Profile: Brandless
You can’t discuss startups or modern business culture without a company's or individual’s brand quickly coming up. Branding is one of the cornerstones of the entrepreneurship world and is one of the hottest topics in the industry today. Startups can spend extensive amounts of time developing their brand and many go so far as to bring in outside consultants to help develop it even further. But, one startup is doing almost the opposite by building a company that intentionally has no brand. Brandless is an online grocery shopping outlet that was officially launched on July 11th, 2017 and is based in San Francisco and Minneapolis. It has a truly unique brand if indeed it can be called that. Their basic logo, which consists of only their name written in black text, is basically all there is. This startup is banking on the assumption that millennials do not care about the brand for their purchasing power and are only concerned with the product.
The company has pitched itself as “Proctor & Gamble for Millennials” and that doesn’t seem to be too far off. They are selling just about everything, from food and household items to beauty, personal care and health. They even have an office supplies section. Brandless’ food section is quite extensive and features everything shoppers are likely to be seeking from a typical grocery store and naturally also provides vegan and gluten-free options. What truly stands out as unique about this startup, though, is unlike many of their competitors within the consumer goods industry, all their products have the same price. Everything is priced at$3. To them, better does not mean more expensive--better means keep it simple.
It is clear once you sign up online for Brandless, they are abiding by the Walmart theory-- it is better business to offer a lot of products for a low price rather than a few luxury items not everyone can afford. Their items are also BrandTax free, as the company abides by the theory that the hidden BrandTax costs that we pay for national brands do not often increase the quality of the items. Ultimately, doing away with BrandTax enables a company such as Brandless to offer their products at a consistently better price. According to the company website, pricing has been benchmarked by the Brandless team across five major retailers, both online and in-store. They use this information to calculate the average BrandTax of each item featured in their everyday essentials section. A shopper’s BrandTax is calculated quarterly and users can see their savings on their account page.
Halfway through 2017, Business Insider reported that Brandless had recently closed their B Series round of funding with $35 million dollars, raising the startup’s venture funding total to $50 million dollars. Their list of investors includes venture capital firms such as seed staged focused firms Redpoint Ventures and Cowboy Ventures and Google Ventures,as well as the investment arm of Alphabet, Inc. Recently, these investors were joined by New Enterprise Associates.
It seems likely that this company’s success with venture capital funding may be largely due to its founders. Co-founder Tina Sharkey, who serves as CEO, is no stranger to the world of venture capitalism. Before the creation of Brandless, Sherpa was a partner at Bay Area venture capitalist firm Sherpa Capital. She holds a Bachelor of Arts from the University of Pennsylvania. Her fellow co-founder and company Chairman Ido Leffler is a serial entrepreneur who, prior to his days with Brandless, founded several startups, including school and office supplier Yoobi and Beach House Group, a global consumer product solutions house. Leffler studied marketing and international business at the University of Technology Sydney. His simplistic approach to good business is clear in the models of every startup he has a hand in founding. Both Brandless and Yoobi feature the phrase, “It’s that simple” in their company descriptions. The team behind Brandless describes themselves as, “A group of thinkers, eaters, doers, and lovers of life with big dreams about changing the world.”
Why did this company choose $3 as their universal price? According to Business Insider, it was chosen because to the startup’s founders, it represented the “middle point between value and quality.” Their mission in choosing it was to find a price that would make their customers feel at ease while shopping on their site and for this reason, a fixed $3 price tag made the most sense. All items on the site are created with manufacturing patents, making them unique to company label that is Brandless. The giants of the e-commerce world, such as Amazon.com and Alibaba Group, operate very differently from the fixed price business model used by Brandless, using an algorithm to determine their varied prices and also factoring in elements such as free or expedited shipping. The online shopping experience at Brandless is a stark contrast to this since it offers shoppers a fixed price that is always reliable, regardless of the product.
Brandless also offers a membership-based plan called B.More for $36 per year which offers shoppers free shipping on all orders. The company website also claims that B.More members can save an average of $580 per year as well as an extra $460 on BrandTax alone. In addition, Brandless promises to donate 10 meals to people in need when a new customer signs up for B.More and two more each time they make a purchase. These additional benefits have a message for millenials and others attracted to the model: our company provides a new, simpler way of making a difference in how you shop and how you give back.