Starting an e-commerce business in Germany with Viswatez Repakula
What is it like to run an e-commerce venture? What are the requirements and how does one set it up in Germany? Viswatez shares his experience of building his e-commerce brand Sattvii and gives battle-tested advice to aspirants.
Whether it’s to support income from a day job or to become a full-time entrepreneur, many of us dream of starting our own business someday. So, today on India2Germany, we speak with Viswatez Repakula, who founded Sattvii, a brand that sells environment-friendly stainless steel lunch boxes that are also TÜV certified on Amazon and on their own web store. Viswatez tells us about his inspiring journey, how he set up and grew his business, how he manages the responsibilities from his full-time job, family and his business, and gives some excellent advice for those aspiring to start their own e-commerce business in Germany.
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Also have a look at our step-by-step guide to start selling on Amazon:
Dr. Paras Mehta
Hi Viswatez 👋 Could you tell us a bit about yourself?
Sure. I came to Germany in 2003 to do my master's. I studied at Hochschule Furtwangen University. I did my Master's in Business Consulting. Currently, I'm working as an IT-Project Manager at Dr.-Ing. h.c. F. Porsche AG. So, I have a business, as well as a technical background.
Working as an IT project manager at Porsche must certainly be a demanding job. But in addition to that, you also run a small business on the side. Could you tell us why you decided to start an e-commerce business?
My primary motivation has always been to have my own business. Because no matter how good I am, at my job, the whole knowledge which we gain in our job stays with me alone. And if something happens to me, my family cannot start off with my job in any way possible.
A job cannot be transferred to the family as a legacy.
And this is the primary reason for me to always think of having a small business so that if something happens to me, my wife, or kids or my parents whoever it is, they can take it over. It doesn't have to be taken in a negative way. But let's say if I'm sick, or for whatever reasons it is, then, you know, business is always a viable option. So, I've been always thinking about this.
Traditional business will always require us to be there in person - we should be talking to people, and it cannot be done on the side. A traditional business is always very demanding, physically. So this is the reason why I wanted to go into e-commerce, so that I can say, Okay, I can work on it alongside having a family and a job.I can start off something in e-commerce by working on it in late evenings and when everything has settled down. So this is the reason why it took me more time to establish, more time to do research. But it did work in the end, so I can actually maintain both a full time job and the business on the side.
The rules do not differentiate between an online business and a traditional business. The amount of work which we actually put in also doesn't change. The only thing which actually defines the difference is when can you work. A traditional business will demand that you have to work in the daytime, you have to be there in person, whereas e-commerce will tell you - you can do it in your free time. You can do it in the night. You can do it in the late evenings. It doesn't have to be on a fixed time schedule. And it can go slower. It's also fine, but it can still be done.
Looking to start your own e-commerce venture? Get expert input from Viswatez and maximize your chances of success:
Dr. Paras Mehta
What is your e-commerce business about?
My e-commerce business is all about sustainable and high quality lunch boxes that are made out of stainless steel. This is not a new concept for us Indians, but this is a very new concept for Germans. Here in Germany, they have been using plastic boxes for very long periods of time. Whereas as Indians, we grew up with stainless steel lunch boxes. We took them to school, we took them to college, so we know them very well. And we are also very fond of food. So that gives us a very good knowledge about the stainless steel market.
Brandeed
We also started off using only plastic boxes when we had kids, but especially the fruits, they smell really bad in the plastic box and my wife complained a lot about this. I don't want to give food in a plastic box to my kids. And because it smells of plastic. So then we thought why not go the traditional way. We took the stainless steel lunch boxes to school ourselves, so why not buy it for the kids. And then that's how we started our research, and then found out that the existing quality of the lunchboxes was not good enough. We wanted to do e-commerce business on our own anyway. So I think both ideas and approaches came together at the same point of time in our life. That's how we started to collect data like is it sustainable? Is there enough demand? Are there enough users actually searching with that particular keyword? And all those things. And there was also another small emotional requirement from our side that we wanted to build a Made-in-India brand. So I think everything came together at the right point of time.
What kind of lunch boxes do you sell?
Yeah, we have different models and different sizes. We started off with a very traditional Indian style lunch box with two layers. And we then launched different kinds of sizes because people do not want to always take the big box with them. And there was feedback from the customers that our boxes were not leakproof. So we started off launching steel lunch boxes which are leak proof. So, we have a combination, we have a traditional stainless steel lunchbox, which is not leakproof, but which is more suitable for Indian food because then you can have like rice and curry in different layers. And we also have leakproof lunch boxes, which are single layer, but still they have dividers in them, where you can put different kinds of snacks or yogurt or something.
How did you come up with this idea?
