'Rs 20 lakh daily to watching dream crumble': Indian entrepreneur recounts how Amazon 'ruined' his business

The founder’s story resonated widely, amassing 1.2 million views and hundreds of comments.

The story of an Indian startup founder who went from generating Rs 20 lakh in daily revenue to nearly losing everything has gained significant attention on social media. Shared by Grapevine founder Saumil Tripathi on X (formerly Twitter), the account highlights how e-commerce giant Amazon allegedly capitalised on the entrepreneur's business model, eventually driving the startup out of the marketplace.

“I went from selling Rs 20 lakh of products per day to watching my generational wealth dream crumble,” read Tripathi’s post, referencing the unnamed founder’s cautionary tale.

The entrepreneur detailed how he launched a home-organiser company in 2017, inspired by budget-friendly storage ideas he discovered on AliExpress. Products such as suction-cup shelves, collapsible bins, and drawers were available on Amazon at much higher prices, presenting a lucrative opportunity.

Initially, the founder invested Rs 2.5 lakh in Chinese products and resold them in India, quickly scaling the business by stockpiling inventory. His profit margins improved further when he began sourcing products directly from Chinese factories.

The startup’s success soon attracted Amazon's attention. The e-commerce giant approached the founder with a “nine-figure” buyout offer and hinted at collaboration opportunities, suggesting that his brand aligned with Amazon's private-label strategy.

Declining Amazon’s offer proved to be a turning point. Shortly after, Amazon launched its private-label brand, Solimo, offering strikingly similar products at significantly lower prices. Leveraging its dominant platform, Amazon ensured Solimo products dominated search results, gradually sidelining the founder’s offerings.

Attempts to compete on price further eroded the startup’s margins. Eventually, the entrepreneur was forced to sell his remaining inventory at a loss.

“Today, that business is practically gone, undone by Amazon’s move into private labels,” the founder wrote. “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.”

"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

The founder’s story resonated widely, amassing 1.2 million views and hundreds of comments. While many expressed sympathy, others viewed the incident as a hard lesson in business strategy.

“This might be a tough read. But it is Biz101,” remarked one user. Another added, “It’s a leverage game, and marketplaces have the ultimate leverage.”

Some commenters advised entrepreneurs to be wary of partnerships with major e-commerce platforms. “Please don’t think Amazon is your business partner,” one wrote. “You spend on ads, and they get your customer’s data. Once you grow big, they use that data to compete directly with you.”

The founder signed off with advice for aspiring entrepreneurs, urging them to be cautious when approached with acquisition offers. He emphasised the importance of developing unique products to ensure sustainability in competitive marketplaces.