Nike withdraws its products and ends the pilot program with Amazon.

The athletic brand will stop selling its shoes and clothing directly on the Amazon website, ending a pilot program that began in 2017.

Nike withdraws its products and ends the pilot program with Amazon.
Nike withdraws its products and ends the pilot program with Amazon.

The break occurs amid a massive revision of Nike's retail strategy. He also continues to hire former EBay Inc. executive director John Donahoe as his next executive director, a move that says the company will focus even more aggressively on e-commerce sales, apparently without Amazon's help.

"As part of Nike's focus on raising the consumer experience through more direct and personal relationships, we have decided to end our current pilot with Amazon Retail," the company said in a statement. "We will continue to invest in strong and distinctive partnerships for Nike with other retailers and platforms to serve our consumers globally."

Some big brands reject the Amazon platform, where fakes and unauthorized sellers flourish that lower prices, a mixture that decreases the value of the requested brands. The collapse of the Nike agreement threatens to reinforce the concern of retailers. Under the pilot program, Nike acted as an Amazon wholesaler, rather than allowing outside merchants to promote their products on the site.

Amazon operates an online market, essentially a digital mall where merchants can sell products. More than half of all products sold on Amazon come from independent merchants who pay the Seattle-based company a commission for each sale. Amazon also operates like a traditional retailer, buys products from wholesalers, and sells them to customers.

Nike said it would continue to use Amazon's cloud computing unit, Amazon Web Services, to boost its applications and services.

Through a spokeswoman, Amazon declined to comment. The company has been preparing for the measure, according to two people familiar with the matter. They have been recruiting third-party vendors with Nike products so that the merchandise is still widely available on the site, they said. Amazon has also been working to stop the flow of fakes on the website through several initiatives, including a project that allows brands to put unique codes on their products to make it easier to identify scams.

'Huge reach.'

The question now is whether other Amazon partners will follow Nike's example. Few other brands have the type of muscle Nike has, so it can be harder for them to leave.

"Nike has a huge reach, and its products are in demand, so you can afford to be selective about where your products are distributed because customers will find Nike where they are offered," said Neil Saunders, an analyst at GlobalData Retail. "I don't think so many brands can be as selective as Nike."

For years, the only Nike products sold on Amazon were gray market items, and fakes, sold by others. Nike had little control over how they were listed, what product information was available, and if the products were even real.

That changed in 2017 when Nike joined Amazon's trademark registration program. The executives hoped that the measure would give them more control over Nike products sold on the e-commerce site, more data about their customers, and more power to eliminate fake Nike lists. The news of Amazon's bonding, which Nike executives called a "little pilot," caused the actions of shoe retailers to fall and left many wondering if other large Amazon groups would follow quickly.

But Nike reportedly worked hard to control the Amazon market. Third-party vendors whose listings were removed appeared under a different name.

Leaving Amazon will not necessarily solve the problems of Nike.


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