So, in e-commerce, either people can open their own store or the other way is to choose a traditional platform, like an Amazon or Ebay or Etsy and then open up a small store there. From my experience, I can say that opening a store on Amazon is much easier than opening a traditional store, because for starters, they don't have to market on Amazon; people come there to buy products already. And there are enough softwares like Jungle Scout, where you can analyze the data from Amazon and can see which kind of keywords are coming, which kind of keywords will perform nice, if there is enough demand, and if there are enough suppliers on the market. How is the competition performing? How has been the trend in the last one or two years? Is the trend going down or going up? And all those things. So, with this kind of browser plugins, which are enough in the market and there are enough tutorials on YouTube. There are also a lot of webinars, which will guide you step by step. So, we can make a very rational decision.
Emotional decisions do not work well in business. You have to go with the data to see what is happening.
And you should also know how much competition there is, if there are already 20 people in this market and it is full, then probably it's not a good idea to step in. But this data is available, there are enough plugins that are really good, this market has been stable for about 13 years. The softwares has been very stable in this regard, it's not a new concept. So, we can go ahead and buy the plugin, see the data and make a good decision out of it.
What is the process like for setting up an e-commerce business?
I think we can go with a chronological order where it will be much better.
- So first, I wanted to start a business but I did not start because I wanted to make sure that I have a product in the hand. So, I got a plugin (Jungle Scout), I went through the data, I made sure that there was a market gap on which was a viable financial option to step in.
- Then I went ahead and searched for a supplier. There are also multiple portals. Alibaba is very famous, but it is mostly for the Chinese guys. If we are talking about India there is indiamart, globalsources and there are many other websites where we can go and search for suppliers. We talked to many suppliers and then finalized one and got samples from them. We saw how good the quality was, how good his communication was, could he supply us in smaller quantities, larger quantities, how would they handle the demand?
- Upon finalizing one, we thought of a good branding name for us. We wanted our brand name which will inherit from Sanskrit. So we chose a name, we got the logo designed, we got the packaging designed, we went through all the legal procedures around what should be done on the packaging? How should the barcode be?
- Then we decided to legally register a company.
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How does one register a company in Germany?
This process is independent whether you want to do online or traditional business. I would also like to state that as an Indian you really don't need a German passport to be able establish your business. A residence permit is more than enough to start everything you want. The process of establishing a business is not really that easy. But at the end of the day, there are enough companies who will help you through this. I did not establish a business on my own going through all the tax forms, you know, all the government office legislations and all those things. For example, there is a company called firma.de which offers consulting packages. So, you buy one package and they will do all the legal stuff which is required to establish a company for you. So, I bought a package which covers all those.
To explain, I think we can compare three countries here - Germany, India, and the US. In India the terminology is Private Limited. The equivalent of this in Germany is a GmbH. It is also known as LLC in the US. There is a mini version of this GmbH in Germany, also called UG (Haftungsbeschränkt). It means if you want to establish a GmbH, you need 25,000 euros of capital, whereas if you want to establish an UG, then you don't need this capital, you can also start with 1 euro. So, if someone wants to start a company but they don't have the 25,000 euro capital, they will go for the mini version. But the mini version of GmbH, they have a restriction that you have to set aside 25% of your profit. You can't take it out, you have to assemble this 25% of the profit until it crosses that 25,000 euro capital, so that you can become GmbH one day.
How does one start selling on Amazon?
There is no complex process. The complexity lies in just establishing the company. Once we go through this, it's just an account creation on Amazon. After creating the company, you will get an update on your own store ID, import customs number and all those things. Once those legal and financial stuff is cleared, you can just open an account in Amazon pretty easily, like probably in 10-15 minutes. But the verification will go through, so they will verify all the IDs with the tax department and customs department on all those things, which might take some time. But after that, your account will be active and then you can create a listing, you can enter the barcode, you can create an inventory and all that.
As a seller, I send all my lunch boxes to Amazon directly. So the program is called Fulfillment by Amazon. So there are two programs from Amazon. One is Fulfillment by Merchant and the other one is Fulfillment by Amazon. The difference lies in who exactly is fulfilling your order. So, in the fulfillment by merchant case, it will be on my side, I'm responsible to take the order, then have a contract with DHL or anyone. And then I should send the box and I should handle the returns. On the other side, Fulfillment by Amazon, Amazon will do this all for me and charge me for that service. So I took the Fulfillment by Amazon option because I don't own a warehouse and I don't have a contract with DHL, etc. So I send all my goods to Amazon. So, when you order the lunch box, Amazon will get the order, they will go to their own warehouse, pick and pack the box and then send it to you. And if you don't like it, you will also send it back to Amazon.
If you choose to be fulfilled by Amazon, there will be inventory quota as per seller level, e.g., if you are a beginner, they will allow you to send let's say 200 boxes, and then they will see your sales history and then say okay, you are selling good, then next time you can send 1000 or something.
Your lunch boxes are certified by TÜV, which is a Certification Authority from Germany. Why did you choose to go for the TÜV certification?
I wanted to go through the certification because our product has contact with food, people transport food in the box. It was important for me to make sure that the material is not spilling out any kind of chemicals into the food. So I went for the LFGB certification. TÜV is a German company, but they have branches in Bangalore, Bombay and everywhere. So we sent the boxes locally to the office in India and then we wanted them to do a test. So the test was very good. And we were given a certificate that there were no chemicals involved that will be transferred to the food, there is no odour transfer, so the customers can be sure that transferring food in our container is actually much healthier than transferring it in a plastic box.
