An Indian startup founder’s story of how he went from generating a revenue of Rs 20 lakh per day to almost losing everything is going viral on social media. Shared by Grapevine founder Saumil Tripathi on X (formerly Twitter), the story shows how e-commerce giant Amazon capitalised on the founder’s business model and managed to scale it, eventually driving him out of the marketplace.
“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! [sic],” read the post by Mr Tripathi on X.
As per the unnamed founder, he started a home organiser company in 2017 which quickly began to provide incredible returns.
“I was on AliExpress, looking for budget-friendly storage ideas for my own apartment-think suction-cup shelves, collapsible bins, drawers,” the entrepreneur shared in his post, adding that he realised that these products were way more expensive on Amazon.
After spending Rs 2.5 lakh initially to buy Chinese products and quickly reselling them in India, the entrepreneur expanded the business by stockpiling the inventory. He even went to Chinese factories to directly source the product which increased his profit margins.
The business was booming and soon Amazon approached the founder and offered him a “nine-figure” buyout. “They pitched me a collaboration or potential acquisition, hinting that my brand complemented their private label push,” the post read further.
However, the startup declined the offer and it was to be the beginning of the end. Seeing the success of the products, Amazon introduced its own private-label brand, Solimo. With eerily similar products but at significantly lower prices, Solimo began to dominate search results on Amazon, pushing the entrepreneur’s offerings off the virtual shelves.
The OP’s top-selling items, once leaders in their category, found themselves overshadowed by Amazon’s strategic move. If he tried to reduce the prices, Amazon slashed the margins further until the OP was forced to clear the inventory on loss.
“Today, that business is practically gone, undone by Amazon’s move into private labels. I’m not broke or working a 9-5, but the potential for creating true generational wealth was ripped out from under me before it could fully materialise. This is my cautionary tale,” he said.
“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/jvZl5PNDus
— Saumil Heard It (@OnTheGrapevine) December 26, 2024
Internet reacts
As of the last update, the post had garnered 1.2 million views, nearly 7,000 likes and hundreds of comments. Most of the users expressed sympathy with the founder but others added that running a business without a unique product was always supposed to end in pain.
“This might be a tough read. But it is Biz101,” said one user, while another added: “It’s a leverage game and marketplaces have the ultimate leverage.”
A third commented: “Please don’t think that Amazon is your business partner. You spend on ads and they get your customer’s data. Once you grow big they will use your customer data and start selling themselves.
The founder signed off by cautioning up-and-coming entrepreneurs to be alert when an acquisition offer comes and also advised that developing a unique product was essential to surviving on such platforms.
