Brandless, Billed as Amazon Alternative, is Shutting Down
Just two-and-a-half years after it launched, online store Brandless is shutting down. The company, which sold inexpensive, simply branded household, personal care, baby, and pet products, is no longer taking orders and has laid off 70 people. The last 10 employees still working at the company will process the remaining few customer orders and “evaluate any acquisition offers,” according to the tech news site Protocol, which first reported the news. On Brandless’ website, the company attributes its downfall to the crowded e-commerce market. “While the Brandless team set a new bar for the types of products consumers deserve and at prices they expect, the fiercely competitive direct-to-consumer market has proven unsustainable for our current business model.”
Total Retail's Take: This is a dramatic and hasty ending for a company that generated a lot of buzz for its innovative business model — bringing the direct-to-consumer business model to the consumer packaged goods industry. The fate of Brandless was in peril after its primary investor, SoftBank, poured $240 million into the business in July 2018, with the expectation being that there would be a quick turn on that investment. Brandless struggled to generate a profit in the timely manner that SoftBank demanded, leading to management upheaval. Add to that increased competition in the marketplace, and the business was doomed.