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Great Tips from a Traditional Business Winning In eCommerce

April 29, 2018

 

    Are you stuck in a family business in a small city? There is no freedom in even making a decision. You felt that you are not living your life and all your dreams are forgotten? Business is depreciating and it seems that the earlier it is shut down, it is better?

 

    You had similar hard time and want to be brave, break out and chase your dream?

 

    Then sorry, this article is the direct opposite. If you want to read an article about chasing your dream, my previous article about SEAGM is a great example.

 

     Having said that, this story completely TOUCHED my heart deeply when I chat with him, like a dramatic Korean Drama. 

 

 

“You Siao (Crazy) ah, First class honor Electrical Engineering Degree and Master, lazing in a small town in a small “Papan” shop (as photo)? You studied too much until brain pai liao (spoilt) ah?”

 

   

 

     This was what Mr. Ang always get from his close relatives when they met him. Even his Dad asked Mr. Ang to chase his dream, do something exciting and more promising in the world! Mr. Ang just smiled and take it all in calmly. He was at PEACE.

 

   Just after he completed his Master, Mr. Ang went back to Banting to his Dad hardware shop. He saw his dad carrying a huge load of cement to the truck, panting along the way. It just HIT HIM HARD right there, feeling sad seeing how his dad sacrifices for the family. He quickly helped his dad. That night was a sleepless night for him.

 

    What am I if I cannot help my father to achieve his dream, when he had been sacrificing for us for so many years?

 

    What is the meaning for me to be successful outside if my father business failed?

 

    No! I cannot agree to that! I am going to work with my Father. We will bring this business to another level!

 

     This was the magical and pivotal moment. It combined old age wisdom with new generation passion and sealed it in father and son blood ties. This was the start of the new ATKC Hardware Trading Sdn Bhd and kept Mr. Ang going for the next 10 grueling years before ATKC was in a stronger foothold. 

 

I just look at Mr. Ang and all I can say is “You are really a Siao (Crazy) one”.

 

Tips: It is still about finding the meaning of your life even people don’t understand. It will keep you going in the darkest hours. 

 

    Traditional business is always one of the hardest segment to move into eCommerce. Worst is for ATKC, a hardware and building material store which sells stuff as small as a screw, to big heavy items like water tanks! Additionally, DIY was not really hot in Malaysia and most businesses were thru developers and contractors, not consumers

 

    When Mr. Ang started eCommerce, it was completely an unexplored area with no reference. There was no business case to justify the cost and profit at the start. In fact, the first few months after he created his website and spent much time listing, it was zero sale! Only after enduring that, sales and purchases started to trickle in, but it was not profit but another expense as they had to deliver it from Banting to Selangor and KL.

 

Why Mr. Ang? Shouldn’t you focus your effort more on developers, contractors and government official to get more big businesses? Why keep doing it when you were losing money month after month? I asked.

 

New market opportunity and exposure!

 

   Banting population was 50k and in Kuala Langat district, 300k. This market size was the ceiling that limited ATKC growth. In fact, the competitor started to take away market share from ATKC. It wasn’t viable for him to expand and set up new branches in other towns due to the high cost and limited capital. 

 

    Thus Mr. Ang believed that eCommerce is the answer. He endured and kept swimming in this blue ocean, taking in all the losses but gained experience and knowledge.

 

     As always, when you do not give up, a path will appear. In 2014, Selangor encountered the water shortage crisis. STAR wanted to to do an article on hardware stores due to this crisis. While searching online, Star discovered this hidden gem, an online hardware store name ATKC which displayed all their prices transparently for the customer to compare.

 

 

 

So, they highlighted ATKC effort in this article, and BOOM! ATKC eCommerce grew tremendously and they started to make the real profit from consumers directly online.

 

 

 

 

    Due to this exposure also, other developers and contractors outside of Banting and even overseas, started to know about ATKC. Then as they discovered ATKC attractive price online, they started to contact ATKC for quotes comparison and advice. The traditional offline business grew much due to indirect influence from their online business.

 

    Just imagine what a waste if Mr. Ang gave up before this opportunity came?

 

TIPS: eCommerce expand the business market size tremendously. Many are still hesitating, but Mr. Ang as one of the earliest pioneer is enjoying great rewards now. Don’t wait. Just do it.

 

     I had never thought that I will find this Zappos equivalent in Banting.

 

     An early customer from Langkawi discovered ATKC online and requested them to send him a basin. Mr. Ang sent him one and it broke during shipment. Subsequently, the customer hammered Mr. Ang with a rough complain.t

 

     Mr. Ang double the protection and sent it but it broke again.

 

     Mr. Ang improved the packaging and sent again, still,  there was some dent on it.

 

     For the fourth time, he still stubbornly could not accept defeat and send again, but still, the condition was not perfect.

 

     By this time, the customer persuaded Mr. Ang to refund, as even him cannot stand seeing Mr. Ang kept doing this. They are now friends and this customer kept sharing his experience and recommend ATKC. 

 

 

     Why not just refund after the 2nd time?

