Jugaad House: Our Final Take

Things aren’t as easy as they seem.

Imagine sitting outside your hostel when you get a call and get asked to join a team. That’s how “Shhhh” was formed. Shhhh was the name of our dropshipping team before Jugaad House (JH). We sat and thought of a name that was new and creative and at the time, Shhhh hit our minds because it has 2 common letters from all our names. We tried to get a domain, but the SEO was not looking so good. We needed to come up with a “Jugaad”. Enter Jugaad House.

Did you know the cost of jugaad.com is 84L?

Anyway, let’s start with the initial idea. On the day of orientation, Pratham Mittal introduced the concept of “impulse buying products” so we began our search. One of our team members; Lakshya, had the contact of a person doing drop shipping. He shared his catalogue, and we started shortlisting products. Looking at factors such as target market and AOV, we even tried combo products. Starting with ABC. No wait just AB. We A/B tested the shortlisted products and got our facebook ads account banned thrice because they say the third time is the charm. We got it on the fourth. Ran ads and kept optimizing. From this, we learnt that nothing is certain and in the world of business, there are endless possibilities to the uncertainties.

One thing we learned about Facebook ads was that the older the Facebook account the less likely the ad account is to get banned. So, once we started shortlisting the products we ran ads and the ones that gave the best outcomes in terms of the click-through rate are the ones that we went ahead with. Our first sale was a motivational bottle which was a set of three plastic bottles that had markings on them. We then went on to sell other products such as a bottle cleaning brush, moon lamp and other home de?cor pieces. The hot-selling product at this time was a plastic portable steam iron. We saw the first few orders and got excited and over the moon when we realized that we were about to start making money but then we realized that there's something called RTOs. Return to origin. The most hated word in the drop shipping community.

So, we started getting our orders in the first week and by the second week we already crossed 2,00,000 in revenue so we thought it was about time we'll make a profit, unfortunately, we did not realize that some of the products that we sent out in the first place will be coming back to us. So over time, we understood that certain products are more likely to come back than others we also learnt that some areas are more likely to return these products than others so once we got multiple orders, we would clear the zip codes that were not advisable by other drop shippers.

Following this, we would call up each one of those customers to confirm their orders. Most of these orders would come from tier 3 cities which meant that they were usually uninformed people that were looking to buy products impulsively. We can tell you a lot of funny stories including ones where COD customers open their products remove the product from its packaging put an onion in the place of the product and send it back to us.

One major learning that we got from all of this was that having a payment gateway reduces the RTOs that you have because when the product is paid for the product does not come back to its origin and the shipping price of the product coming back is not accounted for and cash on delivery products have an additional charge to them.

Talking to customers gives you a detailed insight; many people will not pick up; many will say that their kids accidentally pick their phones and ordered it; many will say yes to your face and return the product without a second thought; some people are relocating and don't know the address of their house; there are all kinds of people in this space and they're all your customers.

In the last few months, we experimented with a lot of business models. Firstly, starting with the obvious drop shipping model where we found someone who dropped shipped products and worked within his catalogue. Then as a team, we realized that we could bring down the numbers in terms of costing significantly lower So what did we do? We went into the markets of Delhi and explored their offerings. From watching street fights in the streets of Sadar Bazaar to walking the lanes of Chandni Chowk. We got a glimpse of what real businesses are on the ground in the markets that supply to various parts of India and the world.

We explored products from seasonal decorations like Christmas ornaments to electrical appliances such as a lint remover and heaters. Finally, we landed upon Bluetooth earbuds found a great supplier and negotiated reasonable prices for the same. We decided to pick up a lot and sell that and return once we needed more. So, this brings us to our second model which was holding inventory. We bought packaging material such as the Poly bags that you get your e-commerce products in. We would have to pack hundreds of orders a day so one fine day we decided to go to Yash Jain 's house.

A memorable experience for all of us would be walking out of this house on that cold winter night going on the streets near his house and finding a small Chai stall. There was a man and no one else to be seen around so we sat at his stall and asked him to play music he handed us the tea and I requested a post-it, I borrowed his pen and wrote down the revenue we had hit at the time and the four of us cheered knowing our numbers are starting to look a whole lot better.

