On Tuesday evening Amazon incited anger and panic among their 3rd party sellers by enacting restrictions on various ASINs (product listings) for Nike branded items.
Amazon seller support bombarded many 3rd party sellers with dozens of emails at once. One email for each affected product.
Currently, tens of thousands of 3rd party sellers sell Nike products on their storefronts. Many sellers report that a majority of their most profitable items are from Nike.
This comes as particularly disturbing news as some of the sellers of these items were part of what resellers have coined as the "pay to play," program. While many sellers were "grandfathered" into selling Nike products, some 3rd party sellers paid fees of $1500 for the "permission" to sell these items on Amazon.
This is of course in addition to all other Amazon fees and membership dues.
What We Know So Far
Amazon has historically provided little information with its 3rd party sellers until changes have been enacted.
While many have predicted more restrictions and tighter brand approval requirements to come as Amazon works to engage in more direct deals with large brands like Nike, Coach and Under Armour, this was a shocking development.
Here is what we know and don't know now...
- Amazon is allowing sellers with inventory of effected ASINs until July 13th of 2017 to sell inventory on their platform.
- Reports show that Amazon has not (yet) treated sellers who paid the $1500 "pay to play" fee any differently.
- Sellers have reported as recently as Wednesday morning that Amazon is still accepting $1500 fees for approval to sell Nike. It is unclear what this will entail.
- Amazon has not restricted the entire Nike brand for existing sellers but just a number of ASINs.
- It is unsure if Amazon is going to restrict the entire brand and become the sole (no pun intended) seller of Nike products on their website.
Here is what some sellers are venting in my public Facebook group FBA Today.
"Last year we spent over a $600K on Nike products alone. This year we are on track to spend more than 1 million at Nike locations around the country. On top of that, Amazon made more than $800K on us last year and much of that is directly contributed to Nike sales. This year Amazon will make more than $1.5 million on us." -Garland Sullivan
Multi-million dollar Amazon seller, CEO of Amazonconsultingexperts.com Sam Cohen says,
"It is frustrating to run a business when you don't know what the future holds. We have sold millions of dollars worth of authentic Nike shoes and apparel but are now weary to continue investing in a brand that Amazon seems to have ambiguous future plans with. Communication between Amazon and the 3rd party seller needs to improve in order for us to feel confident in our ability to operate sustainable businesses on their platform. While the opportunity to sell on Amazon has allowed us to sell tens of millions of dollars worth of product to customers we could have never reached on our own, it is clear that there is room for improvement here. We hope that happens soon."
3rd party sellers are left with many unanswered questions, the answers of which will greatly impact their ability to make a living on the Amazon platform.
Is this the end of Nike for 3rd party sellers or just a one off move by Amazon?
Is this going to be happening across more and more brands each month?
Only time will tell but one thing is certain: 3rd party sellers will be paying close attention to this as it unfolds.