In a recent founder workshop at Bestvantage Mumbai Startup Meet with Mitra, the founder, Mr. Abhishek Kaushik, shared his journey and insights on scaling a B2B business. He emphasized that while B2B businesses can be challenging, they become highly scalable and successful once certain hurdles are overcome. Before founding Mitra two years ago, Abhishek gained valuable experience working with companies like Canon. This expertise helped him grow Mitra exponentially. During the workshop, Abhishek discussed the transition from a trading model similar to Udaan, focusing on regional brands, to manufacturing essential products. He highlighted the differences between B2B and D2C (Direct-to-Consumer) models, noting that B2B involves building an offline distribution channel and understanding the nuances of product demand and distribution logistics.
Abhishek shared that B2B is fundamentally about offline distribution, involving wholesalers, retailers, and ultimately reaching the end customer. He explained that successful B2B distribution requires understanding who the customer is and why they are buying the product. He emphasized that knowing the customer is crucial, especially in offline distribution, where feedback often comes through retailers or distributors. Abhishek pointed out that while online distribution channels are important, balancing them with offline distribution is essential for comprehensive market coverage. He mentioned that Mitra has achieved significant success by delivering 16 crores of orders in the past 15 months, thanks to their robust B2B distribution model.
Abhishek also addressed common challenges founders face in managing working capital and credit cycles in B2B. He explained that it’s crucial to maintain a balance between procurement and credit terms. For example, if a company can procure raw materials on credit, it can extend similar credit terms to distributors, creating a sustainable cycle. He shared that Mitra started with a 10-day credit cycle and has now moved to cash-on-delivery due to high demand for their products. Additionally, Abhishek discussed managing inventory returns and contracts with distributors. He emphasized the importance of monitoring inventory and maintaining clear communication with distributors to avoid losses due to unsold or returned products. He advised founders to monitor distributor feedback and adapt their strategies accordingly closely.
Abhishek’s insights from the Mitra founder workshop provided valuable lessons for scaling B2B businesses. His experiences underscore the importance of understanding customer needs, managing working capital effectively, balancing distribution channels, and maintaining strong distributor relationships. These strategies have enabled Mitra to grow and succeed in the competitive B2B landscape.
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