Grimm’s Wooden Toys & Geo-Fencing: Building a Wall to Keep Americans Out
Geo fence: A geofence is a virtual perimeter for a real-world geographic area.
“Geo-Fence”, Wikipedia.org, 2020 May 16
It started off as a rumor back in the Fall of 2019. You’d see it mentioned in passing by store owners. “Well, Grimm’s eventually wants us to stick with our own region.” No one pressed any further. Just like when you were twelve and your mom said, “I’ll think about it”, you knew further pressure for answers won’t yield positive results.
Then the e-newsletter from 100 Toys broke the story. On February 23, 2020, their e-newsletter had a tiny blurb that went unnoticed by most:
“If you are one of our international customers, today is your last chance to buy Grimm’s from us. Grimm’s have asked all retailers, worldwide, to only sell within their geographical location. That means that if you’re in Australia, for example, you’ll have to buy from an Australian seller. I’m not sure how this rule will work in practice as I suspect it will simply push the sales onto third-party platforms, like eBay and Amazon (at higher cost to you), but we have to respect their decision.”
A list of the 100 toys I recommend for under 5s. (2020 Feb 23) 100 Toys e-newsletter
The backlash was immediate and the confusion was evident. Across the wooden toy forums, the debate raged about the fairness of Grimm’s new policy. Once I had a firm grasp on the ramifications of this, I started reaching out to my contacts in the wooden toy world. To me, it felt like a very poorly planned decision.
My source remains anonymous, as no one wants to anger the megalith known as Grimm’s Spiel und Holz. However, the source was adamant about one very particular point: The retailers didn’t know beforehand.
The implication of that is enormous. Most retailers were advised the same day their customers found out and scrambled to create workarounds for their e-commerce sites. While American customers raged at their surprise cut off from Babipur, Canadian companies like Nest worked on creating mirror sites for their businesses – one for the Canadians and one for the Yanks. In addition, most American stores did not have enough Grimm’s in stock to manage the panic buying that ensued. My source advised that had they been warned, they would have significantly ramped up their previous Grimm’s order to help quell the fervor.
And then of course, there was COVID-19 and suddenly everyone was inside with their children and looking to get their hands on new toys to entertain them. Most stores were out of all their Grimm’s stock by Saint Patrick’s Day. Throughout the months of March and April, the resale value of all Grimm’s items in the Facebook Buy/Sell/Trade groups began to rise. I spoke with several well-respected moderators of the biggest wooden toy Buy/Sell/Trade group on Facebook (link here). Erin Fortin, the creator of the group advised “I have relationships with other shops because they have great customer service. Many of the shops here [USA] are more ‘cold’.” Forrest Tompkins, one of Ms. Fortin’s administrators /moderators agreed: “It’s only creating another problem and taking away business from international retailers many of us have grown to love or even accumulated rewards with which we can no longer use for the items we had intended”. She continued, “If it’s truly about protecting American retailers, then they need to be provided more stock and price more competitively. If it’s about the carbon footprint, I think Grimm’s can do better than wrapping their rainbows in plastic. Grimm’s isn’t the only toy company. Many moms and families are already stretching their dollars to afford these toys. People are selling these for profit now because the American retailers are out of stock. Moms are sitting by their phones desperately awaiting restock”, or in the author’s observation, falling prey to the inflated price determined by “resellers”. At publication, there was at least one listing pricing Grimm’s pebbles at 200% retail price.
So why do this? Our anonymous source had a suspicion:
“Grimm’s wants to expand their brick and mortar presence in the US. There are huge regions of the country that don’t have a brick and mortar store. When it is possible for US customers to get things cheaper (including shipping) from other countries, there is less motivation for new brick and mortar stores to carry the brand.”
Geofencing has existed ever since international trade began. When the first caveman traded outside his village and got a better deal, his village elders started creating things like export taxing, customs, and duties. There have always been people in power creating a system that limits who can buy what from where. Grimm’s doesn’t have the monopoly on that. However, it seems to this author, that geo-fencing is a practice more applicable to software and marketing, not necessarily children’s toys and puzzles. It’s a very not fun decision to make, in a market that’s sole purpose is to delight children.
