Nike announced that it is parting ways with Amazon and will no longer sell its products on the eCommerce marketplace, ending a pilot program that began in 2017, The Wall Street Journal (WSJ) reported on Tuesday (Nov. 12).
The sneaker and sports apparel company said it is going forge new retail partnerships and concentrate on its direct business.
For many years, Nike opted out of an Amazon partnership due to concerns that it would weaken the brand. It was also upset about the many unauthorized sellers on Amazon, sources told the WSJ.
When Nike launched a pilot with the eCommerce giant, it insisted on stringent monitoring of counterfeits and unauthorized sellers.
“As part of Nike’s focus on elevating consumer experiences through more direct, personal relationships, we have made the decision to complete our current pilot with Amazon Retail,” the company said in a statement to Bloomberg. “We will continue to invest in strong, distinctive partnerships for Nike with other retailers and platforms to seamlessly serve our consumers globally.”
Amazon has said it forbids counterfeit merchandise, however, the number of third-party sellers accounted for 60 percent of sales in 2018, up from 30 percent 10 years ago.
Nike said it is planning to continue using Amazon’s cloud and web services. It has also been looking for third-party sellers so that Nike products can still be found on the site.
“Nike has enormous reach and its products are in demand, so it can afford to be selective about where its products are distributed because customers will come find Nike where it is offered,” GlobalData Retail analyst Neil Saunders told Bloomberg. “I don’t think as many brands can be as selective as Nike.”
In August, Amazon started labeling certain products “Top Brands” in an attempt to give big names the type of favorable positioning they get at physical retailers. Brands that are popular with customers get the label and there is no charge to the seller. Other labels that Amazon uses such as “best sellers” or “Amazon’s Choice” consider features like customer reviews and pricing.