 

     Mr, Ang answered: This customer wanted my sink for his new house. Am I solving customer issue if I refund? I didn’t want the easy way out of a refund. I wanted to solve customer problem!

      In another story, Mr. Ang scored an order for a whole 20 feet container overseas. Due to rough SEA during shipment, around 30% of the products were damaged. In normal insurance claim, you need to hold the container for few weeks to complete the processes.

 

The customer called and informed Mr. Ang that he needs this urgently.

 

     Mr. Ang instinctively apologized and agreed to absorb the 30% lost by releasing the container. It was not a basin for a consumer, and this decision costs a lot of money. Yet he released the container. After this action, he was in trouble as he had some cash flow issue. So, he wrote to the customer in hope that he can paid customer back in stages.

 

    Next day the customer called again from overseas and informed Mr. Ang that he was deeply impressed by Mr. Ang first instinct reaction during the first call. He agreed to Mr. Ang and even further promised that he will allocate his whole year business to Mr. Ang. Guess what, they are friends until now and there were many referral cases from this customer.

 

     Again, I had to say: Mr. Ang, you are really a SIAO LANG (Crazy Person).

 

TIPS: Customer satisfaction again is a must in eCommerce or in fact in any businesses. The authenticity of this value and culture must come from the leader, in order for the team to have the courage to follow it.

 

     In a family business, there are added complexity when we mix family relationship with business.

 

    Mr. Ang agreed that sometimes it was a hindrance to what he wanted to do. But he also realized that it was genuine second opinions which cross-check his action. In here Mr. Ang madness was contained by his family relationship in ATKC.

 

     Additionally, it was his starting vision to bring his family business to next level. As such, it was not about him, but about his family. In times, he needed to wait patiently, communicated continuously so that the family can reach the same level.

 

     But if his family value was so strong, will it not be unfair to ATKC employees?

 

     I didn’t ask this directly, because I am not looking for a cheesy answer like “I treat my employees like my family”.

   

     

     First I observed that his seat was similar to all employees. He was surrounded by all his employees in an open environment. During the interruption of this chat by the employee, his tone of business with his employee was mutual respect. 

 

     Then comes the trick question. If a very good friend or family members call to ask for your help on certain product managed by your employee, it isn’t it a better choice to attend to them first?

 

     Mr. Ang replied. I can’t do everything and make every decision myself. Once I had empowered my employee on a certain responsibility, it is their call. Non the less I will do my part for my friend and let my employee know about this special request. However, if she finds it not possible as it will affect other customers, I always respect her decision”.

 

     Thus, from my observation and his reply, it was a high probability that Mr. Ang had manage and balance well between different stakeholders. This contributed to ATKC phenomenal growth last 15 years in a traditional business.

 

     My sincere suggestion for Mr. Ang that as long he is in ATKC, this complex balance will hold. But what about the successor? Mr. Ang greatest challenge in future is to transform ATKC into a legacy which stood more than 3 generations. 

 

TIPS: In traditional family business, leaders need to maintain a good balance in managing stakeholders, especially between family members and employees. A leader must be fair, transparent and bring the best value out of every employee and family members.   

 

    Lastly, I asked Mr. Ang for a special online secret for readers.

 

     One thing about Mr. Ang. he had no fear in sharing and competition. He strongly believed that competition builds characters. He even met with his competitor to exchange plans and idea previously. I actually invited a similar industry key person for this chat, and he just accepted it.

 

     ATKC is actually selling a product range for RM5.19 per unit in Lazada. After deducting the courier fee and commission, it is confirmed money losing listing.

 

Many readers had noticed this before and ask Why?

 

    The standard seller action is to bundle it into 3 units and sell it for maybe RM 12 to cover the cost.

 

    But on consumer perspective, what if the consumer dislike the product after trying the 1st unit? The other 2 unit will be a waste and burden to the consumer.

 

     Thus Mr. Ang believes it is not fair for the consumer. It also left a bad taste on het consumer for eCommerce. Thus, for this product range, he still lists these high-quality products at RM5.19 per unit.

 

    If the product exceeded customer expectation, then the customer might buy more units in next order. This is when ATKC started to recover their earlier cost. Additionally, as ATKC RM5.19 product was of high quality, the happy customer will have more confidence in buying more other products in his store!

 

    Non-the-less, it was still a brave decision, as the customer might not act as you think. A lot of seller and customer is laughing at AKTC and abusing the goodwill.

 

    But I guess Mr. Ang is having the last laugh here.

 

   To readers, follow if you dare and don’t flame me if you lost money here.

 

    ATKC did it because it is not just the product and the listing which determine the success. It is the FULL PACKAGE from Mr. Ang continue doing what he belief is right for the customer, his family members trust and supporting him fully, to his staff executing his values with the correct empowerment and trust.

 

     In the end, Mr. Ang is the SIAO LANG (Mad Person) from Banting. Mark my words, this mad men is going to leave his mark in Offline to Online (O2O) for a traditional hardware and building material business in future. 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

  

 

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