Questions

Below are the details of our business model. Backend. We have successfully created a strong supply chain of farmers in the backend and now are looking to create the front end. Front end. We operate in a tier 2 city like Cochin and below are the challenges and advantages that we have. Challenges 1. Consumers are used buying vegetables and groceries offline. The internet penetration is there but there is no big player who delivers online. 2. Consumers have developed a long relationship with the offline stores. Advantages. 1. We are able to offer the freshest produces within 2-3 hours of plucking from the plant to the consumer table. 2. There is a strong grassroot movement in the entire state for organic vegetables where media, government and consumer sentiment are at a high. We are trying to decide of whether we should work on a model of b2c or b2b model. In B2C we have a customer acquisition cost and an entry barrier. However there is a greater margin of profit. In B2B we are planning to sell the organic food products to the offline stores where they don't have a supply chain for this. Getting to work on a b2c model would take a long time including the logistics cost. In contrast a b2b model offers more stable revenues and lesser logistical headaches.

You answered the question yourself. It's B2B that you should target to get started, build traction, and plan for transition. Once you reach transition stage you could consider adopting an alternate business model, B2C, over and above your prevalent B2B model.

I understand margins will be low in B2B model, but then there would be savings in term of less customer acquisition cost, low entry barrier, and minimum logistical infrastructure.

I believe you must be well aware of Pune region being famous for exotic and organic vegetables. I have had experience with various companies there who are doing it both for B2B and B2C. Drop me a message if you feel hopping on a quick call could be of any benefit.


Answered 5 years ago

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