(MENAFN- Live Mint) An Indian startup founder recently shared his story of the downfall of his business, which used to generate a revenue of ₹20 lakh per day. Grapevine founder Saumil Tripathi shared the story on X.
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Tripathi's post was about the story of a founder of a home organiser company who started his business from scratch and took it to unimaginable heights. The moment when the founder was planning to take a giant leap in his business, tables turned and he lost his complete revenue after the e-commerce giant, Amazon , launched a brand as his company's competitor.
In his post, Tripathi shared a screenshot of the story of an Indian startup founder, originally shared on Grapevine , a platform where one can discuss one's career.
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It all began in 2017, when the Indian found his startup idea while he solving his own problem on AliExpress, an online marketplace that connects buyers with sellers to sell a wide range of products at affordable prices.
“I was on AliExpress, looking for budget-friendly storage ideas for my own apartment-think suction-cup shelves, collapsible bins, drawers, etc. " the entrepreneur shared in his post, adding that he realised that these products were way more expensive on Amazon.
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Taking a“leap of faith”, he spent around ₹2.5 lakh to buy items and sold those items on Amazon India. The idea worked and he managed to earn lakhs from re-selling items on Amazon.
Busines reached its peak
“Within two months, I was moving nearly ₹20 lakhs a day in revenue across Amazon and Flipkart . My margins hovered between 15%-25%, which means I was netting anywhere between ₹3 lakhs,” the post read.
He also got an overwhelming response from Amazon, as he received“top sellers” perks, and other exclusive benefits. He started expanding his business and started investing heavily on inventories. His business became so profitable that he managed to fund a trip to China to crack deals with manufacturers.
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At the time when his business was at its peak, he received a 'nine-digit' 'buyout offer' from Amazon.“They pitched me a collaboration or potential acquisition, hinting that my brand complemented their private label push,” the post read further.
However, the startup founder declined the offer, thinking that he would be able to make more money from the business in future. But things were about to change as he“ended up getting a competitor he couldn't outspend.”
Unmatchable competition from Amazon
“Few months later, I saw Amazon's brand (Solimo) launching suspiciously similar items- same size, shape, and function, undercutting me by 10-20%. Almost overnight, my best SKUs lost their top spots in search. Where I once dominated page one, Solimo ads and listings took over.” His business went into losses within months and he was forced to sell his inventory items at cheaper rates.
“Where once I enjoyed 3-5 lakh daily in profit, now I was facing negative returns. I had to juggle shipping costs, customs bills, marketing budgets, at while trying to recoup whatever I could.”
Later, the entrepreneur ended up shutting his company, which he thought had the potential to become a business“that could have taken care of him and his family for decades.”
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