UNION EATS - Our Dropshipping Adventure!

On the path of entrepreneurship, we started by launching our dropshipping business, a business that assisted us to grow as a team and independently as individuals.

Here we are documenting the complete process of deciding our business, capturing and building awareness, and launching and maintaining it. We would love to share all the insights and learning we faced along the way, and this would help you learn from all the challenges we faced and make smart decisions to overcome similar situations.

So, sit back and grab a soda and popcorn. This would be a long and detailed journey, and we hope you will cherish it. It is about food :D

Introduction

It was the first week of college, and we were bombarded with the idea of creating our dropshipping venture. A business model we had no clue about. Our team of 5 members did not have considerable entrepreneurial experience. But, we were here to learn, push ourselves and do a successful business. We wanted to try and do something we had never done before and get out of our comfort zone.

So what do we mean by Dropshipping venture? Dropshipping is a type of retail fulfillment where a store doesn't retain an inventory of the items it sells. Instead, it purchases from a third party and arranges for the item to be delivered to the customer. So essentially, we act as intermediaries and help increase sales for the 3rd party business we have tied up with.

Team Union Eats: Samarth Agarwal, Shristhi Goyal, Pranav Walia, Shivani Vaswani, Sandesh Bora.

Discovering Our Product

The 5 of us sat down, brainstormed, and discussed. Each one of us gave in to their ideas. Initially, we were not sure what we should follow.

We had ideas like dropshipping wigs and hair extensions, perfumes and other aromatic liquids, wallets and purses, customized bobbleheads, personalized caricatures, and street food and beverages. After a lot of dialogue and consideration, we came to the final three suggestions →

1. Hair Extensions

We did not want to sell fake, and we planned to sell only natural hair to the customers. Even though this seemed very direct and straightforward, many challenges came to our attention when discussing the plan. Mainly, we had to find a superior quality supplier, which would not be very easy. Excellent and consistent quality is always the most critical thing to get more and more customers. Hair is a highly personal item, and we had to tread carefully at every step.

Sample Hair Extensions

Further, we realized that generally, people like buying high-quality hair from known brands only. One of the team members knew about this market and listed a few more challenges that might have prevented us from being successful even after a proper listing. This is a high-cost and price-intensive field where the already established players would easily battle us. We finally scratched off the idea

2. Customized bobbleheads and personalized caricatures

Customized bobblehead is a great market. They can be put on the car dashboards or can be just kept as a showpiece on a table. Similarly, the personalized caricatures can be placed on a desk or can even be gifted on special occasions. We researched the market and realized that most people only buy such items as pranks or specialized gift items. This would also not have a high reorder value, and it might be challenging to get very high numbers in this market where a few of the players were selling similar products at a low price.

Sample Bobblehead

Another problem is that people generally like these things for a short period. There was a strong chance that this niche might crash after some time, and it would be a reduced market. We decided not to move forward with this idea to avoid such challenges.

3. Food and beverages

Food is close to all of us, and we even have a baker in our group. As soon as this idea came up, it was all smiles. The smiles were not because it was not just because we felt we found a fantastic dropshipping idea but also because we knew we would be eating a lot of food to start the business.

All of us were excited and decided to go along with this. We know that food and beverages is an industry with very stiff competition, and you cannot be successful without hard work, dedication, and quality. We wanted to do something different being in this space. We decided to tie up with street vendors to execute our idea. Everyone loves street food, and there are fewer street food options on online food platforms compared to regular or fast food.

Idea Validation

After selecting our dropshipping business in the food & beverages space, we had to validate the idea. The food and beverages industry has always been of very high interest and a highly competitive market. As seen by the google trends chart below, food and drinks in the past 12 months have always been in high demand.

Opening a new restaurant on Zomato, Swiggy, and other online food delivery platforms also has its benefits. Studies have shown that having your restaurant live on Zomato and, Swiggy can boost your overall sales and revenue by 30%.

As stated in the article below:

https://www.financialexpress.com/industry/zomato-swiggy-others-boost-restaurant-sales-by-30/1694749/

And so, we decided to go with our gut feeling and decided to launch our brand 'Union Eats'.

Importance of Test Orders

The vendors we onboarded already had a considerable footfall offline, so we had trust in their systems. We just had to optimize them to make sure they fulfilled online orders. We gave them our packaging and explained how to pack the food cleanly. We then explained to them how to pack the order and keep it ready so that when the Zomato delivery guy arrives, they can hand over the order. For this training, we spent a few hours guiding them through every process.

