Brandless, the new direct-to-consumer play gunning for fast-moving consumer goods that raisd $50 million in VC, is advertising a simple way of shopping for those goods online: One price ($3) for every product. This, in theory should reduce the mental overhead in shopping, in addition to doing aways with brands in favor for private labels. It‘s a concept that in itself already sounds at least debatable.
Business Insider did a price comparison with similar products at Trader Joe‘s:
We did a price comparison between 24 products you’d find at Brandless and products you’d find at Trader Joe’s and Trader Joe’s came out on top.
Only four products out of the 24 that we price-checked were actually a better deal at Brandless. We found that although the $3 prices sounds like a good idea on the surface, the product sizes are usually pretty small for the cost. Take for instance a $3 jar of 12-ounces of mayonnaise, which is a whopping $.25 an ounce.
It makes sense to adjust the package size if you can‘t adjust the price. One of the oldest tricks in retail to disguise a price increase is to keep the price the same and change the attached size instead. But if Business Insider can see this, price sensitive customers will do to. And word will go around.
Once you realize for the first time the product sizes at Brandless make their products more expensive (and harder to compare!), the site’s main appeal goes away.
The one unique selling proposition Brandless was going for, making shopping for FMCGs as simple as possible, just evaporated.
Add to that the flat shipping rate of $9 , the high free shipping threshold and the rather unattractive subscription service, and you get an offering no one asked for.
Brandless has a lot of work to do.
More on this topic:
* Why Did Investors Put $50 Mio. In Direct-to-Consumer FMCG Startup Brandless?
* Here Is What a Big Part of Amazon’s Endgame Looks Like
* Here’s the Investment Thesis of the VC Behind Jet.com and Dollar Shave Club
* Direct-to-Customer: What Mack Weldon, the Next Brand Superstar, Is Focussing On
* Walmart Is Acquiring Bonobos for $310 Million in Cash