Startup founder claims to have lost e-commerce business with Rs 20 lakh/day in sales to Amazon

An Indian startup founder's dramatic journey, from generating Rs 20 lakh in daily revenue to seeing his entrepreneurial dream shattered, has ignited conversations on social media. The story, shared by Saumil Tripathi, founder of Grapevine, on X (formerly Twitter), details the startup founder’s claim that Amazon leveraged its platform dominance to outcompete his business.

The account, which quickly went viral with 1.2 million views, recounts how the entrepreneur launched a home-organiser company in 2017, inspired by affordable storage solutions found on AliExpress. The startup reportedly thrived by sourcing suction-cup shelves, collapsible bins, and drawers from Chinese factories and selling them at significant markups in India.

"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

According to the startup founder, success came quickly as he scaled operations and achieved healthy profit margins. However, he claims his fortunes took a turn when Amazon expressed interest in acquiring the business.

The founder alleged that Amazon offered a "nine-figure" buyout and hinted at integrating the startup’s products into its private-label strategy. After he declined the offer, he claims Amazon introduced its private-label brand, Solimo, which began selling similar products at much lower prices.

He further alleged that Amazon used its platform's algorithms to prioritise Solimo products in search results, effectively pushing the startup's offerings out of visibility. Attempts to match prices, he claimed, only eroded profit margins, leaving the business unsustainable.

Continued here pic.twitter.com/OmxPsLsW5D

— Saumil Heard It (@OnTheGrapevine) December 26, 2024

“Today, that business is practically gone, undone by Amazon’s move into private labels,” the founder reportedly stated. “I’m not broke, but the dream of creating generational wealth was taken from me before it could fully materialise.”

The story, shared by Tripathi, sparked diverse reactions online. Many expressed sympathy for the entrepreneur, while others saw it as a lesson in strategic decision-making.

“Nothing new. That’s what happens to fast-growing startups. Big players buy them out or outcompete them. Never mess with them. Try to negotiate and accept the offer,” commented a user on X.

Another remarked, “Most platforms now use white-labeling tactics and algorithm manipulation to favor their products. This is a common practice after regulatory changes barred them from owning stakes in priority sellers.”

The startup founder’s account, while not independently verified, underscores the challenges faced by small businesses competing in markets dominated by global giants like Amazon. It raises questions about the ethics of such practices and the balance of power in the e-commerce industry.