Blockchain Isn’t For Goliaths Alone, Davids Can Use It As Well

When people hear about blockchain, most of them think it’s only for tech companies or conglomerates handling complex digital functions or transactions.

That’s not true. This technology has real, practical value for businesses, including small ones looking to stand out and find buyers in competitive markets, global as well as domestic.

Take, for example, a small Ahmedabad-based textile manufacturer with international ambitions.

Selling the product abroad sounds like a dream, but the reality is complex. International payments take days, and there are middlemen ready to eat into margins.

Also, proving the quality of your product to someone sitting in another part of the world isn’t easy.

This is where blockchain could come to the rescue.

Proving Authenticity

The technology provides a secure digital record of every activity which everyone involved in a transaction can see and verify.

That means the small business owner can record every step of the production process on the blockchain — materials used, shipping status, delivery dates, etc.

Because all the details are disclosed in a transparent way, buyers sitting hundreds of miles away can see exactly what they will get and when.

Once the quality concerns have been addressed, the next thing to come into play is smart contracts — the agreements that initiate actions automatically when certain conditions are met.

So instead of waiting weeks for payment, the seller in Ahmedabad gets paid as soon as the goods are marked as delivered. There is no need to remind the buyer to release the payment.

Removing Middlemen

An even more effective way the blockchain system could help a small business is by reducing the need for middlemen, such as brokers, agents, and banks, who take their cuts at every step.

With blockchain, the manufacturer can deal directly with the buyer, send goods, confirm delivery, and receive payment — all on one platform, without paying any middlemen.

This would not only cut costs, but also open doors that were previously locked. Small businesses can reach global markets with ease, can offer competitive prices, and sell their products easily because they have earned the same trust a larger player enjoys.

Apart from that, companies offering subscription-based service can move away from rigid, fixed fees and charge customers based on actual usage. It's a fairer and more accurate subscription model hard to implement with traditional systems.

The First Step

Most businesses new to blockchain ask what they need to do to incorporate it into their day-to-day operations.

Here is a simple answer:

The first thing they need to do is to identify one big problem the business is facing and then figure out how blockchain might address it.

Let’s say the textile manufacturer is finding it hard to convince buyers overseas about the quality of their products. This is where a platform like Wholechain can help.

The platform would let the buyer track every step of a product’s journey — from sourcing and processing to packaging and shipping. The buyer only needs to scan a QR code to see what’s happening to the product they ordered.

The whole system is extremely reliable because once a milestone has been recorded in the blockchain system, it cannot be changed without alerting the buyer.

Final Words

There is no doubt that to join the blockchain platform, the business might need to make a few internal changes, like moving away from paperwork and helping the team get comfortable with the new system.

Although the switch would not require a massive technological makeover, businesses must be ready to spend on setting up the new system.

Subsequently, if the identified problem area shows improvement, the business could then explore how blockchain can solve its other issues.

The bottom line is that blockchain, as it is mistakenly believed, isn't only for big corporations; it could even help smaller players improve every part of their operations.

This series is brought to you in partnership with Algorand.