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Amazon bans third-party sellers from selling Nike, stating it will handle direct sales officially.
Last June, when Nike announced that it would start selling directly on Amazon, not many people were surprised. On the one hand, several fashion brands had already made similar announcements, including Michael Kors, Kate Spade, and Rebecca Minkoff; on the other hand, although Nike had never previously opened a direct‑to‑consumer store, according to a survey by Morgan Stanley, Nike was the top-selling apparel brand on Amazon.
Amazon is rapidly emerging as the primary retail channel for fashion consumption among Americans, which is the most important reason why an increasing number of fashion brands are shifting from a passive to a proactive stance. According to data from market research firm Slice Intelligence, 40% of all online spending in the U.S. is concentrated on this platform. Meanwhile, another research firm, BloomReach, reports that more than half of product search queries also begin on Amazon. In 2017, the number of Amazon Prime members exceeded half of the U.S. population, and its logistics volume surpassed 5 billion items.
But Nike’s move isn’t entirely about expanding online sales. The sneaker company had already launched e‑commerce operations on its official website back in 1999. Vada Manager, a former executive who left the company in 2009 and was responsible for Nike’s online strategy, once explained to The Wall Street Journal that after a series of trials, Nike ultimately concluded that “the best strategy for online sales is direct selling rather than partnering with third parties,” because this approach allows it to offer differentiated products online, boost profits, and at the same time preserve its relationships with offline retail partners.
However, third-party sellers now active on Amazon are posing an increasingly significant threat to its retail channel control. Before Nike joined Amazon, you could already find at least 73,000 relevant products on the platform. In a consumer survey conducted last spring, Amazon and Foot Locker, a leading U.S. sneaker retailer, tied for first place as “the top destination Americans go to when buying sneakers.”
At the end of June last year, when Nike announced its partnership with Amazon, another piece of news broke at the same time: starting July 13, all third-party sellers were prohibited from selling Nike products on Amazon.
A review of Nike’s sales performance on Amazon over the past six months yields some intriguing insights. “Both modern brands and luxury brands are quite puzzled by this—how to strike a balance between third-party sales and direct sales, whether Amazon is truly a suitable platform for direct selling, and how best to integrate these two channel strategies,” Cooper Smith, an analyst at the fashion research firm L2, told U.S. media outlet Digiday.
L2 released a report on this, and the results may have been somewhat unexpected.
First, selling directly on Amazon does not mean that brand owners can quickly capture this channel.
When selling on a platform, brand owners invariably hope to control where their products appear and how they are presented, while also directly obtaining user feedback and other user data. However, according to L2’s research findings, enforcing such bans is actually quite difficult—in the months following Nike’s entry onto the platform, the best‑selling Nike products on Amazon were still sourced from third‑party sellers rather than from Nike’s own direct‑to‑consumer stores.
Deleted third-party products often reappear under new product numbers, appearing side by side with official products on the same page—yet consumers may still opt for the seller they’re already familiar with, or the one offering a lower discount.
“Nike is like playing whack-a-mole with third-party sellers on this platform,” said Cooper Smith.
Second, forcibly reducing sales by third-party sellers will not quickly lead to direct growth in flagship store sales.
Data from L2 shows that after Nike’s official products were moved to the top of the search results and third-party buyers decreased, Nike’s overall sales performance on Amazon declined by 15%, with sales from third-party sellers being particularly affected.
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