Why Luxury Brands Refuse to Sell on Amazon

luxury brands

Amazon.com, one of the most profitable online companies, is the undoubted king of the hill when it comes to selling stuff online. When you use the retail giant’s website, you can buy just about anything, from groceries to the latest in consumer electronics. According to recent reports, the e-commerce juggernaut has expanded its horizons to include a range of its own high-fashion goods. While, on the face of it, it has been a popular move with buyers, there is a simple explanation for this; many luxury brands are reluctant to list their premium items on Amazon. So, why do luxury brands refuse to sell on Amazon?

luxury brands

Amazon Bringing Its Own Fashion Brands

According to Engadget, the company has had its eye on the fashion and luxury goods industries for some time now. This was made obvious when Amazon launched seven fashion brands last year, namely James & Erin, Lao & Ro, Franklin & Freeman, Franklin Tailored, Society New York, and North Eleven and Scout + Ro.

The brands – which have been tailored to be more affordable than most established names – produce about 2,000 pieces of clothing for women, men and kids. It makes perfect sense for Amazon to dive into this lucrative segment, taking advantage of its 300 million strong active user base, of which more than 60 million subscribe to Amazon Prime.

Although Jeff Bezos’ firm is hardly a newcomer to the clothing business, it considers high-fashion as the next big thing. Its multi-million-dollar advertising campaigns have positioned Amazon Prime as an online marketplace for high fashion, where luxury goods can be offered without compromising on affordability and convenience.

Incompatible Marketing Strategies

Still, many luxury brands have their reservations about the viability of Amazon as a distribution channel. For instance, LVMH, the company behind a number of exclusive brands that include Givenchy, Dior, Celine and Louis Vuitton, has openly been skeptical of Amazon’s marketing strategy as well as the wisdom of a top tier brand being sold on its website. According to Jean-Jacques Guiony, CFO of LVMH, his company’s business does not fit in with Amazon’s model, and he does not foresee doing business with them in the near future.

This then begs the question: Why would LVMH not want its brands listed on the largest online marketplace in the world? There is a simple answer. Companies like LVMH are solely reliant on their own branded distribution channels. For instance, Louis Vuitton products are only available at accredited stores in exclusive locations scattered around the world. It is vital for this type of luxury brand to exercise complete control over where their products are sold.

Premium Brands Fear Selling on Amazon Could ‘Cheapen’ Their Image

There is another perspective taken by some of the high-end brands with regard to listing their items on the Amazon website. The fear is that, in doing so, their products will be devalued in their customers’ minds. From the point of view of a consumer looking for luxury goods online, this view is completely understandable when you consider that an expensive item of haute couture may be listed alongside condiments, dishwashing soap or other commonplace household goods.

Due to the high price of luxury goods, it is vital that they reflect the idea of exclusivity, which what people who purchase these items really want. Julie Zerbo, who founded, and is the editor-in-chief of ‘The Fashion Law,’ noted that as soon as Louis Vuitton began to mass produce its bags and sell them for lower prices, there was a significant drop in sales.

Risk of Counterfeiting

One major problem that plagues Amazon, particularly because almost anyone can sell products on the website, is that of counterfeit goods. This has proven to be a significant stumbling block to luxury brands partnering with Amazon.

Executives from the Swatch Group planned to sell some of the company’s most expensive watches via Amazon early last year but pulled out of the plan after months of talks between the companies stalled. Swatch, which produces well-known and highly coveted brands, including Blancpain, Omega and Longines, wanted Amazon to offer assurances that it would proactively screen its site against unauthorized retailers and counterfeit watches, a demand that Amazon was reluctant to agree to.

Conclusion

So, while Amazon still remains the best place for you to go online to for the bits and pieces you need, luxury brands generally feel that listing on the site could do them more harm than good. However, the success of Amazon’s in-house brands and its growing customer base is impossible for the makers of premium goods to ignore.

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