Retrons is an e-commerce platform that sells refurbished mobile phones and is the leader in the Malaysian market. In the words of its founder, William: “Do what no one is doing, to get the biggest piece of the cake”.
Already 4 months on the road and we get to Malaysia. It’s a very interesting country with a huge mix of cultures and a thriving start-up ecosystem.
The first start-up we feature in Malaysia is Retrons, leader of the refurbished phone market in Malaysia and with big ambitions in the region. Let’s see what we can learn from them!
Who is behind Retrons?
William Lee is the person behind this start-up. He is 31 years old and started Retrons back in 2009, when he was 24 years old.
He studied a two year diploma in computer science at the HELP University (Malaysia) and specialised in programming.
When he finished university he went directly to work in the IT department for a logistics company in Malaysia.
“I didn’t want to study more than two years. I didn’t see that much value in it so I decided to start working and see what happened.”
Where does the idea come from?
“It all happened when I was appointed as an IT manager for the company I was working for. I had a lot of free time. The only thing I did, was just receiving tasks, forwarding them to others and then a bit follow-up. That was all.
I thought… what am I doing? I’m not doing anything. I’m just reading emails and sending them to someone else. I really struggled to see the value in this. I felt that I wasn’t learning anything new so I thought that it was time to move on and do something else.
At that point I started to do some research about what I could do. I’m a tech guy so electronic devices was something that I had in my mind. I stumbled upon the idea of selling second hand mobile phones. No one was doing it in Malaysia in large scale, just some small retailers. Since I liked the industry I decided to give it a try.
How does Retrons get to be the leader of the refurbished phone market in Malaysia?
William chose one of the toughest paths an entrepreneur could follow. He started the game alone.
“It’s very very hard to start a company alone. I still had my full time job when I started Retrons. From 9 am to 5.30 pm I was working for someone else and after would be 3-4 more hours working on the new project.
It was very slow at the beginning. I didn’t have enough money to hire staff so I had to do everything myself. From packaging, customer service, sales to warehousing. I didn’t even have an office so I had to store everything in my room. I was bootstrapping 100%.”
When I interview start-ups that had no money to start with I’m always curious about how those first sales were and the meaning they had for the founders. I asked William about it.
“Wow… the first sales are a great feeling. It seems that you hit the jackpot!
I used free resources to promote Retrons and get those first sales. I wandered around all the blogs I could find related to technology and posted comments about what I had to offer. In forums too, I dropped the information everywhere on the Internet.
At the beginning I had a few orders but I wasn’t confident enough to leave my paid job. It took me a few months.
I kept promoting until I got several orders. I saw the potential of the market and left my paid job to totally focus on Retrons.”
We have said how William got the first sales but we skipped how he got the first second hand phones to re-sell.
“I followed a similar strategy. I posted online that I wanted to buy all the phones people had. I bought them for a cheap price and then I just re-sold them with a mark-up to other people.
Four years ago we got into the refurbished phone’s segment. Old phones like Blackberrys and Nokias started to die and the Apple and Samsung fever had already reached Malaysia so we decided to start refurbishing these types of phones.
We are sixteen people now working at Retrons. Five people are technicians in charge of refurbishing the cell phones; another five people deal with the customer service, three more in administration, another two for accounting plus me.”
Starting your own business always has many challenges. I asked William about the challenges that Retrons found along the way.
“The first problem was the issue of the warranties. We were selling second hand mobile phones so we had to offer a warranty with them. When people brought us back the mobile phones because there were problems, I had to find technicians to fix them. I found it extremely difficult to find professionals I could trust.
At that point, we had so many non-operative phones and no technicians we could trust, so we started hiring in-house technicians to cope with the warranties we offered. This turned out to be a great opportunity to get into the refurbished phone market. We already had the technicians so we started buying non-operative phones and fixing them ourselves.”
The second problem came with the quality of the refurbishment. When you refurbish a phone, you have different grades of quality, from the outside you can easily asses how the phone is, but you don’t know anything about inside.