It does remain to be seen how the regional retailers, especially in the United States, will adjust to the new reality. Several mail forwarders have already indicated that the costs of their package forwarding is going up exponentially to keep up with increased demand. I don’t think the novice customer or wood toy beginner will know how to sign up for and plan for international restocks and package forwarding. The bulk of new customers will, more than likely, buy from who they are told they can. I do anticipate a burgeoning overseas market in package forwarding for the veterans in our industry.
The basis of this article evolved over several weeks. I was going to conclude with a little bit of introspection. Any reader of my blog knows that I won’t stop buying Grimm’s for a good bit, but it definitely has soured me a bit on the brand. I don’t like being treated as a point on a graph, a statistic to be herded where I am most profitable. A lot of Grimm’s buyers in the US fit a particular demographic: a mindful consumer who doesn’t just like to go with what the advertising tells them to do. These types of buyers don’t take well to heavy bureaucratic decisions. I was going to finish by saying something snarky, about how perhaps they would be an example of how not to go about these types of business decisions.
And then in the bottom of a thread of comments, buried in an obscure post on a Facebook message board, I saw a little comment from an overseas retailer about the new upcoming limited edition Grapat sets: “Grapat wants us all to remain fair to all the local stockists because the release might be delayed outside Europe a little bit, so we are only allowed to sell within our own region”.
Behold the domino effect. We are silly to think geo-fencing is limited to Grimm’s. The heyday of buying wooden toys from the big makers across Europe is at an end. We are soon to be limited to our own borders for wooden toys, and I don’t see the consumer coming out a winner here. Why shouldn’t everyone else jump on the bandwagon?
Cut the lights, Chris – Cue up R.E.M.’s “It’s the End of the World”
Came across this “blog” via a friend. Since you name anonymous sources, I will stay the same. Only as much to say that I am an online retailer of wooden toys and other children and family goods.
I have come across your posts about this topic in the FB group (The Wooden Toy Society) and was actually quite intrigued to see if there had actually been some research into this topic and the overall economics Grimm’s and other manufacturers are taking into account while making this decision.
I have read it now 5 times.
Well. I am sorry. I am confused. What is your point???
Are you just angry that you are not able to purchase goods wherever you want? Or are you upset because a company is telling you where you can purchase and where not?
Unfortunately your blog already starts with the most incorrect premise you could have come up with… “Grimm’s Wooden Toys & Geo-Fencing: Building a Wall to Keep Americans Out”.
It is definitely not to keep Americans out! It is to keep foreign retailers out of the US market!
Let me invite you into the “secret world” of a retailer…
We purchase goods at a price which is set by the manufacturer or the wholesaler. If we can purchase in the US we do. We pay for freight. We pay for warehouses, store-fronts, employees, packing materials, shipping, marketing, websites, ad-words, instagram “influencers” and so on, and so on.
We mark up the goods by a pretty standard margin. We are told what we are allowed to sell the product at. Many items are bound by MAP (minimum advertised price). We are not allowed to discount at will.
The margin we make is enough to pay the bills and put food on the table. Thank god I have a husband who has a well-paid job so that we don’t have to live off of my online sales. I know plenty of owners that do not have that luxury.
We work tirelessly, from the moment we wake to the moment we fall into bed late late at night. We are worried about the current global crisis situation. Sure, business is OK. But that’s now. What about Q4? Will there still be a quarantine? Will there still be money to be spent? What will happen to my store then?
Plenty of things to worry about right?
Nope. We also have to worry about online stores outside of our borders.
Sure in today’s connected world anything is only a click away. Amazon has bred a civilization that demands everything always be in stock and be shipped to us by the next day for free.
We have to worry about currency exchange rates and ridiculous postal shipping rates out of Canada and the UK.
All this and we haven’t even sold a single rainbow yet.
And that brings us back to the item that is so passionately being discussed these days.
Because of favorable exchange rates and cheap postal shipping rates from several countries, the sale of European toys and other goods has become quite lucrative for online retailers abroad. They can grow “their” markets organically without having to spend or setup in foreign markets.
And this leads immediately to the problem.
Grimms (and all the other manufacturers) have a limit to what they can produce. Their capacity is not endless. The regions that sell the most, receive the most. At least that was the way it worked. Companies often look at growth markets and support them. Nothing new. With the help of a decent exchange rate Canada (for example) was able to offer lower prices that the US retailers. That coupled with other incentives led to an explosion in sales in Canada. More was needed, more was shipped and the result was the US got the short end of the stick.