We stayed up till 4 AM packing orders, making labels, and preparing the batch to be sent out the next morning. This brings us to our third model which was B2B orders. B2B orders are from one business entity to another so we found other teams in our batch looking to sell the same product and we supplied it to them adding a significantly lower cost. We started off selling 20 to 30 pieces of the product to one team per day and we had multiple teams at the time. The fourth model that we experimented with was the drop shippers. Just like the problem we were facing with RTOs other teams had the same issue so we became problem solvers and offered them a solution; we would drop ship for them using their labels, but they would not have to manage any of the inventory.

So now we try to pivot our products into fleece stockings. The winters just around the corner allowed this product to be ideal. Now we tried running ads for this product but realized that the call to action on our website was not getting us the desired results. We changed our marketing strategy and approached Instagram as a medium for acquiring customers. We posted reels using pre-existing user-generated content and boosted those reels to reach potential customers who were unaware of our page. This was a great trick because fleece stockings targeted women between the ages of 18 to 32 there were outliers within this age group, but the average fell under this bracket.

Women are less impulsive and more thoughtful with their purchases and therefore the percentage of the products returning to their origin was significantly lower as compared to the Bluetooth earbuds that we had sold. We realize that the average order value over time has significantly increased. Moreover, we got a better understanding of how marketing can be approached differently based on the target market the positioning and the population segment that is being looked at.

One funny thing we did learn along the way was how to build a Shopify website in a shorter amount of time.

We made a separate account for stockings because selling that on JH was driving away customers because the trust factor and authenticity were being challenged. Over time we understood the difference between Instagram and Meta directing the ideal target market or customers that are using Facebook versus Instagram the age category that they fall under and most importantly how to target them.

Our most recent involvement has been in the selling of high-ticket products such as sneakers and hoodies all falling under the fashion segment. The marketing approach that we used for this mostly revolved around word of mouth because a product that can easily be found and its first copy in the market can be difficult to authenticate for first-time customers.

Retaining these customers is much harder than for the low to medium size ticket prices. People are only willing to invest in something they desire for such a high price once they know that they're getting the deserved value for the product and given that we offered that, many trusted us.

There were many challenges we faced along the way, primarily repeating the calls to customers, and having those same conversations repeatedly was frustrating for many of the team members. We faced that challenge by delegating a certain number of customers to each group member which divided the work and reduced the strain on one person.

The major key change we've made in terms of marketing was aligning the strategy to the product and the target once there is an intersection between these three points, the product can have a higher chance of being successful. We stopped pumping money into ads because that would increase our customer acquisition costs significantly more than other methods.

Along the way, we learned different terminologies in terms of numbers that astonished us, from happy numbers such as the reduction in RTO percentage to the increase in impressions, the views on our Instagram reels, the DMs that we got following one reel, and most importantly the click-through rate that we had to our website from the Facebook ad call to action. Hitting financial milestones such as a revenue mark of 5,00,000 or 10,00,000 differentiated us along the way and motivated us to do better.

Our learnings in the past few months have been incredibly diverse but broadly they can be categorized into people and patience. So, the patience to deal with people and the patience to wait for the business to be what it is intended to be over time. We also learned that maintaining financial data is essential to have the right count of everything you're doing from one order worth ?250 to a delivery boy who is bringing you a package relevant to the business. Every transaction should be accounted for to have a transparent financial statement that is true to its outcomes.

We did get a lot of positive feedback from the product reviews that we requested from our customers and many of them returned to buy more products for their friends and family.

D-day!

Just like our pivotal journey, we pivoted one more time for the final drop shipping mela. We yet again experimented with another business model called consignment. Where we bought stuff from a vendor sort of on credit and then we would have to return the products that were not sold at the original price. This was convenient for us because we did not have to bear any loss however it meant picking up stock at a comparatively much higher rate.

Images of our happy customers bursting balloons in the drop shipping mela!

To an amazing journey,

Team Jugaad House.

Yash Jain Lakshya Jain Harshvardhan Singh Krish Goyal