Flipkart Founders Sachin Bansal and Binny Bansal’s
Sachin Bansal and Binny Bansal are famous as founders of Flipkart. Many think that these two are brothers or related to each other, which is not the case. But it’s true in a sense that you are married to your venture and spend more time with your co-founder than with your spouse.
Sachin and Binny belong to the same place Chandigarh capital city of Punjab. Although they are not related to each other, it just happened to be a coincidence that they are now working together on Flipkart. They grew up in Chandigarh and went to same school yet did not know each other well. They went to the IIT in Delhi, where they studied Computer Science and that is where they got to know each other. They graduated from IIT in 2005 and took different jobs in Bangalore. Sachin joined a company called Techspan. Whereas Binny was rejected twice by Google before he joined Amazon . A year after, Sachin [who joined Amazon in 2006] and Binny quit [Sep 2007] to start Flipkart.
Sachin and Binny thought of starting Flipkart in the middle of 2007. They wanted to have customers that they could relate to like Indian market unlike Amazon which caters to the world market. They decided to build an e-commerce company. These two who knew nothing about business started a business out of their homes. They launched Flipkart in October 2007 with limited capital. They first started selling books since the risk of losing products in the mail is lower and also the cost of setting up an online bookstore is low. They started with two book suppliers out of 25 in Bangalore. According to the terms of the suppliers, each time they [Sachin and Binny] placed an order they should pay in cash. They used to pick the books from the suppliers, take them to their place, pack them and ship them.
Customer acquisition has become a big challenge for them. At that time their only philosophy was to provide good customer service to entice customers to return but growth was slow. They learnt Google Ad words from scratch and how to do SEO. First three months were very tough because they could sell only five books a day. After that business started picking up because of word-of-mouth. They could hit the breakeven point in six months. Till then it was only two of them working out of their homes. After six months they started on office with two more employees. One was to handle the operations and to pick up books and the other to handle marketing initiatives. By March 2009 the revenue of Flipkart was increased to 2.5 crores.
In the year 2009 they opened another distribution centre in Delhi. To their utmost surprise most of the distributors in India started recognizing them so it has become much easier to make new relationship in Delhi. Then they had multiple suppliers in Banglore, Delhi, Bombay and Calcutta. They also finalized some arrangements with international suppliers. Today they are working with more than 500 suppliers operating in five different cities.
They started with 35% margins on the (MRP) in 2007. Today they are getting around 40% to 60% margins based on discounts from suppliers. At first they used to pay in advance for all items. Today they enjoy a credit line of three to six months. Now they sell more than $1.128 million worth of books a month. They had 300 employees and soon may reach to 1000 within a year.
Sachin and Binny are illustrating a very Indian mentality by reinventing the wheel at every level. They believe in one philosophy of management that wants you to build everything yourselves and another philosophy that wants you to focus on what you do well.