Nike’s partnership with Amazon will eliminate third-party resellers
Sneakerheads rejoice! You can potentially avoid paying exorbitant prices to third-party resellers for those sneakers that you have been coveting for.
Nike will be selling some of their products on Amazon in July, and their focus is to work closely with Amazon to crack down unauthorised third-party sellers as well as to tighten control over Nike’s branding and product marketing on Amazon.
Proliferation Of Third Party Sellers On Amazon
Although Nike currently does not sell directly on Amazon, it is the number 1 clothing brand on Amazon.
The Nike products that are sold on Amazon now are from third party resellers who are unauthorised and Amazon profits by facilitating sales.
This leaves Nike the only party that does not have a slice of the cake.
However, this will no longer be the case.
Amazon will monitor its website and third-party resellers will no longer be allowed to sell Nike merchandise.
This would essentially force third party resellers to turn to other platforms to sell their products instead of the world’s largest e-commerce platform.
However, if Amazon does not have what you’re looking for on its website, other alternatives include Nike’s own website or even other retailers such as Foot Locker and even Carousell for Singapore consumers.
Predicted Increase In Revenue
“Nike’s revenue could increase by $300 million to $500 million in the United States, or 1 percent in global sales, if the pilot turns into a more meaningful partnership”, Goldman Sachs analyst Lindsay Drucker Mann said in a client note.
This direct-to-customer sales model would essentially lead to increased sales for Nike via Amazon if the partnership is successful.
Nike’s Goals For Product And Image Branding
This move would help Nike better control its product branding on Amazon, which has a large exposure to potential customers.
“We’re looking for ways to improve the Nike consumer experience on Amazon by elevating the way the brand is presented and increasing the quality of product storytelling,” Nike Chief Executive Mark Parker
Nike has also revamped its stores and increase its online efforts with the Chinese e-commerce giant Alibaba Group’s Tmall in order to increase demand and sales in the world’s second-largest market.
The move to Amazon is also in line with Nike’s macro plan to have tighter control over its branding and image as well as its focus on more direct-to-consumer sales model rather than wholesale.
Sneakerheads, are you ready?
