How To Start A Stationery Business In India? [Detailed Guide]

An Overview Of Stationery Business In India

Stationery refers to a wide range of paper-based products used for writing or printing, as well as non-paper based items such as pen, pencil art materials which supplement the writing. Over the years, the range of items has extended to include folders, pen stands, decorative items like streamers, and computer consumables. The increasing level of education in India (primary and higher) is creating new opportunities in the stationery business.  

The growth in e-commerce, too, is creating additional demands in India. Over 20 crores school students in India require several stationery items every year. The government's focus on education will keep increasing the number of school-going children every year.  

Statista (a company specialising in market and consumer data) estimates the Indian stationery business at INR 12000+ crores yearly. The industry is expected to grow by over 10% each year (in value) for the next five years. Stationery business in India typically follows a three-stage distribution: Producer to Wholesaler, and wholesaler to retailer, before it reaches the customer.

Starting a stationery item business is still an attractive option but, like in every industry, the stationery business too has risks involved.  You may begin the business with INR 10 Lakhs capital, depending on your location.

A careful study and analysis of a few essential steps will help you a lot before starting a stationery business. But, first, let us understand the broad categories of stationeries.

Segments For Stationery Items

Two Broad Segments

• Paper:  Note pads, exercise books, writing sheets, and cards (greetings, wedding, and business).
• Non-paper:  Pen, pencil, art materials (colours, crayons, markers, and more), office stationery(folders, staplers, scratch pads), decorative items (masks, balloons, streamers), computer consumables (ink- cartridge, toner among others), adhesives, and technical instrument stationery.

Options For A Stationery Business

• Retail store (selling to customers)
• Wholesale supplies (to retail stores, office, and school supplies)
• Online store (direct to customers per order placed)
• Home-based/part-time (mainly selling items on personal contact )

How To Start A Stationery Business: A-To-Z Guide

Four main aspects need careful considerations:

• Finding the right suppliers
• Your customers (marketing plan)
• Location
• Funds

Preliminary information on the above points will help you to prepare a business plan, the guiding document of your business.

Include a realistic estimate of monthly sales and profitability in the business plan.

Finding The Right Suppliers

1. Both retail and wholesale business in stationery items requires a reliable supplier base.
2. Apart from the quality of items, competitive business terms (like credit) are factors for choosing your suppliers.
3. Compare the details of various suppliers to select the one you find most suitable.
4. A backup supplier should also be identified for a possible default in supplies by the chosen one.
5. Market information, trade guides, and online resources will help you with information on suppliers.

Also Read: Adhesive Manufacturers in India

Your Customers: Plan The Right Marketing

• People say your business is as good as your marketing.
• Proper customer handling is a critical aspect of the stationery item business.
• Wholesale will need regular customer contact and enhanced marketing efforts.
• In a retail outlet, displays, stock range, and customer handling have a significant impact on sales.
• Promoting your shop in the local area and social media will help in attracting new customers.
• For an online business, necessary digital structures, like a website, payment link, have to be created.

The Importance Of Location

1. A location can make or break your retail business.
2. The nature of your business, retail or wholesale supplies, will be an essential factor for deciding on the spot.
3. Clear access for customers, good shop frontage, and nearness to a marketplace are factors for deciding on a retail shop location—provision for adequate storage of stocks to be considered.
4. A wholesale/online business can happen from a small office space (even your house) but should have a separate warehouse for stocks (in case of wholesale).

Also Read: Best Pencil brands in India

Funds For Your Business

Most small ventures are self, or family-financed to start with. But if you need funding, what are the sources?

1. Banks.
2. Co-operative credit societies, which offer priority loans to small businesses (you have to fulfil their conditions first).
3. NBFCs (Non-Banking Finance Company).
4. Crowdfunding- A relatively new concept of attracting money from friends, associates, or even the general public in exchange for shares of your business. It would help if you had a trustworthy reputation, and a dedicated effort to be successful in raising crowdfunded money.
5. Venture capitalists, or angel investors- A new finance concept for small businesses, but applies mostly to innovative products or services. A good business model may attract venture capitalists to stationery item business.
6. Digital finance platforms - Several fin-tech Companies offer loans in collaboration with NBFCs. They are an excellent resource for a small entrepreneur.

The Indian government has a particular focus for small businesses, and many schemes offering funds with easy terms are available for SMEs. Mudra Bank is such an initiative. Besides, several incentives like exemption from taxes, interest waiver on loans are available for the small business owner.

A practical word of caution – wholesale business will mean higher investment on stocks and distribution (people and logistics); and, higher working capital to cover business credits.

These points, along with the cost for equipment (furniture, computers, and delivery vehicles), should be closely reviewed before launching your business.

The Final Stages

• It is time for action now.
• Complete necessary formalities of registration and license, opening a bank account.
• Formalities for registration can be done online now.
• Finally, you have reached the stage of launching your business.
• Once you are on-stream, plan proper accounting of sales and receivables (various software packages are available).
• Remember few tips of successful business owners – begin in a small way, and grow steadily, choosing your items and customers carefully.
• Your dedication, planning, and customer relation will be the key to success.

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FAQs

Q. How do I start a small shop for stationery items? I have a small garage space.

Ans. You can start your business from the garage, but the location of a retail shop is crucial for success. If you are close to a market or a busy area, the chances of customers (school children /parents) visiting your shop will increase.

Select the items for your shop carefully, after gathering information about the expected profile of customers (of stationery items) in your area. You can start the business after gathering the required license, permit, registration.

Remember to follow your shop timings strictly from day one – it will build up the reliability of your shop.

You can begin in a small way with your funds, and expand your item range gradually.

Q. What Is Better: A Retail Shop, Or A Wholesale Business?

1. The type of business you want to do depends on your resources, as well as your inclination.
2. Retail shops have different priorities than a wholesale business.
3. If you are comfortable with visiting customers regularly and convince them about your products, and arranging timely deliveries, wholesale is for you.
4. Retail, on the other hand, is selling to customers who turn up at your shop.

Q. How profitable is an online stationery business?

Ans. Online business means arranging the supply of the ordered items on receipt of orders from customers. Close contact with suppliers and efficient logistics are prerequisites for online operations. You will have a gross margin of 25 to 30%.

Criticality for online setup is a proper marketing mindset for this job, involving close coordination with your customers, suppliers, and logistic service providers. Adequate accounting and monitoring setup help to keep track of your business.

Q. My stationary distribution business is growing, and I need financial help. What options can I get, other than banks?

1. Banks require several documents as per their formats for deciding on loans.
2. Many small business owners like you find it challenging to comply.
3. Financial technology companies are offering consumer-oriented services; these include managing financial operations.
4. The finance companies (called Fintechs) work on the primary operational and accounting data (of your business) and generate several digital reports using specialised software and algorithms.
5. Many such Fintech companies collaborate with NBFCs to organise loans for small businesses.
6. Several of these companies manage the whole financial affairs of small enterprises.
7. OkCredit is one such company providing financial services to several small enterprises, with total customer trust and satisfaction.
8. They even have programs in several regional languages too.