Small stores do the refurbishment but not with original parts and without enough expertise to do it properly. In these conditions, they can sell the phones much cheaper than us. That’s why from the beginning we had to take care of our branding to convince people that there is a reason behind the extra money they are paying. We are very strict when we hire a new technician and that costs money.
We educated the market on this. We did online campaigns and we sent out newsletters explaining how you can detect if the quality of the refurbishment is a good or a bad one. From there, we started gaining credibility and therefore we saw a very interesting growth.”
Retrons smartly navigated the challenges they faced and are now ready for a new stage in the expansion of their start-up.
From the online to the offline world
“In the beginning of 2016 we had a very important milestone. We opened our own stores to start selling offline.
We wanted to try how this worked. In e-commerce, trust is a very important factor that we have to leverage. With this strategy we aim at gaining another source of revenue, increase our brand awareness and provide more trust.
We have learned from the offline world that things are much slower than online. However, we are getting a much better understanding of our customers thanks to face to face interactions. We are getting to build relationships with clients and that’s something that e-commerce can’t easily achieve.
The four stores we opened are all in Malaysia, two stores in Johor (the closest Malaysian city to Singapore) and two more in Selangor (a town next to Kuala Lumpur).
I asked William for more information about their annual turnover. Although he didn’t tell me the exact amount, he gave me a hint to guess the size of their start-up.
“2016 was without any doubt the best year in terms of sales. I can just tell you that our annual revenue was from 1 to 20 million Ringgit (€210.000 – €4.225.000).
We are selling an average of 1.500 devices a month. They are shipped to over 20 countries but still 75% of our sales are in Malaysia.”
What can we expect from Retrons in the future?
“We are looking into expanding to other countries in South East Asia, Thailand, Indonesia and Singapore first. We already have some sales coming from those countries so there is interest in our products.”
Unfortunate for Malaysian people, Retrons has a big opportunity with the huge depreciation the Ringgit has been suffering since 2014.
“The Malaysian economy is not so stable now and the Ringgit has been greatly damaged. A lot of people can’t afford brand new phones so, even though we would have preferred a different kind of opportunity, we can’t miss this chance to grow the business.”
Any tips for other entrepreneurs?
“The first one would be: look for an empty market to start. It might look difficult nowadays but there are opportunities out there. We decided to do what no one else was doing. Everyone was designing new smartphones to compete with Apple or Samsung but we decided to cover the empty space we found in Malaysia. And it worked.
The second piece of advice is: be well aware of how hard it is to be an entrepreneur before you jump into it. I didn’t expect it to be that hard actually. You need to know everything about your company, from A to Z, all the responsibilities and problems will come to you and you have to manage them. You can’t pass them to your boss.
But although it’s hard, I don’t regret it and I would do it again. It’s all about managing your own future, if I want a Ferrari, I work harder, if I want to spend more time with my family I slow down and delegate more, it’s all my choice whereas working for others you aren’t always sure of what will happen.”
Talking about entrepreneurship, I asked William what he had found the most difficult part of being an entrepreneur. He didn’t think for a second to answer this question.
“The most difficult part of owning a business is definitely managing people. There will always be problems, unexpected situations, people coming and people leaving, but that’s part of the game and while you treat them properly, everything will be manageable.
To avoid problems it is essential to empower your employees too. Don’t train them to do just one thing and expect them to do it forever, that’s boring and it’s not working anymore.
Instead empower them and let them grow with your company, be transparent and share the objectives with them, so that the goals of the company are aligned with the goals of your employees.”
With these great tips and insights about being an entrepreneur we concluded the interview with William. It’s good to see there are companies trying to re-use resources instead of consuming them all.
Thanks so much Retrons!
That is all for this week. Stay tuned for the next start-up! We’ll still be in Malaysia but we change industry completely! Sign up below if you don’t want to miss it 😉