Luxury goods producers are slowly beginning to sell their wares on Amazon, but without firmer commitments form the e-commerce giant to fight counterfeits and deep discounting, some luxury manufacturers refuse to sign on. Matthew Dalton and Laura Stevens report:
Amazon has won over some of the world’s biggest lifestyle companies by pledging action against unauthorized retailers and knockoffs. Earlier this year, Nike Inc. agreed to make some of its products available for sale directly from Amazon, in exchange for a promise of limited policing. But Amazon typically only does that for the biggest brands, people familiar with the arrangements say. Nike sales the last fiscal year were $34 billion, nearly five times Swatch’s annual revenue.
Amazon is concerned about counterfeit goods, but it is also reluctant to help brands stop legitimate products from being sold outside approved distribution channels, said James Thomson, a former senior manager in business development at Amazon and now partner at brand consultancy Buy Box Experts. A multitude of third-party sellers—which often sell at discounts—helps keep prices low on the site with legitimate merchandise, too.
“Amazon will say to any brand, ‘your distribution problem is your distribution problem,’ ” Mr. Thomson said.
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In the chart below you can see that since Amazon’s IPO in 1997, both its stock price and the value of Young Research’s Luxury Goods Index have soared. Both Amazon and luxuries businesses have been buoyed by growth in consumption both in developed and emerging markets.
