A startup founder has hit the headlines for something very sad and Amazon is being blamed. His daily revenue was ₹20 lakh once and now is nothing. It is of course a cautionary tale for young entrepreneurs in India. Grapevine founder Saumil Tripathi shared his story on X social platform and reveals the challenges of competing against e-commerce giant Amazon.
The founder started a home-organizer business in 2017 and was basically inspired by budget-friendly storage products found on AliExpress. His initial investment was ₹2.5 lakh when he started reselling the items on Amazon. Direct sourcing from Chinese manufacturers further boosted his margins and he soon started dreaming of building generational wealth.
However, challenges arrived when Amazon offered a “nine-figure” buyout after noticing his thriving business and hinting at collaboration. He declined and hoped to continue growing his brand independently.
Amazon launched its private-label brand named Solimo and offered nearly identical products at much lower prices. It pushed Solimo products to the top of search results and this left the products of the founder overshadowed. Attempts to compete on price backfired and squeezed his margins to even sell off his inventory at a loss at a certain point.
The founder wrote in his post that the potential to create generational wealth was ripped away before it could fully materialize and this is a cautionary tale.
One user commented that this usually happens to fast-growing startups as big players either buy them or crush them. Hence, negotiation is the key as most platforms now white-label products and manipulate algorithms to prioritize their brands.
They don’t just play the game, but in fact they even rewrite the rules often.
