Karan Gandhi is the Director of Operations at Boxed, which he started working for a year and a half ago after leaving his last position at Amazon.
The idea behind his new company is to sell large packages of wholesale products on the Internet, so that the consumer will not have to drive to a store, carry huge packages to his or her car, only to unload it again when the trip to the store is finished.
- The mission is to become the leading mobile first online wholeseller, the shopping trends are changing. I personally do my shopping when I am on my train home and that is the trend we see in our customer base. Many purchases come from mobile phones, Karan Gandhi explains.
The Products People Would Want to Buy
Boxed sells a wide range of products and everything from diapers to mineral water can be found in the online store. The typical customer is a household with a large family, someone buying for an office, or anyone who consumes a lot of a certain product, for example an athlete who eats protein bars every day. Some customers may also buy the large packages only to sell them again to a more expensive retail price in order to keep the profit for themselves.
- The idea that someone would want to buy a 12- or 24-pack of hot sauce is still fairly common in the U.S. People do buy in bulk, Karan Gandhi explains.
How do you decide what to put on your site?
- It is definitely more complex than it seems. There is a lot of intelligence going behind picking the product which is why we can sustain the business model that we have - cheap products but high sales. We try to ask simple questions like: is this a top product that the customer would want to buy? Is it something we can ship, and make money? And it has to come in bulk, we want to sell you a lot of each product. So what it leads to is a very limited selection with for example one or two selections of each product. Here and there we will add seasonal products like candy during Halloween, but for the most part it is products that I would not have to convince you to buy.
Karan Gandhi does not want to share any sales numbers, but he says the company has seen steady growth. From the start less than two and a half years ago, when Boxed more or less conducted its sales from a small garage, the company now handles a 200 000 square feet (around 18 500 square metres) warehouse, which Karan Ghandi hopes to double in size fairly soon. Boxed now has 68 full-time employees.
- This behaviour of buying whole sale items online which they were used to buying in stores is relatively new, but once you try it people come back. So reengagement is usually not an issue, Karan Ghandi comments.
"Amazon Can Grow in Any Field"
Before moving on to Boxed Karan Gandhi was an employee at Amazon, the largest online retailer in the United States. His position was with the company’s book team at the head office in Seattle, where he was responsible for developing new products for children’s books.
- It is no surprise that the company is doing so well. Every team and everyone there was extremely entrepreneurial and was really allowed to take risks. A lot of people fail and a lot of people succeed, and ultimately it leads to the company doing what it does. Now they can pretty much grow in every field that they want. I absolutely learned a lot about e-commerce, seeing what they do.
Can you give any examples?
- Sure. There are some golden principles in e-commerce that you don’t violate that I learned from Amazon that I apply now. Which is, you know, try not to ship in two boxes - you want to fill a box as much as you can, and search is great - but if you are searching the orders tend to be small but when you are browsing orders tend to be big since impulse buying kicks in. I learned especially operational skills because they are very good at that, but a lot of things are very different too.
Why do you think Amazon is doing so well?
- When you are at Amazon it is on you to come up with a business model and prove that business model. So everything that comes out that you see is quality ideas and you are like "wow - how do they always get that right", but a thousand people are trying and you see the two that succeeded. So they have already beaten 998 other ideas inside of Amazon and then when they come outside, naturally they are good.
Long-term profit is key
According to Karan Gandhi Amazon’s success is probably based on the fact that the company has a relatively flat hierarchy where you can shoot someone’s idea down if it is no good and at the same time help somebody else's idea forward.
But above all, whether it is opening a brick-and-mortar book store or hiring 100 000 people to handle Christmas sales, there is always a lot of thought process behind every new idea that is presented to the world. Also, Karan Gandhi says, Amazon is not looking at short term profit.
- It is not a charity, it is a business. But it is always about what the customer wants and them coming back to the site, and over time profit.