory absorption formalized? Usually it’s unorganized players that come pick up the excesses, right?
Amanpreet: It is a very unorganized market in India right now. But then as we have been doing this for a very long time, gradually the brands are understanding that they have to organize this because if they want to maintain their brand name and the brand image, they need to have an organized way, an off-price retail partner. And off-price retail globally is a 350 odd billion dollar business.
So India is quite far from that. But then if at all, there is a brand which guarantees that the products that they’re selling are all legit and they’re all original. And they’re going to the end customers.
So India is quite far from there, but it’s getting organized at a slower pace. But then we are one of the oldest players in this and we are working very hard towards making it more organized in the country. It will take a lot of effort and time, but then we’re working very hard towards that.
Rumela Banerjee: What sort of margins do you earn from a refurbished product, especially electronics? Considering the costs that go into restoring it to a new-like condition.
Amanpreet: So refurbished or certified refurbished products that we do, even seconds. Overall margins we work on is somewhere between 30 to 35% gross after working on the whole grading of the product.
Now grading is like if the product is grade A, then the price that we sell at is a higher price. But if it’s a grade C, grade C would be scratchy or a little dense. So that’s where the pricing and the rates are a little different.
And that’s how the whole formula and the whole mix is where we make money. Because grade A will make you more money and grade C is going to make you less money. But then converting a grade C product to a grade B or grade A also gives us… That’s the experience that we hold and we’ve been doing for a very long time. So it really gives us more profit there as well.
Rumela Banerjee: Any interesting exclusive brand tie-ups we should look out for?
Amanpreet: We just signed up, just a month ago, we just signed up with Fab India. So Fabindia is going to be selling all their excess inventory through us, Rockingdeals.
Also, we have just done an exclusive agreement with Live Pure for all their water purifiers, the refurbished water purifiers. So we exclusively have that. The first shipment just came in yesterday and we’re seeing great traction there as well.
We’re talking about 30,000 units every year that they’re going to refurbish and we want them to be sold.
Rumela Banerjee: What is the market size for refurbished products in India? How do you see it grow?
Amanpreet: Overall, the circular economy as a whole, it’s a $2.1 trillion business globally. If you talk about India, the whole circular economy would be somewhere close to about $350 odd billion.
Now, there’s a lot of excess there as well. There’s a lot of the refurbished in seconds as well there. But actual refurbishment happening in India is not much.
Majorly, it’s more of the excess inventory, which is somewhere close to about 70% to 80% of the total business.
Rumela Banerjee: What are the common challenges you face in the course of business?
Amanpreet: The biggest challenge that we face is people selling fake or people selling imported products which are not original or they’re copy or so the biggest challenge is that because we see a lot of those dealers and shopkeepers who showcase X product. But when you go and you try to buy it from there, you see Y which is not even original or its first copy or something like that.
So that’s the biggest challenge counterfeit. But I feel that brands are getting stringent about their laws and it’s going to get much better in the coming time.
Rumela Banerjee: If you could also throw some light on the barter vertical in your business.
Amanpreet: So there are a lot of dealers who buy a lot of inventory, which is an excess. And there are a lot of partners across the country. There are a lot of companies which are also into mainstream barter, which is to do with marketing initiatives that you buy advertisements or you buy ways to advertise versus the inventory, the brands give them inventory.
And there’s so many people who are doing this and they have a lot of inventory, which they have. So we have partnered with many players like that in the country and anything that they have in excess that they’re not able to move, we buy it off in exchange with the inventory that we’re not able to sell ourselves. So it really gives us a lot, the movement of the inventory is quite fast and it’s quite big.
Something that we’re not able to sell and something that they’re not able to sell, we exchange that. We get new inventory for our customers, which are at right prices and new offers, which the customers are very happy to do. So overall, the whole business of barter has been very, very good for us and we’ve been seeing great traction around that.
Rumela Banerjee: And who is your competition in this business?
Amanpreet: In organized trade, I don’t see anybody being a competition. Off-price, retail, there’s nobody. When you talk about the categories that we’re doing or we’re dealing in, we don’t see anybody who’s actually off-price, retail kind of a brand.
But overall, if you talk about the circular economy, there’s so many smaller parts there. We have e-waste and you have excess inventory, then you have certification of the products and all of those things. There might be players in the e-waste line, but then overall, if you talk about off-price retail, which we are very strong in, there’s nobody which is ethically doing this in the country.
