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Alok's Posts / Startup

How to make 15 CRORES in 1 day from FROM an E-COMMERCE SITE!

Take a look at this checkout page on



So, technically, I am just 1 click away from BUYING a Rs 95 priced GARNIER MEN HAIR COLOR PRODUCT FOR Rs 15!!!!




Now, I found out that has got 5 million US$ in funding.


That’s Rs 25 CRORES.


Assume that they have 24 Crores in the bank (1 crore spent already), it means that IF AN ORDER COMES, then they can BUY 25 lacs PACKS OF THIS PRODUCT = 24 CRORES in SPENDS (actually  they will get it even less than Rs 90 if they buy 25 lacs from Garnier).


Now, I have to spend Rs 15* 25 lacs = 4. 25 CRORES on!


I get the product delivered to a warehouse.


And then SELL 25 lacs GARNIER PACKS BACK in the market at Rs 80 = Rs 20 CRORES


I WILL MAKE 15 CRORES from this deal!!!!


Pepperfry will SHOW in its books:


Sales of 4.25 CRORES + all the accounting jugglery to show the FREE discounts as SALE to PROVE that the sale was 25 CRORES!!














UPDATE – 1955 PM!


The Garnier Item has been removed from the site>>>???????


The ‘Pepper Points’ are no longer visible???












To further prove how bankupt this model is (of BRIBING PEOPLE TO SIGN UP), check this:




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  1. So is this the big secret behind million dollars funding behind E-Commerce companies in India in last couple of months ?

  2. :-)))))))))

  3. Alok,

    I think if you notice carefully in the screenshot Rs.60 is discounted against the pepper points one must accumulate over the period of time after buying from them ( like a loyalty program) which is usually Rs.100 for one point in credit cards.

    So the discount in technically against the pepper points and not STRAIGHT OFF given to any customer….

    let me know if i have missed any point…. 

  4. Same case here

    Sites like Groupon promise repeat full paying customers which never happens. But who cares, they just needed to do it till the IPO 🙂

    This is surely a bubble.

  5. I do agree that the accounts game is played Big time…………..More so in products like Books (Eg.Flipkart) where the margin is very high. They buy a 125 Rs book for 60. Rs 65 gross profit. Sell it for 100, net profit 35. The Discount is capitalised to be adjusted later. Hence, they show a Revenue of MRP125+ 25 Discount(to be adjusted later. hence for an Actual Sale of Rs. 100, they CAN show the turnover as Rs. 150. This is juts a n example of How Games CAN be Played and are being played. based on “high turnover”, they go to VC’s and get funding at appreciated price.
    PS: I am not mentioning any Specific Brand here as it’s all my assumption on how things can be payed and am sure some people are playing it.

  6. Saurabh,

    I think you and I got the point in this article.


  7. Hi Alok, just wanted to know for how long this great ponzi scheme could go on so that i can prepare accordingly my exit plan.


  9. YES!!!

  10. I paid Rs 15. Your move Saurabh!

  11. Saurabh,

    Check out their PRICING of Pepper points!

    Its ACTUALLY RS 1 per point!

    That means, the TECHNICALLY, if a mafia gang got together, registered 10 lac accounts and shipped the lowest product out, AND OBVIOUSLY NEVER CAME BACK, the business would be LESS 20 CRORES!

  12. Seems wants to do everything ranging from Jewelry to Furniture….lolllll

  13. Ok – now they are PAYING customers!!!

  14. Excellent post as usual 🙂 

    E-commerce is like Stock Market. 

     Lot of people will be gaining when the market is on the rise. But when the market falls, a few of them suffer huge losses.

    Now, people who build these e-commerce sites are going to benefit because, they would be sold off to some bigger players. The bigger players buy not for profits from these companies, but to minimize their competition.

    When the consolidation happens and very few players are playing the game, no one wants/can afford to buy the company. The money spent on buying the companies will take forever to recover. So, now they take the easiest route – IPO. If they can IPO, well and good. Otherwise, Ohh well!! 

  15. Ladies & Gentlemen, Boy & Girls,

    Let’s not spoil the eCommerce boom with such a bad strategy. I wish we can learn what happened during the dot com boom. Let’s make really healthy business models that can survive for years to come.

    I wish the investors spend money on an eCommerce venture knowing that there is a need of this product so lets build an eCommerce Website. Working with niche category and building a brand under that category is the game changer. Please take some learning from the US eCommerce niche websites. Creating demand is definitely the goal but lets not throw eCommerce money in the BLACK HOLE.

    If the model of is same the way Alok explained, and if the model of all other eCommerce websites are the same then boy we are again here for an eCommerce bubble. But I am happy that 1999-2000 will never repeat again as there are eCommerce website that really addresses to the need of the consumer and there is demand. 

    (Alok – You are a star then and now! )  >> This appreciation is not because you have a surname Kejriwal 🙂

  16. i think this is cost of customer acquisition? depends on how many times people come back to reorder and stay with the site. then may be worth it. its a sinking ship the entire model (groupon being the titanic… ) 

  17. Super Nova- Even i have a vision of e-comm venture but not the way pepperfly ways to get customer,fucked up products &  waste investor money in some type of peppery points…

  18. haha… well this is not a sales strategy but a marketing strategy to create buzz and virality. And you my friend are very much peppering the buzz :). I see other sites giving 50-100 bucks for joining them. Customer Acquisition strategies have gone haywire with VCs doling out cash randomly, reminiscent of 1p per sec battle

  19. Check this out

    This same photo frame is available on (link below) by the same vendor. But peppery is selling at a lower price with international deliveries ( burning investor money) 

  20. Alok, 

    Good to see you got something for so less 😉 you should be happy as a customer and thanks Vc’s for funding these kind of sites for million of dollars.

