Case Study The Grommet

The Grommet is a product launch platform dedicated to bringing attention to unique, quality-made products built with integrity by independent makers, who act as The Grommet’s suppliers.

With the belief that consumers have the power to make business meaningful, The Grommet aims to see 10 percent of products flowing through U.S. retailers originating from small makers by 2020.
 

Challenges Prior to Shipwire

As a product launch platform that works with more suppliers than Ford Motor Company or Walmart, and uses a hybrid fulfillment model of 3PL and drop ship, The Grommet was growing quickly and its software for managing drop shippers wasn’t scaling with its needs.

1. Order tracking and supplier management issues
   With so many drop shippers, The Grommet had difficulty managing order information. This led to issues with tracking numbers, and without accurate tracking, the company couldn’t monitor the performance of its suppliers. Some suppliers shipped on time, others didn’t. “Suppliers would be posting tracking numbers manually into our system and a customer might receive their item before they even received their tracking number. It was a real problem for us,” said Jason McCarthy, Director of Grommet Wholesale.
2. Challenges with inconsistent customer experience
   The Grommet works with drop shippers and ships its own inventory, and depending on whether an item was drop shipped or fulfilled by The Grommet, the checkout experience was very different. “A customer needs to check out with one shipping rate. It needed to make sense and be a clean experience,” said Jason.

   Not only were shipping rates different, but orders arrived with inconsistent branding. “Another challenge with having so many drop shippers is standardizing the experience across all shipments,” Jason explained. Prior to working with Shipwire, orders were arriving without much thought to branding, and The Grommet wanted to present a more consistent brand image.

3. Multiple shipping accounts prevented access to clean data
   The Grommet’s pain points centered around a general lack of control, which extended to data management. When shipping orders, suppliers often used their own accounts, which meant The Grommet couldn’t aggregate order volume into a single account. This made it impossible to receive volume-related shipping discounts or to accurately calculate shipping costs. “We didn’t have any cost data, so when we would do our financial reporting, we essentially had to estimate what it cost us to ship all of our packages and that was just not a sustainable solution,” said Todd Mannherz, Senior Software Engineer.

   Based on the scope of its challenges, The Grommet knew it needed a better solution – one that offered flexibility and scalability. “We were adding vendors everyday. We were looking for a technology partner that worked with software and that worked with the fulfillment center so that we could have both pieces,” said Todd.

Partnering with Shipwire to enable a Drop Ship for Retail Solution

The Grommet began its relationship with Shipwire in 2012
Originally, The Grommet reached out for help with 3PL order fulfillment of the products it bought wholesale. (Meanwhile, it worked with thousands of suppliers to maintain an evolving and curated line of products).

At the time, Todd explained, “We actually fulfilled about 40 percent of our orders ourselves and we’re not a fulfillment company – we’re a product launch platform and it just wasn’t what we should be doing. The idea was: we get rid of our fulfillment center, we outsource that. It’s way more efficient.”

By 2013, The Grommet’s popularity had grown exponentially and the drop ship component of its business was expanding rapidly. Knowing that its exsiting software could not scale as needed, The Grommet approached Shipwire for help enabling a custom Drop Ship for Retail Solution to help manage its thousands of drop ship suppliers, in addition to the 3PL order fulfillment Shipwire was already providing.

In my role as CEO, one of the things I always talk about is putting a human face on business, and sometimes when you get behind the scenes of another business or you deal with other companies, that’s not so easy.


The thing with Shipwire is that I did find that human face, that ability to deal with people who would actually dig and and understand our business.

— Jules Pieri, Founder and CEO, The Grommet

The Grommet’s trust in Shipwire had already been established due to their existing partnership
The Grommet had seen Shipwire’s commitment to establishing partnerships that benefit its customers, and in explaining how she identified the right fulfillment technology partner, Jules Pieri, Founder and CEO, explained, “In my role as CEO, one of the things I always talk about is putting a human face on business, and sometimes when you get behind the scenes of another business or you deal with other companies, that’s not so easy. The thing with Shipwire is that I did find that human face, that ability to deal with people who would actually dig and and understand our business.”

