Nike Just Did It
That's right, earlier this week the athletic brand announced they would no longer be selling their products directly on Amazon. The decision was made as part of the brand's retail strategy which prioritizes consumer experience. Apparently Nike didn't feel their direct relationship with Amazon provided the elevated personal experience they are looking for.
This all comes after hiring former EBay Chief Executive John Donahoe, signifying the company's aggressive intentions for eCommerce.
Protecting What's Important
Although a bold move, I applaud Nike for protecting their brand. With issues like counterfeit products and price battles it's easy to see how Amazon could devalue their brand. Fortunately for Nike, their reach is massive and they are able to be selective about where their products are sold. Unfortunately for small to medium sized brands Amazon isn't as easy to walk away from.
Brands Have Options
With the retail behemoth representing a significant portion of many brand's online sales, Amazon is a fixture of every day business. With that being said, brands do have options just like Nike. Although Nike is ending their relationship with Amazon's retail division, it's been reported they are recruiting third-party sellers with Nike products so that the merchandise is widely available on Amazon's site.
I'm finding this strategy to be more common, even among small to medium sized brands. Businesses want to control their brand value on the world's largest online marketplace but don't necessarily want to sell their products direct on the site. I see this often in industries with multi tiered distribution models or where channel conflict is a main concern. Brands with low price points also shy away from selling direct as net revenue is the same or less than wholesale after considering Amazon fees and account management expenses.
Although selling direct on Amazon doesn't make sense for many brands, the importance of preserving your brand does. This is why we have decided to heavily invest in our brand protection services. In the coming year we are excited to introduce unique products and services that will help brands regain control, even if they don't sell direct on Amazon.