    As @ambika rightly mentioned that their understanding on Rs.200 is the cost of customer acquisition and there is no harm in it as long as  it’s in sync with their business plan.

     I appreciate you for having a eye on finding a technical snag in so called million dollar funded ecommerce website the “IN THING”.

    but still it’s a small problem which can be addressed immediately ……covering your above point of 10 lac fake accounts…….can be dealt by them if they start to give redemption of loyalty program points  upto 10 points per transaction or 20 points per transaction …….or if the billing goes above 5000 it can be redemeed immdly…..or the redemption of (200 points thru first time registration )happens only after the customer acquires 300 more points that is total of 500 points ……..

    We should still give them a chance as they say that they r in “BETA” mode 😉 

    so finally the point of consideration should be very basic that ……if  they r generating that kind of sales and finally profits which would justify the funds & resources employed ……….

    Given that ecommerce sites buy in bulk, save on retail space…..distribuor margins…storage etc…etc…..but the question is whether people will buy………???

    In my other discussion i have raised a very fundamental question of buying specific stuff from ecommerce sites……..My suspicion would not be of some technical issues  but very basic…. that how many people would buy private labeled apparel,footwear,(furniture to some extend) etc. from a ecommerce site. 

  21. WOW. Thanks for posting this. Now i can relate to how companies give away products for dirt cheap prices 🙂

  22. shocking !  I thought there is a genuine demand for ecom sites & products

  23. i believe thr is, it solves a lot of problems. Just that market is in a state of super-competition or super-survival mode, the last few who survive win bigtime. thts fun.

  24. The thing is that you bought Garnier Men colour shade online instead of going to a local offline store. That is probably the change in buying behaviour that e-commerce is driving. Probably there are lot of investments people are doing on that front.

    In the offline world the idea of reward points works very well for retailers since around 70%(not sure of the exact number) of the points accumulated are not redeemed. It might turn out adversely online.

  25. I haven’t yet figured out what the investors are smoking or for that matter the market itself is!

    After all the stuff on Groupon it still manages to go and do an amazing IPO(little consolation that the stock has been falling ever since).

    Best time to be the top dog actually:When was business only about spending money?

    If its my capacity to take in the maximum losses where is business acumen in that ?

    Raise a million ,Burn a million get a 10 million valuation(its as friggin simple as that) !and yes, come back , take another million!

    Only profit is real , rest is insanity.Its a mad mad world and lets party till the music stops.


  26. Is it a fact that are Indians buying stuff over the internet in such huge quantities.

    Is Flipkart generating enough revenue per month so as to pay the bills of 4661 employees and its warehouses and offices around India.

    Recently heard that gets around 60,000 visitors per day. Is it possible?? And why should i buy garments from internet, don’t people need to go for a trial(touch and feel of the clothes) and is shopping a bare necessity that needs to be filled in any possible way or a luxury( i mean like walking on streets, having fun, getting into shops, these all things make a human feel better). 

    And what are VC’s seeing in the e-commerce thing, why so much of easy money out for all the same prototype business.

    A mystery !!!! 

  27. Alok,

    Would like to make few points here and know your perspective on the same:

    1. In a situation of a planned sabotage on the business model by a mafia gang, can the Company not renege on its promise to supply of the materials, if it is able to decipher this mischief? Assuming that the Company has a tool in place to analyse patterns in its order flow to identify such occurrences and also make a provision in the terms of use/terms and conditions of its website, a legally tenable right to cancel its decision to fulfill a order, it might save itself from such a situation of a planned attack. It can reserve such a right to cancel its decision to supply/sell by putting a rider in some corner of their website – terms of use section/registration form etc (which most people choose to ignore).

    However I do see a possibility that the disgruntled mafia gang (which could be a competitor) might then hold this against the Company and tarnish/bad-mouth the Company’s services as poor and unreliable. Am not sure how can this be addressed or how would the Company salvage the situation then!

    2. On a cursory look at the site and it’s products (after I saw your post), I saw that they have a large variety of stuff typically of two-three brands (in each category). I am guessing that they could have struck a very strong deal in terms of the margins/discounts from these brands and managed to keep their prices abnormally low apart from all other reasons typically attributable to an ecommerce business model (low overheads etc) and by compromising on their return expectations till they are sizeable in terms of their order flow. The reward points are not encashable in any way and hence assure repeat business in order to get utilised by the customers. Reward points on registration and this garnier type of product/deal could be initial strategies for customer acquisition which is probably planned to be phased out after a set target of business volumes/customer base.

    3. Would like to make one last point on the accounting jugglery. Am sure you know that per the accounting guidelines the Company will be able to book sale only at the actual price at which it made the sale and neither the list price/nor it’s own purchase price. The most creative accounting trick that the Company adopt is book sales at the list price or the MRP and book the discount as an intangible asset (customer acquisition costs), thereby over-state it’s top-line and assets size. Now this is explicitly not permitted by the accounting standards in India as well as globally (customer acquisition cost capitalisation is subject to very strngent rquirements). It would be hard to be believe that the VCs would not be able to figure out such a jugglery perpetrated by the investee even with a little common sense (though I have often come across investors who have a decent accounting knowledge). Appointing a good dd guy pre-transaction stage and an auditor thereafter should give some comfort investor but an investor who cannot understand on his own this, deserve to lose his money, may be!

  28. Surprise they still don’t have it. 

    I recently saw upto 90% off on Flipkart, I think they would start the sale from tomorrow. Imagine if they sell only 1 product at 90% off, what does that mean, are they making losses, if so why don’t they sell it for FREE.

    Similar example as your’s, If i buy all their stock and sell it in market, I can at least make 50% profit.

    So what are we trying to do? 

  29. Excellent post. Would be very interesting to see how ecommerce business heads in India in days to come.

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