Jules Pieri has run The Grommet — a site that launches innovative, sometimes quirky products made by thousands of small businesses — for the past 12 years, and wasn’t expecting the quarter she’s currently having. Sales are up by 30 percent.
In these days of shutdown, it helps that The Grommet’s products “are super relevant for turning your home into a gym, school, office, commercial kitchen, et cetera,” says Pieri, who along with her 74 employees is now working remotely to fulfill orders. Current best-sellers include exercise gear, gardening supplies, educational materials, bread-making kits … basically, everything on a quarantiner’s wish list. “We are really helping our makers stay afloat and even grow in many cases.”
But while her marketplace has seen a Covid-19 spike, Pieri worries for the future of independent craftspeople, inventors and entrepreneurs. Many of her merchants also rely heavily on Amazon.com to list and sell their products to a much broader segment — and since the coronavirus crisis, Amazon has limited sales of non-essential products to speed up deliveries of items like household staples, diapers and medical supplies.
Last week, Amazon also reportedly decided to cancel Mother’s Day and Father’s Day promotions, scale back coupons, and re-tool its site to persuade shoppers to put less in their carts, according to The Wall Street Journal.
“Some of our makers will be put out of business by the Amazon shutdown,” she says. “That will be a travesty in the economy to lose those companies.”
A Critic of Amazon
Even before the pandemic hit, Pieri had become a vocal critic of Amazon. When we interviewed her in January to produce the above video, she called Amazon “the largest net destroyer of innovation in history” because of rampant counterfeiting on its site. Since 2015, the giant marketplace has allowed international sellers — say, a merchant in Shenzhen, China, who has easy access to cheap counterfeits — to list wares on Amazon.com.
Time after time, Pieri says she has witnessed makers’ products, often developed over the course of years, get knocked off on Amazon almost immediately after launch. “In the case of our little companies, [counterfeiters] look for something that seems to be succeeding and they cheapen the product, copy it, they steal the brand names, the photos, all of the trademarks of the company,” she says.
Then, “an innocent consumer buys it, not realizing it’s a fake or a counterfeit and it fails,” she continues. “Amazon’s not responsible. The Chinese company is nowhere to be found. They have no office in the U.S., and the consumer gets mad at the originator whose blood, sweat, and tears created that product.”
Since the pandemic hit, and China itself had to shut down its factories for an extended time, Pieri suspects counterfeiting may have eased — but just temporarily. “I don’t think it would impact the nefarious players [forever], but they might have had their operations slow down,” she says.
For its part, Amazon has consistently defended its practices, saying it moves quickly to protect consumers and sellers from counterfeiting when need be. As for the recent decision to prioritize deliveries of essential items, CEO Jeff Bezos noted in a letter to shareholders on April 16 that the Covid-19 sales spike “occurred with little warning, creating major challenges for our suppliers and delivery network” and that consumer demand for those products remains high.
A Market Correction?
A champion of craft, Pieri started The Grommet in 2008 with business partner Joanne Domeniconi to help small manufacturers beat the odds. As an industrial designer, Pieri had years of executive experience at Keds, Stride Rite and Playskool, and she knew that innovative products would often die on the vine if big-box stores like Target, Kmart and Walmart weren’t interested.
The Grommet works as a product-launch platform, where the staff tests out novel new products and gives them a thorough vetting before unveiling them to consumers, often with video reviews. The Somerville, Massachusetts, company has helped launch brands like Fitbit, GoldieBlox and SodaStream. It pulls in over $50 million in annual revenue, and counts Ace Hardware as a majority investor.
While she’s worried about the long-term impact of Covid-19 on makers, Pieri thinks that something like a market correction is happening. Small players, she hopes, will finally understand that they need to diversify and not rely too heavily on Amazon for sales. Consumers, she believes, will realize that there is more than one marketplace than Amazon, and that other companies can provide safe, fast, reliable shipping.
“In the long run, if this means consumers and small business founders understand those dynamics better, it could be healthy,” she says. “We’ve been seeing this for years, but this [the pandemic] made it real.”
Jules: Retailers are afraid to take risks on new products. Will it work? Is it what it says it is? Doing the legwork and de-risking them is just not feasible for them. We do that work. We make these products accessible and less risky for them.
TEXT: Jules Pieri – CEO + Co-Founder, The Grommet – Boston, Massachusetts
Jules: At The Grommet, we launch innovative products from independent makers. From kitchen to outdoor gear to toys, our job is to level the playing field so that you can find them.
Jules: I went to the University of Michigan. Industrial design became my major. Industrial design was this blend of business and creation. I got to create things but also answer business needs. The first portable computer I ever saw, I designed. Like, it was 1981 so people didn’t have personal computers at all.
TEXT: After Jules graduated in 1982, she worked as a designer at an IT company.
TEXT: Then she realized she had bigger ambitions.
Jules: I aspired to being a decision maker as well. I saw how getting an MBA would really help me get where I wanted to go.
TEXT: With an MBA from Harvard Business School, Jules went on to work at Hasbro’s Playskool.
Jules: When I was working at Playskool, I noticed that our best products, our new products, didn't make it to market. They would get to prototype and then fall off the table. So I went to my boss and she said, “Here's the deal, we're losing all the independent specialty toy stores who take chances on new products. So today, if Kmart, Target, Toys R Us or Walmart don't want it, we can't make it.” And that's where it sort of occurred to me, like, “This is a problem, that the best products never see the light of day. I want to help these makers. I want to build a community and build a platform for them.”
TEXT: She recruited Joanne Domeniconi as co-founder.
TEXT: Jules raised $365,000 in startup funds.
Jules: I was able to raise our first capital because I was 47. And when you're 47, you know people who've succeeded. And in particular, it was my business school friends.
TEXT: They launched The Grommet online in October 2008.
Jules: We test about 30 products a week and we get very close to these companies, learning whether the promises they make are true, whether it’s a product made in the USA or made sustainably or if it’s a social enterprise. And then we do produce original media—video, copy and campaigns. And really stick with these companies.
TEXT: After using their startup funds, finding capital to grow was almost impossible.
Jules: Every young company’s going to have massive challenge. Ours was financing.
TEXT: Over the next 4 years, Jules was rejected by 250 venture capitalists.
Jules: I was told I was too old, too blonde, too female. “She doesn't look like a CEO.” I ended up reaching out to a CEO of a company called Rakuten, a Japanese company in Tokyo. Total hail Mary. Didn't know him, wrote to him, he wrote back within seconds. I met him three weeks later. He invested two months later.
TEXT: Rakuten invested $4 million in The Grommet.
TEXT: Jules and Joanne grew the company, selling online and to retailers across the country.
TEXT: In 2017, Ace Hardware bought Rakuten’s stake in the company.
TEXT: Today The Grommet employs over 90 people.
Jules: What I see after 11 years is that people do seek deeper meaning in their lives in all kinds of forms. It sounds crass to say that our purchases are expressions of our morals, but they have become that because we form the world we live in a great deal by the companies we support or shun.
TEXT: The Grommet has annual revenues over $50 million.
Sue: So what is a grommet?
Jules: A grommet's a piece of hardware. It's what you might find on a tent tarp or at the top of a shower curtain. I like the way it's like this humble piece of material that sort of surrounds something and protects it. And that's what we do, we surround these makers and we protect them and take care of them.