Amazon sells pretty much everything under the sun. From hot sauces to nutritional supplements to watches. Amazon is even ready to provide a grocery delivery service after purchasing Whole Foods for $13.7 billion. Amazon offers Adidas and Under Armour, but Nike has not been offered on Amazon, but that is about to change.
In the past, Nike has only sold their shoes and sportswear on their website and to department stores and specialty retailers. They have declined to sell their products Amazon all this time, but they are not able to resist the huge potential for sales that the online behemoth offers. A Goldman Sachs report that was released on Wednesday stated that Nike is “close to commencing a direct relationship selling product on Amazon.com.”
The agreement will have Nike provide product directly to Amazon and in return Amazon will police and prohibit counterfeit and third-party sales of Nike products. Amazon has been gearing up for this significant partnership by cracking down on counterfeit product and the proliferation of unauthorized third-party sales on the site already. Amazon already began notifying third-party sellers that they have until July 13 to stop selling certain Nike products.
What’s not known is what Nike products will be available on Amazon. Zappos, which is owned by Amazon, doesn’t sell premium Nike brands such Jordan, Air Max or Nike signature basketball products. Experts believe that premium Nike products will not be offered on Amazon, to give other retailers that Nike has a relationship to survive. Sports apparel retailers such as Dicks Sporting Goods, Footlocker, Finish Line, Hibbett Sports all saw their stocks drop on Thursday.
Nike is enchanted by Amazon more than ever since sales in North America have been stagnate, and this month they were forced to cut 1,400 jobs, or about 2 percent of its workforce. Plus traffic to brick-and-morter retail locations are on declining at a worrying pace.
Nearly three-quarters of Nike’s sales, or $22.6 billion, came from wholesale partnerships for the year ending in May of 2016. On Tuesday, Amazon launched Prime Wardrobe, a service that allows customers to try on apparel at home before deciding on a purchase.