After explaining this to them, we went to our hostel and placed the order ourselves. We delivered the order to our hostel using Swiggy genie. We were delighted to see that all the instructions we had passed on to our vendors were being followed correctly.

This instilled confidence in us that our idea could be successful.

UNION EATS is Born!

After successfully testing the idea in the food and beverages segment, we wanted to come up with a name that appeals to our consumers and conveys our message of helping street vendors by bringing them online.

We started by experimenting with our last names and thought of naming our F&B outlet Bora Bora (the last name of one of our team members). While this sounded appealing to anyone ordering food, it didn't convey our message effectively. So, we decided to scrape this.

Since our first few street vendors were Chinese and a pav bhaji stall, we started thinking of names in that direction - which convey that the food you get here is Chinese. We thought of words like Foodavio, Foodzilla, Chinese Hut, Express Eats, etc. All of these sounded good, but we were still not convinced to have them as our brand name.

After a lot of thinking, we shortlisted two brand names that matched the kind of work we were trying to do here - Urbana Eats and Union Eats. Urbana because M3M Urbana is where our current cohort lives. Out of these 2, Union Eats was the one which appealed to us the most. The word Union is also close to us because of our institution.

Union Eats had both the elements of our message and the attractive appeal of an F&B outlet. Union essentially means to come together for a particular cause, and that is what we are trying to do by combining street vendors and helping them come online. Essentially, this also goes along with our college name, Masters Union.

We also created a tagline for the brand -' Good food is minutes away. Probably this was one of the fastest decisions we made :P All thanks to everyone agreeing to the very first idea we got. After deciding on our name and tagline, we had to determine our logo - so we started designing one from scratch. None of us is a designer, and it was time to learn something new. We took the lead and began researching what color goes with food. The research was also based on what colors are generally used by the big brands to showcase their logos. We had to ensure that the color was soothing and would not repeal anyone. We wanted our logo to have both the elements of our message and a good appeal. We all have seen food being related to the color - RED. We came up with the below three designs, but we felt something was lacking in these.

There was a lack of attractiveness score in these, so we decided to experiment with our university's primary colors, which were BLACK and YELLOW. Our final design looked like the one below - it had an excellent attractiveness score, it showed that our business was dealing with street vendors and the name and our tagline looked appealing in this.

Project Management

Today, there are an estimated 50 to 60 lakh street vendors in India, with one of the largest concentrations of vendors existing in Delhi NCR. We at Union Eats bring authentic and hygienic street food to the customers’ doorstep. After doing the need gap analysis, we realized that the street vendors were not maximizing their revenues from potential orders by not being present online. Through Union Eats, we assist these street vendors in tapping into the online consumer market and generating income online using the drop-shipping model.

Below are the week-wise summaries of our major dropshipping meetings:

We followed a structured approach in which we planned for all the possible outcomes we wanted to achieve from this project. We ran into uncertainties and hiccups during this course, but we kept moving and tried to complete everything on time or ahead of time—this required constant rigor from all our team members.

Launching our Store

Our first step was to shortlist the kind of cuisine we wanted to deliver. We conducted surveys among our friends and family to understand the best-selling street food items. According to our research, Chinese, Chaat, Pav Bhaji, and Mumbai snacks were the hot sellers. We were instantly on the lookout for the vendors for the same, and within a week, we had four vendors on board with us from different areas.

When we started our vendor search, we came across a mix of vendors with existing food licenses and no licenses. Most of them were unaware of the procedure or the importance of licenses. We briefed and educated them on the same, and carried out an in-depth analysis of their current revenues, to understand the kind and type of license required for them.

Soon after, we started applying for the FSSAI (Food Safety and Standards Authority of India) license for them. As the turnover for all the vendors was currently below 12 lakhs per annum, we applied for the FSSAI registration certificate (applicable for businesses with turnover

below 12 lakhs), but with a hope to soon be able to apply for a state FSSAI license which is suitable for companies with a turnover of above 12 lakhs.

Our second major step was quickly onboarding our vendors on the food delivery platforms. We got in touch with the leading food delivery partners, Swiggy and Zomato, to understand the procedure for coming on board with them.

Packaging the Food

Now comes one of the important areas where we had to differentiate ourselves from the rest of the vendors - packaging. We had to ensure that we used excellent quality boxes and containers that looked sober and durable.

We searched for the best distributors in Gurugram. Following an initial search, we found one, but it was a little expensive. We spoke to one of our friends in the cohort who already has a cloud kitchen running and is aware of decent packaging distributors. We finally shortlisted one and gave him an order.

