Are $3.00 generics a sound grocery e-tailing model?
A new website, Brandless.com, just launched, selling everyday items “from snacks to soap to serving spoons” for $3.00 each. The catch: all items are generics.
Started in 2016 by Sherpa Capital venture partner Tina Sharkey and entrepreneur Ido Leffler, Brandless has raised $50 million to date.
In a blog entry, the founders wrote that national brands on average charge 40 percent more than same-quality generics. While the mark-ups are said to support the quality of the products, “they rarely do.”
“At Brandless, everything is ‘BrandTax-free,’ which means we’ve stripped out all of those excess costs,” the founders wrote. “It’s how we’re able to offer the best stuff at the fairest price, everyday, to everyone. That’s why our Daily Moisturizing Facial Lotion costs 367 percent less and our Blueberry Flax Granola costs 90 percent less than top household brand products with similar quality and ingredients.”
Brandless promises “better” product quality. Many food items, for example, are non-GMO, organic, certified free trade and free of preservatives. Brandless strives to keep costs low by selling directly to consumers, working directly with manufacturers and offering limited assortments.
While limited, the founders tout the benefits of “streamlined shopping” with Brandless’s edited assortments of better products. Their blog entry reads, “We’re not overwhelming you with options (there aren’t 100 pasta sauces to compare, there are three) or forcing you to over-consume (no need to stock up to save, you can get great value buying just one).”
Launched with 115 products across food, health & wellness, beauty and home goods, Brandless expects to double selections within two months. The company charges a flat shipping fee of $9 but orders totaling at least $72 (26 items) are shipped for free. Brandless will also be donating a meal to Feeding America, the hunger relief organization, for every order.
Brandless’s chief merchant is Rachel Vegas, who was formerly VP, GMM, center store, grocery at Target.
“We’re doing a couple of different things that are game-changing,” Ms. Vegas told TechCrunch. “People see ‘Brandless’ and think, ‘Are you anti-brand?’ Absolutely not. We’re redefining what it means to be a brand.”
- Brandless : Open for Business – Brandless
- With $50 million in funding, Brandless sells everyday essentials for $3 each – TechCrunch
- Meet Brandless, the Store Where Everything You Need Is Just $3 – NBC News
- What does $3 buy you? On this Web site, everything – USA Today
DISCUSSION QUESTIONS: Will $3.00 generics available online hold much appeal for consumers? What will be the keys to Brandless achieving success?