Things might be getting tougher for the biggest online retailer in the United States. It seems that many companies will no longer be selling their products on Amazon. Instead, they will simply be selling these items directly to their customers on their own websites. Nike was the first major company to announce such a move. Needless to say, this will badly hurt the company controlled by Jeff Bezos if the trend continues. The bad news for Amazon is that there is every indication that it is going to continue for the foreseeable future. A brand as large and powerful as Nike making the decision to leave Amazon is certain to influence many other large and small companies to do the same thing.
The logic behind the Nike decision is easy to understand. Driving people to their own site and selling people items from there will be more profitable for Nike in the long run. It also will help to enhance their brand. Selling their items on Amazon does more for the online retailer than it does for Nike in the long run. Amazon has not made a public statement about Nike’s decision. Needless to say, they are not pleased about it. There are financial experts who believe that the move by Nike will be the same as knocking down a string of dominoes. These experts firmly believe that it will not be long until there will be a mass exodus from Amazon by major companies.
Amazon has relied on selling major brands to help grow its business. It is unclear how Amazon’s finances will be impacted if huge companies refuse to sell their products on the site any longer. Amazon has many other streams of revenue at this point. However, people could start to avoid Amazon if they can no longer find all of the items they are looking for on the site.
Nike was already generating almost $12 billion on an annual basis by selling their products directly to customers. That number is expected to rise by a considerable number because of the company’s departure from Amazon. Nike said that they had been thinking about the move away from Amazon for a long period of time. They were just trying to decide when to do it. They felt that now was the right time because they will be able to capitalize on all of the sales for the holiday season.