Since 2008, Jules Pieri has been helping startups sell their products on her Somerville-based e-commerce site, The Grommet. This week, her world was shaken as she got a first glimpse of another site with an extremely familiar concept. The retailer? Amazon.com, which unveiled its new storefront, Amazon Launchpad, on Tuesday.
That’s Amazon — the company that has no problem losing billions of dollars in order to establish its dominance in a market.
“It looks like looking at an ugly version of Grommet,” Pieri said, noting that Launchpad borrows heavily from her selection of “sexy items” like wearable devices, connected “Internet of Things” products, and “smart” home gadgets. She estimated that nearly a quarter of the entrepreneurs featured on the new site overlap with her own.
Amazon’s plan to partner with startups looking for a larger distribution channel isn’t an altogether surprising move. But it’s a confirmation that there’s a shift in the way the company is thinking about how best to sell different kinds of products, Pieri said.
“There’s a new industrial revolution, which involves the fragmentation of our manufacturing economy and a renaissance of small producers” who use crowdfunding sites like Indiegogo and Kickstarter to launch their products, she said.
To get Launchpad up and running, Amazon partnered with 25 venture capital firms, startup accelerators, and crowdfunding platforms that have funded these products, including Andreessen Horowitz, Y Combinator, and Indiegogo. Launchpad helps startups “by using Amazon’s retail expertise and infrastructure to create awareness and drive sales,” said Lori Richter, an Amazon spokeswoman.
“We always had Amazon as part of our road map,” said Jason Egnal, the vice president of digital marketing and consumer operations at Thync, which sells a “neurosignaling” device that creates a sense of calm or alertness for its wearer. The biggest perk of the Launchpad partnership, Egnal said, was Amazon’s fulfillment infrastructure. Thync can now send its devices to the distribution centers and have Amazon worry about the shipping, he said.
Sims McGrath III, marketing manager at Pavlok, which produces a bracelet that sends an electric shock to wearers when they engage in a bad habit, said Launchpad provided an opportunity to tell the company’s
“We were able to share details about our company, our mission, our CEO, and some of the success stories that have come from early users of Pavlok,” McGrath said. The company, which has made 3,000 sales through its own website, is “mentally preparing for an influx of orders, based on Amazon’s global reach,” he said.
Staring down he barrel of Amazon’s gun can’t be fun. Pieri said The Grommet will start negotiating contracts with entrepreneurs featured on her site to ensure they won’t also partner with Launchpad.
Sure, there will be an initial buzz among makers about being on Amazon, she said, but Amazon’s track record of pushing down prices may signal a disturbing end to all the good vibes for its new partners. It just isn’t in their best interest, she argues.
“It will be a lot like crack,” she said. “It will feel really good and it will hurt really bad.”
Janelle Nanos can be reached at email@example.com. Follow her on Twitter @janellenanos.
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