Rumela Banerjee: How do you think the Live Pure Partnership can impact your revenue?
Amanpreet: So the whole conversation is about, so they’re into, if you’re aware, they’re into the subscription model where they give their water purifiers to people across the country on subscription model, whatever they’re able to, whatever they collect. It’s actually a circular economy initiated that both Live Pure and Rockingdeals has done and we’re very happy and very proud about it. So anything and everything that the customer gets out of their subscription models, if they get out of that agreement with the brand, all of those products come back in.
They change all the filters. They do all the refurbishment themselves. They make sure that it’s all with full warranty and installation guarantees and all of that.
So once all of that is done, then they give it to us. And then we, being their exclusive partners for the country, we sell it to our end customers and our partners and our B2B channel and all of those channels that we have. So the good part is that it is, there’s not much difference between, there’s no difference between a brand new or a refurb product because the warranties are all the same.
The product is totally new inside and there’s also installation, free installation, which is given to the customer. So overall, if you look at it, it’s a win-win and it’s a total circular initiative from the brand, which we are very happy to partner with and they were very excited about the whole journey as well there.
Rumela Banerjee: Also, any specific strategy to achieve the 100 CAGR growth for the next three years?
Amanpreet: We’re working very hard in terms of tying up brands. We are, you know, it takes time to get an agreement or a tie-up done because there’s a lot of paperwork and there’s a lot of hand-holding that has to be done because a lot of the players, a lot of the big brands, they’re not actually doing this business. They have many, many vendors who are not very ethically doing this. So to get into contracts and to get into agreements, it takes time.
So even when we are looking at our overall growth or we’re looking at our overall journey, we are very bullish about the types that we’re doing and the business that we’ll be able to do. Just by one agreement, like you said, Philippe, it’s somewhere close to about 30-odd boxes that we’re talking about. They’re going to refurbish and give it to us.
That’s somewhere close to about a minimum of about 20-odd crore rupees of business a year. Like that, we have many other tie-ups, many other brand alliances also. There are many others in the pipeline as well that we’ll be updating you and we’ll be letting our, you know, customers and investors know.
So we’re looking at a lot of tie-ups coming in and we’re in talks with a lot of brands to close a few solid milestone tie-ups that we can have.
Rumela Banerjee: Let’s talk about market reach. Where are your stores present? Do you sell online or is it mainly via brick and mortar?
Amanpreet: So in 2015, we were a 100% online brand. We were, you know, doing double the business that we’re doing right now because we were doing 100% e-com and 100% we were doing mobile phones. Post that, we understood that the mobile phone business is not very, it’s not a profitable business. So we ventured out of it.
As of now, if you talk about the overall business that we’re doing, we have company-owned stores from where we try to showcase the products to our end customers. We have franchise stores that we are, you know, opening up in many areas. We just opened one in Himachal, Lung Lai and many more are in the pipeline.
We want to be present in all the tier two, tier three, tier four towns majorly because the reach of these brands and the reach of these products there is scarce. So people want branded products at the right prices, but they’re not able to get them. So because our line of business is such that a person would want to touch and feel the product, we need to have brick and mortar stores because like, you know, like I always say, and if you see a great deal online, you’ll be very sure that it’s going to be a fake deal or it’s going to be something which is going to be, you know, which is going to be a fake, fake product or something like that.
So the more and more brick and mortar stores we have in tier two, three, four towns, the more people feel our products, they have confidence in us. And then gradually e-commerce is also going to grow. So now our focus is big time on e-com.
Our site is ready. As we speak, we have started getting a lot of traction. We’re starting to get a lot of, you know, we’ve started working very hard on that now because we see e-com for the reach that we have. If we’re able to supply these deals and offer these products to our customers throughout the country, it’s going to be a win-win.
So our dependability on e-com was not even 1%, but now we are looking at at least 10 to 15% of our total business to be e-com in the coming two quarters.
Rumela Banerjee: In the last two years, you’ve gone from 14 crore to 50 crore. What has contributed to this stellar growth?
Amanpreet: More and more, I would say, more retail stores, more brand types, and we’ve seen great traction. And overall, the more reach that we have, the more brick and mortar stores that we open, the better business that we’ve seen over the years.
Rumela Banerjee: All right, time to wrap up this discussion. Many thanks for your time, Amanpreet. And thank you for watching. Hit the subscribe button and stay tuned to SmallCap Spotlight.