Amazon is the biggest e-commerce platform in the world. If you're a brand selling products online, you need to be there. Or do you?
Luggage upstart Away and shoemaker Birkenstock have decided not to sell on Amazon in the name of protecting brand integrity.
Away sells luggage starting around $200. Birkenstock sells shoes from under $50 to over $200. They’re not luxury brands. But they’re also not selling low-margin commoditized products. Countless similar luggage and footwear brands sell on Amazon.
However, leaders of Away and Birkenstock say it doesn't fit their brands. They talked about the decision earlier this week at the Code Commerce conference in NYC.
Birkenstock used to make a large portion of its sales on Amazon. Then it pulled its products from the marketplace on January 1, 2018. CEO David Kahan cited above all the brand experience, saying "It went against every mandate we have of good brand management.”
Away has never sold on Amazon. Or to any third-party seller. It is a new company, but growing fast. A recent funding round valued it at $1.4 billion. When you search "away luggage" on Amazon, you'll see Amazon Basic branded alternatives for under $70. "Some people will buy that and they aren't the Away target customer," said Away brand officer Jen Rubio.
The full interview with Birkenstock CEO David Kahan is available on YouTube, as is the interview with Away CEO Steph Korey and brand officer Jen Rubio.
Amazon is not suffering. The site accounts for around 47% of US e-commerce sales according to eMarketer. Over half of American adults subscribe to Amazon prime. But controversy around the company is growing.
Regulators in the US and Europe have brought antitrust cases related to Amazon's third-party seller marketplace. Recent negative coverage also includes counterfeit products, fake reviews, and deaths caused by contract delivery drivers in a rush.
It's hard to know the exact rationale of leaders at Away and Birkenstock. They didn't offer many details. Brands like theirs face a difficult decision. Sell on Amazon by jumping through hoops and they get added revenue. But that also means giving up control and creating new risks. Such as associating your brand with an increasingly divisive company. The leaders didn't mention any of the controversies around Amazon. But it's hard to imagine they didn't factor into a decision based largely on brand image.
Birkenstock CEO David Kahan did bring up counterfeiters. A year and a half after the company’s decision to stop selling on Amazon, shoes listed as Birkenstocks are still selling well there. A search for "Birkenstock" produces 7 pages of results, so over 300 product pages. Many of the listings have thousands of reviews.
Birkenstock also forbade its retail partners from selling there. So any listing is at best an unofficial reseller. It's hard to say how many of the listings are counterfeit products. Many reviewers write that the shoes they received are not authentic Birkenstock shoes. There are loads of positive reviews. But a 2018 Washington Post analysis found that over 50% of reviews were fake on some Amazon listings.
It's easy to see why Birkenstock wants to avoid Amazon's marketplace. It's chaotic. Impossible to tell at a glance who is selling what and from where.
It's not easy to see how many brands will follow the same strategy as Birkenstock and Away. Despite the chaos, there's clearly money to be made for third-party sellers on Amazon.
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