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Nike Pulls Its Products From Amazon in E-Commerce Pivot
Posted
November 14, 2019
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1,113
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November 14, 2019
1,113
16
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2.07%
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1:01Now PlayingNike Inc. is breaking up with Amazon.com Inc.
The athletic brand will stop selling its sneakers and apparel directly on Amazon’s website, ending a pilot program that began in 2017.
The split comes amid a massive overhaul of Nike’s retail strategy. It also follows the hiring of ex-EBay Inc. Chief Executive Officer John Donahoe as its next CEO -- a move that signaled the company is going even more aggressively after e-commerce sales, apparently without Amazon’s help.
“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. “We will continue to invest in strong, distinctive partnerships for Nike with other retailers and platforms to seamlessly serve our consumers globally.”
Some big brands shun Amazon’s platform, where fakes flourish and unauthorized sellers undercut prices -- a recipe that diminishes the value of sought-after labels. The unraveling of the Nike arrangement threatens to reinforce retailers’ unease. Under the pilot program, Nike acted as a wholesaler to Amazon, rather than just letting third-party merchants hawk its products on the site.
Amazon operates an online marketplace, essentially a digital mall where merchants can sell products. More than half of all goods sold on Amazon come from independent merchants who pay the Seattle-based company a commission on each sale. Amazon also operates as a traditional retailer, buying goods from wholesalers and selling them to customers.
Nike said it will continue to use Amazon’s cloud-computing unit, Amazon Web Services, to power its apps and Nike.com services.
Amazon, through a spokeswoman, declined to comment. The company has been preparing for the move, according to two people familiar with the matter. It has been recruiting third-party sellers with Nike products so that the merchandise is still widely available on the site, they said. Amazon has also been working to stem the flow of counterfeits on the site through various initiatives, including one project that lets brands put unique codes on their products to make it easier to identify fakes.
Nike shares rose as much as 1.4% in New York trading Wednesday, while Amazon was off as much as 0.6%.
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