I was one to bring this up already with Grimm’s directly in 2018 at the Nuernberg Toy Fair. This has been an issue for a very long time. None of us were and are happy that we cannot get enough stock or the items we really want.
So it was determined that something needed to change.
A country like Canada does not need twice the stock that the US should be getting. US retailers should have access to that stock and sell that stock to US customers. All very straight forward. Noting malicious about it. Just because its toys should be a justification to have a free-for-all.
If US retailers have stock, US consumers will be happy. It’s faster, it’s ultimately cheaper and above all you are supporting US businesses. and families. Even the most progressive thinking person can get on board with that I am sure.
I read a lot about shop small, shop local, support local businesses. Well, this will give everyone a chance to do so.
Babipur is most definitely NOT a small local shop. Unless you think Macy’s or JCpenny (RIP) are small local shops.
The point is, regulations can be annoying sure, but they are made for a reason. In this case many factors were taken advantage of (and still are!) and it lets to a total destabilization of a brand. This will help. And I can only hope that other brands will follow suit.
I stock these goods, I stock Grimm’s. I always get what I ask for and I always stock much more than just the rainbow and LSP. I don’t discount. I don’t offer points. I am a business. I have to pay bills.
I love the brands I sell. I love my customers. I have provided a service to families for over 12 years.
Maybe this will help you see this issue from a different perspective.
Perhaps next time you decide to write a piece such as this, you take just a bit more time and ask experts within the industry? Might make your piece come out with a different message…
Thank you.
Hi Friend,
Thanks for taking the time to send in some feedback!
I originally considered an article that examined the business aspect of the Grimm’s decision. In fact, during the exploratory period of this article, that is all it was going to be about. However, I couldn’t get anyone to talk to me about it. Emails to both headquarters and several retailers went ignored. I only stumbled upon my source through a friend of a friend.
I am, however, a passionate advocate for the consumer. You mention several valid points about the associated costs of running an online shop (cost of goods, shipping, advertising, etc.). I also understand that exchange rate fluctuations can affect competitiveness of different market players. However, I don’t see how attempting to control the end consumer’s purchase decisions benefits the industry overall. At the end of the day, a free market will point out glaring inefficiencies in trade and the participants must adapt their behavior.
If consumers are able to purchase identical products at a lower cost from an overseas vendor, something is wrong. These purchases should be more expensive due to additional shipping costs and potential customs duties. The fact that that wasn’t the case points to one logical conclusion: overseas retailers were/are receiving a lower overall price for their inventory. And therein lies the actual problem, not the purchasing habits of consumers.
Of course, I do not know if this is the case. I am not privy to the wholesale prices available to retailers across different regions. However, it is likely the most probable cause from an economic perspective and should be the issue to be addressed.
Also, I do worry that you think I am anti-Grimm’s. I love Grimm’s. I have previous posts that demonstrate how much and just wanted to set the record straight. 🙂
Always appreciative of a reader,
Rachel D.
Hello Rachel.
I refer to the last part of your reply. “Of course, I do not know if this is the case. I am not privy to the wholesale prices available to retailers across different regions”.
This is why your article is flawed. You are selling assumptions based on your options and emotions. Your writing lacks many of the facts around the geo-fencing decision and you are looking at it purely from your point of view and fail to even try to put yourself in the position of the manufacturer and the US retailer.
The fact is that prices are OF COURSE kept in a manner that they are more or less the same for every market. It is a very complicated process, not always perfect and sometimes even messy.
What is making the Grimm’s product cheaper to purchase in Canada is the exchange rate. This was not the case 8 – 10 years ago and has really only begun to be a large difference in the last 3 – 4 years. Canadian retailers of course are aware of this. The same is true for the UK. And you as a consumer do not pay customs duties (albeit they should be filed in ones tax return…).
So add free shipping on that and of course the competition is more than skewed.
When you say, that it’s purely pricing and not shopping habits, I absolutely disagree. This new generation of wooden toy “enthusiasts” is always only looking where to get things for a bargain and a discount rather than supporting local small businesses. Add to that the obscene amount of splits, “purges” (whatever THAT is!) and resales on Facebook, Mercari, Ebay and many more.
