Nike Inc (NYSE: NKE) have announced that they will not sell directly to Amazon (NASDAQ: AMZN) in an attempt to sell directly to consumers as the company confirmed to CNBC.
The decision by Nike to make this change ends an experimental pilot which was launched in 2017.
The initial terms of the deal allowed Nike to sell a limited range of products to Amazon in exchange for tighter regulations on selling counterfeits on Amazon. This deal also included Nike’s athletic footwear, apparel and other merchandise.
Analysts have said “I think Nike is putting more emphasis on its own online business, as evidenced by the news that its new CEO of a former CEO at eBay,” said Morningstar analyst David Swartz. “Also, Nike was probably unhappy that Amazon hasn’t gotten rid of the third-party sellers and fakes.
Nike products will be available to purchase items on the company website, or through independent stores which Nike sell directly too.
Company officials said that the pilot partnership between Amazon and Nike was no longer part of Nike’s wider sales strategy.
“We will continue to invest in strong, distinctive partnerships for Nike with other retailers and platforms to seamlessly serve our consumers globally,” Nike confirmed.
Ending this partnership will allow Nike to take stronger control of their brand, and bring sovereignty back.
Nike said: “As part of Nike’s focus on elevating consumer experiences through more direct, personal relationships, we have made the decision to complete our current pilot with Amazon Retail.
“We will continue to invest in strong, distinctive partnerships for Nike with other retailers and platforms to seamlessly serve our consumers globally.
“We will continue to partner with Amazon Web Services to power a suite of services on Nike.com and within Nike’s ecosystem of apps.”
Amazon have declined to comment on the story, but it is clear that Nike are looking to take the reign back to promote organic growth.
Amazon have looked to expand into many different sectors and are currently involved in an investigation over the potential takeover of Deliveroo.
However, Nike have seen more benefit in closing this partnership and this may allow Nike to have control over their own operations and seek expansion with other companies.
