Nike will stop selling merchandise directly on Amazon, as part of a direct-to-consumer sale.
The abrupt termination will put an end to the partnership that began between Nike and Amazon in 2017. At that time, Nike agreed to sell a limited range of products on Amazon, in exchange for stricter policing of the “product monkeys” and the sales restrictions of its products. This included Nike's athletic shoes, apparel and accessories.
Before 2017, Nike had resisted such an agreement with Amazon, focusing its attention on its own online marketplace and stores. Nike's fear, as with many other brands, was always that, by partnering with Amazon, a company loses control over how its brand is represented on the website.
Nike will continue to use Amazon Web Services to run its website as well as mobile apps.
Nike brings in about 30% of its annual sales from its direct-to-consumer operations. In the fiscal year ended May 31, 2019, Nike's direct-to-consumer sales totaled $11.8 billion, fueled by a 35% jump in online sales.
Wholesale customer sales increased by 10% over the same period. Everyone said that Nike had 39.1 billion dollars in tax revenue for the year 2019. Some of the largest wholesalers include Foot Locker, Dick’s Sporting Goods and Nordstrom. Although it continues to invest in these relationships, it also invests heavily in building Nike stores and upgrading its apps and website.
Meanwhile, Amazon has been trying to become the biggest name in fashion for years. It has launched its own clothing brands and is constantly trying to outsell name-brands like Calvin Klein and Chico's.