But enough of that and back to the wall that Grimm’s is apparently building to keep you out.
Make no mistake about it, these decisions are being made to YOUR benefit. You will be able to purchase at US retailers, the long-standing gripe that US stores “never have inventory” (which is also untrue – may I ask how many of the over 100 Grimm’s retailers do you know and are you aware of what they stock?) will no longer be valid.
I simply can not believe that life without foreign retailers will be that large of a burden on your personal right to choose where to shop. The argument that this is about the right to choose where to spend your money is a thin one at best. I believe the truth lies with far more weight on the choice where to spend less.
Let me leave you with one question: Do you purchase many non-toy items abroad? Do you go out of your way to purchase large appliances in Canada? What about groceries? How about clothes?
Amazon does not count.
My guess is probably not.
So why wooden toys? IF you are such a fan and truly love them, why not support your local store?
(I ask this of ALL of the people who absolutely MUST purchase in Canada or in the UK).
These toys once were cherished by few and those that knew what they were and what went into making them. Then the discussions around wood grain came. The retailers educated, now it can’t be grained enough.
To be clear, I am more than happy that the audience for what was once a very niche product has grown. It has grown my business and has afforded me a life that I enjoy and cherish.
However, rather than seemingly going against the “giant” (which by the way Grimm’s is not – they are a small family business)and chasing windmills like Don Quixote, perhaps educating oneself and especially others about wood toys, their uniqueness, their intent and meanings and that sometimes having less means having so much more would be a better use of time and resources.
Respectfully.
Hi reader,
Thanks for taking the time to respond to my article. I’m having trouble discerning if you are my original commenter or a new friend. Similar writing style, but it’s in a new comment train. I’m sure you’ll let me know.
Both comments mention exchange rates as one of the culprits, so I’ll tackle that for a bit. Obviously, I don’t know what goes on in the Grimm’s board rooms, but I do have access to historical fx rates. Let’s explore some data then, shall we? In this case, the only exchange rate that matters is EUR/USD.
Here’s a hypothetical. Let’s say Grimm’s has a toy that costs 5 euros to make. They sell it wholesale at 10 euros. When they sell it to a US distributor, it should cost USD$10.90 at the current exchange rate of ~$1.09 EUR/USD tonight (10:55pm Eastern on 5-19-2020). When they sell it to a Canadian distributor, it should cost CAD$15.20. Regardless of which country they sell to, it should be the same price, all things being equal.
Do shipping costs, customs, etc. play a role in pricing? Of course they do. Why is this important? Well because the average price difference I’ve seen between Canadian and US retailers is about 15%. That’s 15% higher in the United States. How can a product that is first shipped to Canada and taxed at import, then reshipped to a US customer (theoretically getting taxed again) cost less than a product that was directly shipped and imported into the US? The cost of doing business (and many other things) in Canada is on average higher than the US. The only conclusion would be that Canadian distributors are able to buy at a lower price than their counterparts in the US. In this case, a rational consumer would purchase from a Canadian store vs. a US-based one.
The point of my article was simply observation. Only in these comments are we delving into the merits of manufacturer’s strategies. In doing so, I am pointing out that never in the history of trade have attempts at controlling consumer behavior been ultimately successful. Businesses depend on their customers, not the other way around. At the end of the day, a business must realign their strategy to the habits of consumers or face extinction. Tactics such as geofencing only serve to delay the inevitable. It may seem great now, but eventually it will fall apart when a new competitor arrives that gives the customer what they want.
I make a point to be a voice for the consumer, using what I have gleaned from a very opaque industry. While I stay at home with my daughter now, I spent over a decade in finance and accounting. Suffice to say, you say it’s not something I should devote time to…I say, it’s my job.
