“Shoes-sneakers in your mind, Why not plan a Nike’s try-in!” Nike is one of the famous brands of footwear of which many are a fan and Amazon is a well-known trending online seller. Let’s know ‘Does Amazon own Nike?’
Yes, at one point in time Nike was a part of Amazon. But now they both are separated. The deal was made for the convenience of the customers, but due to some complaints of the misuse of the deal came up with an impact that ultimately led to the cancellation of the deal. In late 2019, Nike had officially announced that it would stop selling its products directly to Amazon as the first party vendor. This announcement put an official end to the program that was designed in 2017 which they call “the pilot program.”
What was the reason for the separation?
The declining graph of the company’s performance was the reason for the cancellation of the program. The performance of Nike drops down within the 6 months of the deal. The allegations made on Amazon were that the platform was causing “the death of the brands”!
As earlier before internet shopping was so much in trend, consumers were having brand knowledge only through TV commercials or magazine or newspaper advertisements, which made them buy the product. But as the fashion of online marketing increases, The craze of the brand among the people diminished and now people are focusing more on buying cheap products and they don’t feel mistaken as the review part on such online shopping sites made them feel that the decision of buying such cheap products is beneficial.
Nike’s deteriorating performance
As mentioned by The Forbes :
Nike will stop selling merchandise directly to Amazon, as part of its push to sell more directly to consumers, the company confirmed to CNBC. The problem with their partnering scheme was that a company loses all the control over the brand representation on the social sites.
Earlier situation:–
Before 2017 (when they signed the deal) Nike focused all its attention on its branding of the products. For that, they advertise their products on their online networking sites and concentrate more on building their fame by self-work and not by any other sites/ platforms. Like other brands, they also had the fear of losing their customers through such a kind of partnership. The deal was made so that the consumers can get the benefit of directly purchasing whatever they want through the company. They don’t need to roam here and there in search of their favorite footwear.
What were the initial conditions of Nike?
Then, the deal was completely new, at that moment Nike agreed to sell just a limited kind of products to Amazon; and in exchange, Amazon had to make a strict policy for the counterfeits and restricted the unsanctioned sales of the products. The products included were Nike’s athletic footwear, apparel, and other accessories.
What exactly were the problems that compelled the company to stop the project?
The deal was started to cut ties with unauthorized, unlicensed sales and eliminate third-party sellers. With all this, the company also hoped for the redirection of the saves to their channel which would ultimately allow them to collect more customer data and leverage Amazon’s retail scale. And this is what is called an “enhanced brand registry”.
But at certain times Nike felt that they were losing in the competition as they were not having their sanctioned brand store at Amazon.
Conclusion
The two brands were together at a point in time but then one realises its deterioration, so to stabilize themselves and to save the company, Nike put an end to the project.
When the progress can’t be seen then it’s better to separate! Although this pilot project did not work, Nike and Amazon still have a huge market presence and both the brands are doing extremely well.
FAQS
1) Why did the deal end?
Because of the deteriorating performance of the Nike brand and decreasing the craze for the brand among the people. Nike felt that the public is losing interest in the brand and they are focusing more on the price tag, and a platform like Amazon leaves a wide range of products with different price ranges.
2) What loss did the company face?
The decrease in their customers and the deteriorating graph of the company’s yearly performance. The people started losing interest in the brand and were concerned about the price too.
3) Who are the shareholders of the company now?
The top shareholders of Nike are Phil Knight, Mark Parker, Andrew Campion, Swoosh LLC, Vanguard Group Inc., and BlackRock Inc.
4) When did the deal end?
In November 2019, an official end to the deal was announced.
5) What are gray-market goods?
According to the International Trademark Association, gray-market goods are manufactured by the brand owner but are sold through unofficial channels.