We mainly chose three varieties of boxes and containers. A round plastic container for storing gravy and semi-gravy items. A rectangular box to store dry items and even Chinese food. Lastly, another spherical container to store other food items. Additionally, for the beverages, we had to make sure that we don’t use cups that get moist and tough to handle when filled with cold liquid.

After purchasing the storing container and boxes, we had to beautify them. We got our brand’s stickers printed and posted them on all the containers. We got small cards printed to make sure that we create an impact and also for a personal touch. These cards had a brief message written, and we ensured it was sent along with every order through our vendors.

Getting Smart Packaging

Product Descriptions and Pricing

Product descriptions are something that are considered very important when it comes to the food and beverages domain. After adding our vendors on Zomato and Swiggy, we had to make our restaurant look attractive on these platforms to increase our traction. The best way to do this is by adding good descriptions to the food you sell.

The description of the food has to be both elegant and appealing so that when the customer sees it, they feel like ordering that particular item. We tried to keep our descriptions concise and precise and didn't want to go overboard as some restaurants might do as we believe that can be off-putting to some customers.

Below are some examples of our descriptions.

For example - Chilli Garlic Noodles: Delicious noodles tossed with freshly chopped chilies, garlic, capsicum, bell pepper, and onion.

While India is often regarded as a price-sensitive country, when it comes down to food, our target audience looked forward to the experience of ordering food and getting well-packaged, hygienic, and tasty food at the right price. We looked at cost-plus pricing and value-based pricing strategies. We went ahead with a cost-plus pricing strategy to maximize the revenue after vendor costs, offering discounts and platform commissions.

Price of X items = Vendor Cost + Packaging Cost + 40% Discount + 27% Platform commission.

Initial Feedback

The essential part of a business is customers and clients. We relied on feedback to ensure that we all were catering to their demand in the best possible way. We did this to regularly check the quality of the food and beverages we were serving.

After a couple of rounds of serving our batchmates, we took their honest feedback and review of the food. We were thrilled to see that everyone loved our food, and it was a common point that the food was tasty. We had a few negative reviews regarding one of our Chinese items, and we communicated the same to the vendor. We made sure vendors improved the quality of the item.

Through the feedback, we ensured that the food quantity, quality, and taste were constant. We even took input from one of our college professors. We felt joy after receiving high praise for the food and our business, which motivated us to continue.

Finding New Vendors

After onboarding Chinese and Pav Bhaji food vendors and successfully running our restaurant for two weeks, we wanted to expand our portfolio. The best place to find vendors was again Sector 56 Huda Market. There are at least 20-30 vendors, and most are not listed on any online platforms as they feel these platforms charge exorbitantly high commissions.

To expand our portfolio, we wanted to add a mix of South Indian and North Indian food to our portfolio, so we started looking for vendors that sell these and meet our selection criteria. We could find vendors in the same market that sold both North Indian and South Indian food. We also tasted the same and were very happy to discuss and onboard these vendors under our brand.

The South Indian vendor called us for a meeting at 11 pm, after the closing hours of his busy restaurant. He even served us a free dosa as he was happy to do business with us. This is us enjoying his food at midnight.

Vendor Introduction

Vendor Experience

Building more restaurants on food delivery platforms

When we worked to find these new vendors, we didn't want to have a vast menu containing all kinds of food in 1 restaurant. When North Indian and South Indian food vendors agreed to come on board with us, which are located in Sector 56 Huda Market, we decided to have these as a single Union Eats brand (restaurant) on Swiggy.

So we had two branches of Union Eats now, one on Zomato, which had Pav Bhaji and Chinese, and another on Swiggy, which had North Indian and South Indian cuisine. Because these were located in the same market but different locations, we could add these separately in Zomato and Swiggy, but under the same name, Union Eats.

This helped expand our product portfolio, and we now have a lot more variety in our restaurant. To make this restaurant appealing as well, we added images of food and ensured all the food items' descriptions were appealing to attract more customers.

Overall expanding ourselves on these platforms was a big achievement, as both Zomato and Swiggy are the most dominant players when it comes to food ordering & delivery.

Below is a statistic which shows that during new years eve, what is the number of orders being clocked by Zomato and Swiggy. So having a restaurant on both these platforms helps us increase our overall orders and revenue.

Here are all our outlets on Swiggy →

Getting Customer Feedback

The fantastic customer feedback is what we have been waiting for once we finished the hard work and effort on getting our outlets up and running on online delivery platforms, ideating the menu, and fixating on our vendor's work was done.

We started receiving feedback on our Zomato page, our Swiggy account, and even posts and story shoutouts on Instagram!

