Is this the dark side of Amazon? At the center of plenty of channel conflict

I know, I know, we always seem to be using Amazon as an example. Well the company gets plenty of press–both good and bad. This probably falls better into the latter category. The article, “More brands are leaving Amazon, but the strategy could backfire,” (CNBC, January 11, 2010) describes how some bigger brands–including IKEA and Nike–have stopped selling through the online giant. These brands have become frustrated with Amazon’s failure to police counterfeit products or are concerned with competition from the retailer or its third-party sellers. The brands might leave, but because third-party sellers still offer the brands, their departure does little if anything to harm Amazon–and may do greater harm to the brand. A bit of a catch-22 for large brands.

This situation provides a good example of vertical conflict (between Amazon and the brands) and horizontal conflict where third-party sellers are competing with brands trying to sell direct through Amazon. It also offers an opportunity to discuss how a brand can lose control of its strategy when third-party sellers set their own pricing and messaging. Thus, it has relevance to Chapters 3 (competition and Amazon chapter-opening case), 8 (branding), 10 (channels of distribution and channel conflict), and 12 (retailing). With that much relevance I couldn’t hold back.