Nike is world’s largest maker of sportswear and Amazon Inc. has proven itself to be the largest e-commerce platform in the world. They have not collaborated in the past but things are changing now. Nike has announced that it would begin selling some products on Amazon next month.
Although this would largely boost up Nike’s sales, it is not the main target of the company. Nike’s goal is to deal with third-party sellers on Amazon selling Nike’s products. Even though it does not sell directly on Amazon, Nike is the number 1 clothing brand on the e-commerce website. The products are sold through unauthorized third party retailers. Amazon takes a fee for facilitating the sale all the same. Retailers have started cottage industries, buying large stockpiles of Nike products and unloading them on Amazon.
One of the retailers describes this to be his primary source of income. He acknowledges Nike to be the top brand in clothing and Amazon to be the best platform. He calls it an opportunity if there is no deal between the two companies.
A part of the deal between Amazon and Nike would be to closely monitor the website and not allow the third-party retailers to sell Nike merchandise. Nike is starting out small with Amazon, offering only a limited amount of their products.
With the flow of reselling cut from Amazon, customers looking to buy Nike products online would be forced to buy from Nike’s own website or from retailers like Foot Locker. This move boldly helps Nike to maintain its grip on the products that it liquidates into the market. Nike would also control how its product appears on Amazon, a platform with a very large exposure and usually the first website customers open when they wish to shop for anything.
Amazon has made its presence known throughout the world and Nike means to tighten its grip on the way the brand is viewed worldwide. Nike’s deal with Amazon would focus on direct-to-consumer approach, moving away from the traditional wholesale business model.