But we will also not deny that there were a few hiccups and feedback with suggested improvement areas. But these didn't demotivate us; instead, they pushed and motivated us further to keep trying and strive for the best. Our next aim is to strive for a minimum 4.5/5 star rating on all our delivery platforms.

We were fortunate enough to receive feedback from our cohort and faculty. On one of the key events we held at Masters' Union, we had a great response and review from the entire cohort. Our professor Mr.Akash Krishnan loved the Vada Pav we were selling.

Customer Experience

The First Sale!

We had completed listing the first batch of our restaurants on Zomato. It had been a couple of days, but we received no order. We will be lying if we say that we weren’t disheartened. We knew that being in the food industry with extremely high competition, we would not be able to generate orders immediately.

On the third day, late in the evening, the phone buzzed, and our first order came. This was a very joyous moment for us, giving us a positive sign and confidence that what we were building would be perceived well and loved by everyone. Over the next few days, the sales started to pick up, and our sales further got fueled by the events we conducted at our hostel.

It confirmed we were in the right place, and we were being appreciated. We knew we had to take advantage of this wave and boost our business. We started looking towards various ways of increasing the business and expanding.

Order from an International Client

One of our key highlights and moments of joy was an order by a Japanese tourist. He ordered a few Chinese items, and we received extremely special and positive feedback. The tourist was visiting Gurgaon and loved our Chinese dishes on Swiggy.

We were proud of ourselves for receiving such beautiful feedback so early on. After closely noticing, we found that the person gave the review on his page, which he had created for blogging and posting. Below is the snippet of the study we received →

Food Events

M3M Urbana X Union Eats

This was the last and the best event we had to date. We had a couple of meetings with the M3M Urbana event coordinator, who liked the idea of having a Pav Bhaji and Veg Pulao live counter.

We convinced him to keep our live stall in the Janmashtami Festival event. On D-Day, we had our setup complete with a complete counter like ours. People started to come in as soon as the Puja finished. Another advantage we had was that as the event was happening in M3M Urbana, even our cohort members could come to eat good food without traveling.

Our counter was a super hit. We had a waiting line after an hour of commencing the stall. Our vendor team was delighted to see the response they received. We did not have a bad review for the food we served there. It was a fantastic night for our whole team, and below are a few pictures of our satisfied customers.

Mini Mela at the Hostel

A mini-mela was organized by our cohort folks at the hostel itself. The mini meal aimed to ensure that all the students knew each other's dropshipping projects. We started planning a couple of days before the event, and we secured our vendors were notified of the pre-orders.

We created a small menu of our top-selling items and took pre-orders from the cohort. We had been given a large table to distribute the orders among the cohort. We even got many things over our order to sell during the event, and everything sold out. It was a very successful event, and we received tremendous cheers for our efforts.

Biryani & Vada Pav Event:

We wanted to try out and serve a different cuisine on one of the days when the mess food was not that great. We finally landed up with the idea to serve Biryani. We had three options: Vegetable Biryani, Chicken Biryani, and Hyderabadi Spicy Biryani. Everyone loved the Biryani, and we even received multiple compliments.

We also organized a Vada Pav event on campus where we delivered a hot masala Bombay-style snack. Vada Pav was one of the best sellers of our whole menu to date. People, especially from Maharashtra, where the snack originated, were delighted with the taste and flavor of our top seller.

Social Media

We started working on our Instagram page and theme from week two itself. For this, we studied multiple foods and food delivery pages on Instagram. The general theme we could gather was that these pages post about their food - which contains fancy images of well-displayed food.

This generates a good appeal for these pages; people usually like this content more. They also focus on propagating their story through their posts. For example, a food truck vendor's Instagram page usually posts about how they started and what they are serving.

We wanted our Instagram page to be on similar lines. We started by launching our brand logo, propagating our story through our posts, and showing what we are trying to do by bringing these street food vendors online.

This was one of the posts reposted by the Masters' Union page, which also helped propagate our story to a broader audience. We also used this page for announcements like the one below.

By cleverly tagging Swiggy and Zomato, we tried to gain traction on our page.

We then moved to post stories about our food. This is something that the audience resonates with, and after seeing these, they feel like ordering food from us.

Stories are a big part of Instagram, and we covered all our major events in our stories. Some of these stories are highlighted in the events section.

We plan to run ads on Instagram soon, which should help scale our orders further.

https://www.instagram.com/union_eats/

It's All About The Marketing - launching ads on Swiggy and Zomato

In Zomato and Swiggy, when a new restaurant is added, it tends to get lost in the wide range of restaurants on these platforms. With these platforms, when an item is searched, several options are available, and the top few restaurants that show up are the ones that have been around for a while and have customer reviews and good ratings. The new restaurants are generally at the bottom of this list, where the consumer doesn't bother to scroll.

