An Indian entrepreneur's story of how his thriving business was allegedly destroyed by e-commerce giant Amazon has gone viral on social media, shedding light on the challenges faced by small businesses competing against the dominance of larger corporations.
The story, shared on social media platform X by Saumil Tripathi, the founder of Grapevine, talks about the rise and fall of a startup that once made a daily revenue of Rs 20 lakh.
The entrepreneur, whose identity was not disclosed in Tripathi's post, had launched a home organiser company in 2017. Initially, the business flourished, driven by a keen understanding of the market and the entrepreneur's own experience of sourcing budget-friendly storage products from China.
The founder's breakthrough came when he identified an opportunity to sell affordable home storage solutions in India, which involved products that were priced significantly higher on Amazon, as per the post.
After investing Rs 2.5 lakh in initial inventory from online marketplace AliExpress, the entrepreneur expanded the business by stockpiling products. "I was on AliExpress, looking for budget-friendly storage ideas for my own apartment-think suction-cup shelves, collapsible bins, drawers," he wrote.
Eventually, he traveled to Chinese factories to directly source items, improving margins and scaling operations rapidly.
"I went from selling 20L of products per day to watching my generational-wealth dream crumble"
An e-commerce founder shared the story of their rise and fall on Amazon! pic.twitter.com/jvZl5PNDusDecember 26, 2024AdvertisementHowever, the startup's success caught the attention of Amazon. The founder claimed that the e-commerce giant approached him with an offer of collaboration or acquisition, presenting a "nine-figure" deal. Despite the tempting offer, he decided to decline, choosing to continue building his business independently.
“They pitched me a collaboration or potential acquisition, hinting that my brand complemented their private label push,” the post read.
This decision would prove to be a turning point. Amazon soon launched its own private-label brand, Solimo, which featured nearly identical products at significantly lower prices, the founder claimed. The Amazon brand quickly began to dominate the platform's search results, relegating the founder's products to the sidelines, he said. With the price disparity and Amazon's ability to leverage its massive customer base, the entrepreneur claimed that he found it increasingly difficult to compete.
In a bid to stay afloat, he slashed prices, only for Amazon to undercut them even further, squeezing margins to the point where the founder was forced to sell off inventory at a loss, his post noted. The startup, which once had a promising future, was gradually wiped out.
Although the entrepreneur remains financially secure and has not returned to a 9-to-5 job, the dream of creating lasting generational wealth was effectively shattered, he wrote.
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