Pick winning products. Protect your margins. Never over-stock or run dry.
How to pick products that actually sell — before you invest in inventory.
Demand validation first: check Google Trends India, Amazon/Flipkart bestseller lists, and local wholesale market turnover before sourcing.
Competition check: count how many sellers are on the platform you intend to sell on. Under 50 sellers = green. Over 500 = you need a clear differentiator.
Margin threshold: target minimum 4× markup (buy at ₹100, sell at ₹400). Online platforms eat 15–25% in commission + logistics.
Seasonality: don't start with highly seasonal products (Diwali gifts, monsoon products). Start with year-round demand.
Avoid: high-return categories (fashion, electronics accessories), regulated categories (food without FSSAI, cosmetics without licence), and high-weight-low-value products (freight kills the margin).
Best entry categories for India: home décor, kitchen tools, personal care accessories, niche stationery, pet products — low regulation, good margins.
Where margin disappears — and the levers that actually bring it back.
Landed cost breakdown: product cost + freight + customs duty + CHA charges + last-mile logistics + platform commission + returns provision.
The 40/40/20 rule: product should cost ≤40% of sell price. Platform fees + logistics ≤40%. Leaves 20% gross margin minimum.
Volume negotiation: most suppliers drop price 8–15% at 3× your initial MOQ. Build to that volume, then renegotiate.
Freight optimisation: consolidate shipments. LCL at 2 CBM vs FCL at 25 CBM — FCL per-unit rate is 40–60% lower at scale.
Returns are the silent margin killer. 15–25% return rate on fashion wipes out margin entirely. Track by SKU, cut the dogs.
Bundling: combine slow-movers with fast-movers. Increases average order value without touching your COGS.
How to not run out of stock or drown in unsold units — the maths most founders skip.
Reorder point formula: (average daily sales × lead time in days) + safety stock. Lead time for India import: 35–50 days door to door.
Safety stock: 2–3 weeks of average sales. More for your top 5 SKUs. Less for slow movers that tie up cash.
ABC analysis: rank SKUs by revenue contribution. A = top 20% of SKUs = 80% of revenue. Focus inventory capital on A, minimise C.
Cash flow timing: you pay for inventory 60–90 days before it sells online. Build this into your working capital requirement.
Dead stock prevention: set a 90-day review cycle. Any SKU with <3 units sold in 90 days gets a markdown or liquidation decision.
Warehouse cost matters: if you're on Amazon FBA or Meesho FBM, factor fulfilment + storage fees into your effective margin per unit.
Share your current cost structure and Alif will identify where the margin leaks are and how to plug them.
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