How much did you invest to start the business?
We started off with like 10,000 euro of capital. Obviously you also need more money to invest after you finish your first order. But that happens everywhere in every business. So that is not unique to me. But I chose 10,000 euros because starting off with like 10 boxes or 50 or 100 boxes won't be enough because you will not have enough data to see whether you are doing good business or not. So you need a certain amount of starting capital to make sure that the supplier will also accept your order because if you want just like 20 boxes, he will say you are a one time customer and he will not have enough value. He will not do a unique design for you, he will not do the product packaging for you. In the business world, it is important to go with a big order to the supplier to make sure that he will take you seriously, that he will take your requirements seriously. He will also do the custom design for you. This is where the most probably most newcomers will end up having problems. Because they will say, I cannot take the risk, I cannot order 1000 boxes without knowing if I'm going to sell. And he will say, then take the standard products, I will not do any custom design for you. So, this is a big conflict, this is a conflict which is there everywhere in the world, it has nothing to do with India or Germany, you can go to any supplier wherever you want, you will get your custom design, you will get your custom quality, whatever it is, only if you make a big order.
How much time did it take to get your first sale?
The collection of data, choosing a platform like Amazon, going through all the legal formalities, and then other things, it took about one and a half years. So we started off the research, like in early 2016. And then, by the time we established the company, it was already September 2017. And once we established the company, we also have to wait for all the store IDs, import number (EORI) and all those things. So by the time we got our goods, it was already December 2017. All right.
How has your business been doing?
Initially, it worked the way we expected. But we were not able to handle the demand properly in the initial days, you know, lack of experience, lack of forecast, lack of proper software. But we improved eventually, with time. And within one one and a half year, we were already able to make six figures. Then, the whole world slowed down due to Corona. So I mean, we did slow down because of the economical conditions. But still, I would say it was a success, that our data did not lie.
What are your plans for the future?
First I would like to stabilize and bring probably more models in the lunch boxes. Because I do have customer feedback for about three and a half years now. I know what they're expecting, I know what is missing or what kind of models they actually expect. And then probably launch multiple brands and multiple segments. So, I do have an idea of getting into different kinds of models, completely independent of each other. So this might be lunch boxes, and might be completely different things.
How much time do you spend on this every week?
This is where I probably would like to state the facts. Do not believe the YouTube videos. The YouTube videos will tell you that 20 hours of work in a month is enough. They are lying. The truth is that you need at least three to four hours of dedication every single day. We were able to do it because it was not me alone doing it as a one single person. You know, my wife actually has been assisting since day one, from the research, the design packaging, talking to suppliers, procurement, and all those things. So we are two as a team. So we divided according to our own strengths and skill sets. She was doing the procurement and design and creative side. I was doing the legal side, financial, the keyword analysis and all of these things. Even today, we do spend the time for our business, but mostly after the kids are asleep.
What would be your advice for people who are looking to start their own ecommerce business?
My main advice would be to start early, you know, don't wait until you are in your 40s. It is very important to invest your time there, it is very important that you have somebody to talk to that plays a very big role here. In my 20s, all my friends also had time to talk to me. So if I would have started my business 10 years ago, probably it would have become a big company by now. Because you can afford failure. You can also start a different business.
It is also important to know that knowledge which you assemble through starting your own business, you can also utilize the same knowledge in your current job. It is not two different worlds. And people assume that, okay, if I fail here, then maybe I have to go back to a very traditional job and I can't do anything there. Or even in the other direction, if I'm doing my job, maybe I don't have enough knowledge to, you know, start off my business. It's not true. Now, for example, if I'm talking to my finance department at work, I talk with them on a completely different level than before. It does help a lot, you will understand why a certain budget has been cut off from your department, why the other department is getting more money. How should you talk to your legal department, how should you talk to your procurement department, and all those things. This is why many companies in Germany choose to allow you to do your side job whereas many companies don't. So I cannot give you any guarantee that your company will agree to that when you start your own business, but there are enough companies in Germany, which will actually promote doing it.If any of you are interested to start off their own business on the side of your main job, then I'd be glad to help because most of the Internet or our articles are always biased towards the American side. Because I see this a lot. If you read any article from a business entrepreneur from the USA they will always say go put all your energy in your business. It is always nice to take the risk or quit your job. You know, you have a wife, you have your kids to feed. But that shouldn't be a reason not to try. You can stay secure, you can still try. It is definitely possible. And it doesn't have to be the risky way. It can work for like one or two people and 98 people might fail. Nobody is going to put up the interviews of all those 98 people. So one guy had success, probably because he had no financial dependencies, either from the family side or something. He could spend 18 hours a day, obviously he will succeed if he will put so much hard work in there. But that shouldn't be the only way how it is supposed to be possible.
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