You’ve really given me a lot to think about – I think I see inspiration for my next article 😉
Yeah, I know I’m late to this conversation, but here are my two cents…
Stores can refuse service to customers, and those customers can and will choose a new retailer to purchase from. It’s that simple. You have rights and so do we. It seems you are oblivious to the fact that the consumer can choose not to buy from a company solely based on WHAT EVER REASON. Just because you have a supply of my demand doesn’t necessarily mean I will purchase from you. Maybe YOU are not supported as much as you like to be based on YOUR actions. Really commenting what you did was unnecessary. It sounded more of a rant and attack of how it’s unfair that we buy from someone other than YOU!. Rachel did state the facts that are happening to the consumer. What she wrote about, I am going through. Your dismissal of our side would cause more people like me to not purchase from you even if you did have a better price and faster shipping. I shop local to support those people around me. I pay more for the item sometimes wait on delayed shipping, but if I do not like their ethical background I can and will choose not to shop there. Like how you came on here wrote what you wanted to hide behind your screen. If you disclosed who you are or what business you own. I would not purchase from you or your business. Maybe think about how high the demand is and how your supply stays on the shelf. Well, I’m no expert but, from my POV YOU must be doing something wrong! 🙃 Either you are not doing a good enough job to market your items to sell or you hired the wrong person to manage it for you. There are more than one side to a story. If you had articulated your POV without those unkind words you said I would have supported you.
Again, unfortunately, your arguments lack fact and knowledge of the pricing process. Prices vary from country to country. It is not as easy to simply take a set price in Euros and convert it into Dollars (Canadian or US). But none of that is really your concern.
You claim to be and advocate for the consumer, but in fact you are only trying with all means necessary to justify what you write which is nothing more than airing grievances about where you and a few of your Facebook friends can shop. I know it won’t be at my shop, and for that I am grateful.
I will not waste any more of my time trying to convince someone who just feels the need be on a soap box yelling at and “enemy” that isn’t one.
I feel like we’ve made real progress here!
“Prices vary from country to country.”
Yes, it’s called market segmentation and is quite common. In this case, however, prices varied by country/segment so much that demand gravitated to other markets. It’s precisely what a rational consumer is expected to do. The issue here is how the supply side of the equation reacted. Instead of adjusting price strategy to match what the market was practically screaming about, they moved toward artificial price controls. This strategy never works in the long run because ultimately, consumer behavior cannot be manipulated by force. Demand either wanes, circumvents, or is fulfilled by new competitors. If I were a retailer, I’d be pissed. The supplier did not do what was in everyone’s best interest. They are hurting the retailers and their customer base. I think we all know where that leads.
Of course, none of this is my concern. My contribution to these companies’ balance sheet is inconsequential. It’s not like there’s thousands of others like me that may decide to look elsewhere.
I wish you the best, honestly. This has been an incredibly stimulating discourse and I hope to be proven wrong.
Wow. You’re right about one thing: you really are a consumer, spoiled by your Amazon loving country and can’t realize what’s good for them. Yes, keep ordering from obscure shops abroad to brag to your groups and keep hacking your way around so much that more companies like Grimm’s follow suit. Are American consumers so entitled that they feel all markets should serve them? Do you know how ridiculously more you pay, not just in money, by ordering overseas? You’re not buying because you love Grimm’s and its ethos. You are buying because you’ve been conditioned to do that and you think you are entitled to everything, using your kids as an excuse to gather and hoard the best of the best.
I see you with a Gwawr rainbow that Babipur didn’t sell you, and yet you believe you have a special golden thread connection with that giant of a retailer. Please humble yourself. Take some time to read what the commenter above said and really understand it instead of trying to think of cute retorts that show your lack of experience in actual retail.
And are you sure that most US Grimm’s buyers are truly mindful and not reliant on big advertising? I know you’re not naive and you know that Instagram and influencer culture is advertising. Use your energy and passion to reflect on that.
I would be so thrilled to know who the sellers in this comment thread because I would never want to support such a bitter pair of people – wherever they might live.
YES. I, too, would like to know. What a condescending and rude individual that shop owner is. I see below that people believe it is the owner of The Wooden Wagon. That is insanely disappointing. As an aside, she asked if the blog writer knew the hundred shops that carry Grimm’s and their inventory. I don’t know about the Blog writer, but I am exceptionally well versed and these shops, by and large, cannot keep Grimm’s in stock. Shame on a larger, successful retailer for pretending the sweet mom and pop shops I also regularly frequent benefit from this when they clearly knew they would be the primary beneficiary.
Bitter? If anyone, it’s the writer of this blog that seems to be terribly bitter about things. I feel the first comments were to explain what is going on and tried to correct what sound like falsehoods.
I was a member of a Facebook group in which the author is a moderator and it seems to be a lot of ganging up on one, perhaps two companies about a bunch of stuff. Felt very high-school mean girls club. Bad vibes in that group that look like they are spilling over into this blog. I left the group because it felt really toxic.
