Amazon’s innovative alternative to known brands has shut down after a short, two-year run. The online spinoff of Amazon that specialized in selling pet products, baby items, and personal care products on the low end of the price scale is shutting down and laying off more than 70 employees.
The few staff members remaining will help process the last customer orders and work through any acquisition offer evaluations. This is according to Protocol tech news.
Why Such an Ending
The Brandless website says the downfall can be attributed to the e-commerce market being overcrowded. It appears the company underestimated how fierce the competition from direct-to-consumer models would be. The company also underwent drastic leadership changes when Vision Fund, a Japanese conglomerate, dumped millions into Brandless. Vision Fund also backed successful companies such as Uber and WeWork. Some leaders resigned while others were replaced. There is some speculation that this turmoil did not help the success of the business.
Protocol also alluded to the fact that Brandless closing so suddenly was due to the company wanting to close while they had enough funds to take care of employee severance packages.
It’s all a bit dramatic considering the company entered the playing field with a target on changing traditional grocery shopping. Brandless was founded with the vision of including consumer packaged goods in the direct-to-consumer model. They worked to develop organic products that were comparable to that of Whole Foods.
By controlling the supply chain from end to end, they can cut the middleman and some of the price. At the start, they were even able to charge just $3 for any product they had. They also put a spin on branding and marketing itself. Co-Founder and CEO Tina Sharkey spoke about ‘BrandTax,’ and how it can increase the price of an item by 40 percent. This money was simply to gain the product a premium status. By not following that tradition and simplifying packaging, Brandless was able to pass savings onto consumers.
Unfortunately, the host of challenges awaiting Brandless were too many to overcome and the company needed much longer to prove profitable.
Source:
https://www.retaildive.com/news/brandless-shuts-down/572057/
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