Nike to Stop Selling Its Products on Amazon in E-Commerce Pivot


(Bloomberg) -- Nike Inc. is breaking up with 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 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 were down less than 0.1% in U.S. premarket trading Wednesday, while Amazon was off 0.4%.

'Enormous Reach'

The question now is whether other Amazon partners follow Nike's lead. Few other brands possess the kind of muscle Nike has, so it may be harder for them to leave.

"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," said Neil Saunders, an analyst at GlobalData Retail. "I don't think as many brands can be as selective as Nike."

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

That changed in 2017, when Nike joined Amazon's brand registry program. Executives hoped the move would give them more control over Nike goods sold on the e-commerce site, more data on their customers and added power to remove fake Nike listings. The news of the Amazon tie-up, which Nike executives called a "small pilot," sent shoe-retailer stocks tumbling and left many wondering if other major Amazon holdouts would quickly follow.

But Nike reportedly struggled to control the Amazon marketplace. Third-party sellers whose listings were removed simply popped up under a different name. Plus, the official Nike products had fewer reviews, and therefore received worse positioning on the site.

Leaving Amazon won't necessarily solve Nike's problems, which represent a big brand struggling to adapt to selling products in the digital age, said James Thomson, a former Amazon employee who now helps brands sell products online through Buy Box Experts.

"Just because Nike walks away from Amazon doesn't mean its products walk away from Amazon and doesn't mean its brand problems disappear," Thomson said. "Even if every single Nike product isn't on Amazon, there will be enough of a selection that someone looking for Nike on Amazon will find something to buy."

Fewer Partners

Shortly after its Amazon pilot began, Nike unveiled plans to overhaul its retail strategy. With more attention aimed at direct-to-consumer avenues, particularly the Nike app and, executives said the company would drastically reduce the number of retailers it partnered with.

In 2017, Nike did business with 30,000 retailers around the world. Elliott Hill, currently the company's head of consumer and marketplace operations, told investors that year that Nike would focus its future efforts primarily on about 40 partners.

Nike wasn't specific on what would separate those 40 partners from what it called "undifferentiated retail." Reading between the lines, it appeared to want partners that gave its Nike brand separate space -- such as Nordstrom Inc.'s "Nordstrom x Nike" shop on its website -- and was less interested in retailers that just placed Nike alongside its smaller competitors.

The Wall Street Journal reported at the time that Amazon was one of those 40 that Nike intended to prioritize.

About 68% of Nike's annual sales come from wholesale channels, down from 81% in 2013. Though wholesale is still the bulk of the company's sales, in that span Nike's direct business has grown three times faster than top-line revenue.

Nike's departure will rob Amazon's brand registry program of a big name -- and potentially stoke the concerns of its partners. Nike's participation had signaled that Amazon was taking the concerns of major brands seriously.

Such brands have expressed frustration that Amazon doesn't do enough to fight counterfeits. They also fear that giving Amazon too much control over prices will devalue their products.

Amazon's foray into private-label products has added to the fears. The company now sells everything from batteries to mattresses to snacks, further complicating the relationship between Amazon and brands.

--With assistance from Robert Williams.

To contact the reporters on this story: Eben Novy-Williams in New York at;Spencer Soper in Seattle at

To contact the editors responsible for this story: Nick Turner at, ;Jillian Ward at, John J. Edwards III, Andrew Pollack

For more articles like this, please visit us at

©2019 Bloomberg L.P.


More Related News

Gift Guide: Gifts for the commuters in your life
Gift Guide: Gifts for the commuters in your life

Need help with gift ideas? Spurred by ubiquitous broadband and mobile connectivity, lighter and smaller computers, and everything you need in the cloud, a lot of people have felt a lot less of a need to be in the same physical space as everyone else, day in day out, to get things done.

AMZN Stock Is Building a Base to Set New Highs
AMZN Stock Is Building a Base to Set New Highs

I have written about Amazon (NASDAQ:AMZN) stock many times before and I have been consistent with my message. Long term, AMZN stock will be higher. This management team under the leadership of Jeff Bezos has earned the benefit of the doubt. They have executed very well on their plans for over a decade. That's how they've come to dominate so many verticals including the cloud.Source: Hadrian / In the last five years, Amazon stock continues to clobber the averages and all of the top five tech mega-cap companies. It's up more than 472% while the S&P 500 is up only 52%. For reference, Apple (NASDAQ:AAPL), Alphabet (NASDAQ:GOOG, NASDAQ:GOOGL) and Facebook (NASDAQ:FB) are up...

Amazon just released
Amazon just released 'The Expanse' season four a few hours early

If you were planning to dive into season four of The Expanse later tonight, then you may need to adjust your plans -- it's available on Amazon Prime Video right now. Following the early release of Jack Ryan in October, Amazon has posted up its first original season of the show it saved from cancellation. Unlike the Syfy broadcast, this one is a bingeable full season drop so you can jump through all ten episodes right away. This release is coming so early that a pre-release marathon of the three previous seasons is still ongoing over at Twitch. Apparently the early drop is becoming Amazon's move -- we'll see if Netflix ever recreates its surprise primetime Orange is the New Black season...

'The Marvelous Mrs. Maisel' Renewed for Season 4 at Amazon in Wake of 'Most Watched Opening Weekend Ever'

Amazon is demanding another encore from The Marvelous Mrs. Maisel: The streamer has renewed its crown jewel comedy for a fourth season. The pickup comes less than a week after the launch of Mrs. Maisel's eight-episode third season, and just days after the series scored multiple Golden Globe and Screen Actors Guild nominations. An episode […]

Brazil paves highway to soy, sparking worries about Amazon
Brazil paves highway to soy, sparking worries about Amazon
  • World
  • 2019-12-12 15:04:30Z

Night falls in Brazil's Amazon and two logging trucks without license plates emerge from the jungle. "There was a dream of colonization, of getting land and seeing if here we could have better financial conditions," Dedé Diniz, 69, said in his home.

Leave a Comment

Your email address will not be published. Required fields are marked with *

Cancel reply


Top News: Economy