***comment edited for hogwash***
next time don’t forget to turn on your ExpressVPN 😉
Man, guess I’m gonna have to check before every purchase to see if the company originated 12ish years ago because there’s no way I’m shopping there. “I don’t offer points , I don’t offer discounts, but I love my customers”. LOL. Hey FYI, if there’s a discount I usually buy more stuff!!! Honestly, as a consumer I don’t care you’re running a business, just like you don’t care I’m trying to buy things at more affordable prices. I’m looking for the best price for an already expensive toy. I support small businesses all the time, but you sound like such a cry baby. Running to Grimms complaining.. If you can’t move the product, then don’t sell them ?? Find other products. Don’t screw over the consumers because you can’t sell rainbows. We can’t even get older stuff anymore.. And now other companies are doing the same. And stuff will eventually be even harder to find. So better in the long run? For who? You right?
I’m a little late to the party but thank you for your informative post, as before this I wasn’t fully aware of how geo fencing worked.
I was reading through the replies and notice you say “never in the history of trade have attempts at controlling consumer behavior been ultimately successful”. Now the thing is, it does work, and it is something I as a British person have always had to endure. I’ll give you an example. Before becoming a mother makeup was my forte, and the whole cosmetics industry sounds very similar to what you are describing. Americans have access to all of the brands and discounts, sales and offers (for example at Ulta and Sephora) at prices we can only dream of. We are not allowed to buy from many retailers or ship numerous specific brands internationally, so we are forced to buy here at inflated prices. The biggest joke is that there are some British brands available in the US retailing CHEAPER over there than back in the UK. I actually saved money buying and shipping a Real Techniques (owned by UK make-up artists) brush set from America than buying from here. It’s actually gross and we are ripped off left right and centre. It’s even worse if you are Australian. But the brands know we will pay so they get away with it.
So, although this situation is not great for American consumers wanting to buy European-made wooden toys, in general you are in a very good position for practically anything else you desire from a consumer point of view!
I, too, would like to know who this store owner is in your comments. I would not like to ever purchase from their store even if it means I can’t buy Grimms products. Holy moly!
Anyway… Thanks for clearing this up about Grimms. I am very new to the wooden toy craze here in quarantine and have been desperately searching for blocks to no avail. I generally trust European toy sites over US ones anyway, much to the previous commenters chagrin.
I believe the comments left by the retailer stated 2008 as the time they founded so they could purposely throw people off their trail. The Wooden Wagon was founded in 2003 while their competitor The Natural Baby Company was founded in 2008. A lot of us looked into this and came to the conclusion that it was indeed The Wooden Wagon who spurred on this geofencing. It is natural then, that it is the Wooden Wagon who would take such offense to such an article and come here to leave these unkind comments. All the while lying about starting up in 2008, a subtle way it seems, to throw The Natural Baby Company under the bus, who did in fact start up that year. It’s no wonder many of us choose to never shop from The Wooden Wagon. Looking into Christian Blunck provided a lot of answers.
I’m from Eu but British shops won’t deliver Grimms here anymore either. I don’t care much as I have been using a package forwarding service for years already anyway. Clothes, shoes, accessories, books, toys, sometimes even non perishable groceries. Why? It’s either cheaper to buy certain things I want or when I have a set amount to spend it buys more. Hell sometimes even if it costs the same I get to pick from more instead of the usual 3-4 shops people dress from over here. I even buy second hand abroad lol! Honestly I might be infuriating to some but money talks. It goes to wherever I can get the most and best for it. I save a couple euros only? I still saved. If I go to ANY shop no one will pity me even if I’m only short of 20 cents. Why should I take pity on these shops then? Instead of trying to force shoppers, the retailer should work on not selling the very same product for more than price abroad + all the hassle and cost of international delivery. I don’t care how. If a shop wants my money, then work for it instead of trying to prevent me from shopping abroad like we still lived in the past. There is a work around anyway with the forwarding. Actually it makes it cheaper to have packages sent locally to free they then combine them and forward. I get up to 66lbs stuff for the same price as the shop itself would send a rainbow and the semi circles to my home directly.
Very good job writing them in this blog post
King regards,
Harrell Griffin
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