They usually pick the food item from the top 2-3 restaurants in the search. To enhance the visibility of your new restaurant, you need to purchase ads which are some packages offered by Swiggy, and Zomato, to put your restaurant as recommended on top, as shown in the screenshot below.

They have week-wise offers, as highlighted below in the image: these generally include views the consumer will view and not open your restaurant's menu to explore the same. If the number of views promised by Zomato are not reached, then they refund you your money.

We went ahead with the two-week package in Zomato, and we could recoup the cost with the number of orders generated using these ads. We could notice a big difference when we ran ads and when we didn't run ads.

Swiggy and Zomato Ads Package

For Swiggy, we also purchased a similar pack age: this was a click-based campaign in which Swiggy promises you will get 500 clicks in a certain number of weeks, or Swiggy will refund the money.

Overall running ads helped us generate some orders, although not large quantities. Still, we got traction and based on that; we got some reviews added to our restaurants which further enhanced the image of our restaurant on these platforms.

Amazing Results & Experience

Having to make our team in the first term itself was a thrilling experience. We all got to know each other when tasked with forming our groups or even getting to know our future co-founders!

No matter how much we cursed the heat, running around market to market in search of our vendors, the experience was worth it all! From trying all the tasty street food to negotiating with the vendors and our packaging suppliers, it was a once-in-a-lifetime experience for all of us.

Below are a few snapshots of the reviews we have received from our happy customers:

The planning, execution, and coordination for our first outdoor pop-up stall, conducted at M3M Urbana for their Janmashtami fest, and the various pop-ups carried out at the hostel and the campus has been nothing less than a roller coaster ride. We, as a team, have laughed, cried, and sweated it all together to ensure every bit and step was undertaken successfully.

Important lesson/ Key learnings -

Food is a personal choice - The first and the foremost insight is that individuals have different taste buds, let that be street food or maybe a 5-star restaurant, various individuals like other food, and you cannot control what people like. In the food business, you must always focus on delivering your best offerings to the customers rather than on what the consumer wants.

Price does not matter - India is often considered a price-sensitive country. Still, when it came down to the business, we found this is a myth where people paid ₹180 for six momos. We had priced our products towards the premium and based upon the commissions that we have to pay the vendor cost as well as the discount that we were running on, and we found if you provide tasteful food with good packaging, people are willing to buy the same.

Intermediaries in the Food Business - The profit margins in our business are very slim. In the long term, once you establish the brand Faasos, Haldiram’s profitability margins go high. Still, even these brands operate on a cloud kitchen model and do not act as an intermediary, so to sustain and increase our profits, we will have to establish our cloud kitchen.

Role of Analytics, Images, and Descriptions - Even though the taste of the food drives the food business, analytics, food images, and your descriptions of the food play a significant role in increasing the number of orders and visibility on Swiggy and Zomato platforms. The analytics of the area you operate in gives you what people like to order and what is the peak time at which people so that you can manage your workforce accordingly.

Continue Growing

Instagram Ads

When the reach of our business increases, we would also have to run advertising campaigns on Instagram to boost it further. Even though there is no food delivery option on the application, through the campaign, we could reach a wider audience who would have Union Eats at the back of their mind and probably search for it on Zomato and Swiggy. We would need to know which plans to purchase and if any specific timing might help gather the broader attention of people.

Email and Phone Marketing

We would also want to start marketing over email, and this would be more like a concise food article or a brief newsletter. We want to establish our brand as food delivery and ordering service and even as a food awareness page. This would include food bites where some people explain food items they love cooking and the regular food items with a twist.

For phone marketing, we can send specific messages to our existing customers on updates from our brand if we expand our menu or update it. We can give a few reminders that they can order food from Swiggy and Zomato, where we are listed.

Collaborating in Fests - society events, meals, corporates

This is an area where we need to focus. We aspire to host various events across the city and supply our street food there. This would also include live counters of our best-selling items such as Pav Bhaji, Pani Puri, and Momos.

We also like to expand our events to the societies in Gurugram. Tying up with them on Food Fests would help us boost revenue and cater to a broader set of people. We even wish to serve some corporate companies and businesses. Often, street food is missing at such events, and having tasty food would make the employees happy and fuel our model.

Team Union Eats

Phew! It was a long journey. Well, for us, we are just getting started. We would make sure that this dynamic business of ours becomes a big brand and we can reach thousands of people. We would continue growing and adding new vendors, and updating the menu. We hope we shared some great stories and learnings with you.

One Word for Union Eats