Nike Thought It Didn’t Need Amazon—Then the Ground Shifted
For years, Nike Inc. NKE +0.89% was one of the biggest holdouts against Amazon.com Inc., AMZN +1.25% refusing to provide its sneakers and athletic clothing for sale on the hulking e-commerce site. Its products were so cool, the company reasoned, it didn’t need or want the help.
Recently, Nike reversed course. Behind that decision lies a dramatic shift in the balance of power between brands and Amazon.
For decades, big consumer brands carefully controlled which retailers could sell their wares and at what prices. And for years, Amazon left the brands alone.
Lately, the explosion of third-party sellers on the site has led to authentic goods from companies such as Nike, Chanel, The North Face, Patagonia and Urban Decay being sold on Amazon even though they don’t authorize the sales, undercutting their grip on pricing and distribution.
Even though Nike didn’t send Amazon its products either directly or through approved wholesalers, Nike is the most purchased apparel brand on the site, according to a Morgan Stanley survey. A recent search for Nike products on Amazon turned up roughly 73,000 items.
These days, there are so many third-party resellers, who generally are allowed to resell goods they have lawfully acquired at whatever price they want, that companies see few ways to stop them.
wsj.com
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