These Manufacturers are Avoiding Amazon

It turns out, being part of the largest e-commerce retail operation in America isn’t something every manufacturer wants. Manufacturers looking to protect their local sellers and their brand images are trying everything to differentiate their products and to keep them off of Amazon.com. Ruth Simon reports at The Wall Street Journal that brands are using technology, exclusivity, and price controls to prevent Amazon from controlling all of their business.

Some manufacturers are enforcing minimum advertised prices to make it harder for online sellers to undercut local merchants, while others give local stores first dibs on new products or funnel customers from their own websites to local outlets.

“The pendulum has swung,” said Rich Tauer, president of Quality Bicycle Products, a Bloomington, Minn., bicycle wholesaler that won’t sell to Amazon. The company’s sales representatives push brands that support local retailers by restricting advertised prices and enforcing restrictions on where products are being sold.

Nearly 90% of U.S. consumers selected Amazon as the online retail site they use most, according to RBC Capital Markets, which estimates the Seattle giant controls roughly 20% of U.S. online retail sales.

Amazon says more than half of the items sold on its site come from small businesses and entrepreneurs. “Amazon helps small businesses increase sales and reach new customers by providing access to more than 300 million customers world-wide,” a spokesman said.

While many brands sell directly to Amazon or through third parties, some worry about tying their fortunes too closely to one customer and fear that online price wars will damage their image.

Read some of the strategies businesses are using here.