retail news in context, analysis with attitude

The Wall Street Journal reports on how some manufacturers, concerned that Amazon is fueling its retailing juggernaut at the expense of small retailers, “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 … 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.”

Amazon argues that “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.”

Among the companies that are taking steps to protect other and smaller retailers are running gear manufacturer Brooks; Luxottica, which sells Ray-Ban and Oakley sunglasses; UPPAbaby, which makes baby strollers and car seats; and Thule, which makes cargo containers, bicycle racks and luggage.
KC's View:
Some suppliers will be able to resist the siren song of Amazon, which offers so much distribution. But I’ve always argued here that sometimes there is the intelligent loss of business … that when one retailer accounts for an enormous percentage of your business, it puts you at risk.

This won’t stop or even slow down Amazon, in all likelihood … especially because Amazon is not a price play as much as it is a value/convenience play. But I think that if some manufacturers can protect other valued customers, it is probably a good thing.