Startup founder says he lost Rs 20 lakh/day in e-commerce business selling to Amazon
The incredible journey of an Indian entrepreneur, from generating Rs 20 lakh in daily income to seeing his business dream come crashing down, has created discussions on social media. The story, shared by Saumil Tripathi, founder of Grapevine, on X (formerly Twitter), details the startup’s claim that Amazon used the power of its platform to overtake its business.
The account, which quickly went viral with 1.2 million views, tells how the entrepreneur launched a home organizer company in 2017, inspired by the inexpensive storage solutions available on AliExpress. The startup reportedly thrived by sourcing suction cup shelves, collapsible bins, and drawers from Chinese factories and selling them to key locations in India.
“I went from selling 20L products a day to realizing that my dream of wealth was falling apart”
An e-commerce founder shared the story of their rise and fall at Amazon! pic.twitter.com/jvZl5PNDUs
– Saumil Heard It (@OnTheGrapevine) December 26, 2024
According to the startup’s founder, success came quickly as he scaled operations and achieved healthy profit margins. However, he says his fortunes changed when Amazon expressed interest in acquiring the business.
The founder alleged that Amazon offered to buy “nine figures” and revealed to include the startup’s products in its private label program. After he rejected that, he says Amazon launched its own private label brand, Solimo, which began selling similar products at much lower prices.
He also alleged that Amazon used its platform’s algorithms to prioritize Solimo’s products in search results, effectively pushing the startup’s offerings out of sight. Efforts to compare prices, he said, only eliminate profit margins, leaving the business unsustainable.
Continue here pic.twitter.com/OmxPsLsW5D
– Saumil Heard It (@OnTheGrapevine) December 26, 2024
“Today, that business is gone, set back by Amazon’s move to private labels,” the founder said. “I have no money, but the dream of building wealth was taken from me before it was fully realized.”
The story, shared by Tripathi, has sparked mixed reactions online. Many expressed sympathy for the entrepreneurs, while others saw it as a lesson in strategic decision-making.
“There is nothing new. That’s what happens to fast-growing startups. The big players buy them or pass them on. Never mess with them. Try to negotiate and accept the offer,” commented a user on X.
Another commented, “Many platforms are now using white labeling techniques and algorithm manipulation to favor their products. This is a common practice after the changes in the rules prevented them from having shares in the leading retailers.”
The startup founder’s account, while not independently verified, underscores the challenges small businesses face competing in markets dominated by global giants like Amazon. It raises questions about the morality of such practices and the balance of power in the e-commerce industry.