Having seen Shipwire’s ability to find creative ways to simplify order management complexities reinforced The Grommet’s confidence in Shipwire’s capabilities. “What I saw was this sort of nimble, software-oriented team that didn’t come at logistics with a conventional point of view and I knew if I came in and slammed them with amazing growth — which I fully intended to do, and we did — that they wouldn’t be rattled,” said Jules.

The Shipwire platform and related technology was a critical component of its appeal. Since The Grommet runs on Magento, “We wanted to be seamlessly integrated with our shopping cart and Shipwire was the best partner to be able to do that,” said Jason.

“On the technology side, we needed a portal that our makers could log in to – one that gives them full visibility on all the shipments they need to send in a given day or a given week,” Todd added. With Shipwire’s APIs and Professional Services available for engineering assistance, The Grommet was confident that Shipwire would be the perfect partner in enabling a Drop Ship for Retail Solution.

Working with Shipwire

With its drop ship vendor management portal now built and running on Shipwire APIs, The Grommet’s order fulfillment operations are running smoother and much more efficiently than ever.

An Order Management System enables more control over supplier performance
Through Shipwire’s API, shipping labels are automatically available for every order. “Suppliers log in to their drop ship vendor interface, they can print out all their shipping labels, and it’s all saved back to us, so that gives us a lot more visibility into the entire fulfillment process,” Todd explained.

“By using Shipwire’s API to generate labels, we know what the tracking number is immediately, we know when an order has been shipped, and we’re able to send that information to the customer. It makes for a much better customer experience,” added Jason.

Customer experience has improved throughout the entire shopping experience
In addition to consistently receiving accurate tracking information, The Grommet’s customers now see one shipping rate upon checkout and receive orders with The Grommet-branded packing lists.

“Shipwire’s API is able to rate every single shipment that’s in an order, so if a customer orders from five different suppliers, that could be five shipments coming from five places, but on the front end, the customer is just seeing one order, one shipping rate, and everything is accurate,” Jason explained.

To further enhance the customer experience, “We’re now able to generate branded packing lists. So if you’re getting a drop shipped shipment from a supplier, you’re getting the same experience as if the order was shipped directly from Shipwire, and the packing lists are branded from The Grommet, which has been a great win for us,” he said.

The Grommet has aggregated all shipments into one account, reducing shipping costs
The Grommet’s drop ship suppliers no longer ship from individual accounts. The vendor management portal allows all suppliers to ship from the same account. “That’s a lot better for us in a couple ways compared to our old solution,” said Todd. “One, we ship a lot more against it so we get much better rates. Second, it give us insight into who is shipping what so we really have the control. This was a huge problem with our old solution.”

According to Jason, before making the switch to Shipwire, “About half of our orders were getting drop shipped and half were going in-house, so we were able to get discounted rates on only 50 percent of our shipments.” Now that The Grommet can leverage Shipwire’s shipping discounts, “We’re able to show a cheaper cost to the customer, which helps our conversions, so we’re seeing an increase in sales. It’s a win for everybody,” he said.
 

Looking Ahead

The Grommet’s drop ship structure is expanding rapidly. “We’re adding vendors everyday. When we first mirgrated to Shipwire, we had about 600 and now we’re well over a thousand and the system has scaled very well with us,” said Todd. Of the Shipwire APIs, he added, “We need just a hundred percent uptime from those APIs and that’s been consistently delivered.”

The Grommet has set aggressive goals and is on target to meet them. “Ultimately, by 2020 we expect to be a billion dollar business,” said Jules. “We’re doing that with this continued base of really interesting small suppliers who don’t understand logistics, and we needed to take that problem away from them. Doing that with Shipwire has turned out to be a really smart decision.”
 

In Shipwire, The Grommet found:

• A fulfillment partner with global reach and a robust Drop Ship for Retail Solution
• A flexible, and scalable SaaS technology platform that enables 3PL fulfillment and drop ship channel growth
• Custom solutions supported by a dedicated and responsive Professional Services Team
• APIs that enable custom integrations to your existing business systems and processes