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Amazon partners with luxury retailers

Jeff Bezos (Credit: Amazon)

Amazon, in partnership with Vogue magazine and the Council of Fashion Designers of America, has launched an online storefront for fashion designers featuring 20 buzzy creative names, including Batsheva Hay, Brock Collection, 3.1 Phillip Lim, and Edie Parker, the NYTimes reported.

  • Be Smart: The move will create a new outlet for brands that are currently at risk of bankruptcy after Covid-19 forced the closing of the stores that sell them, resulting in canceled orders and piles of unsold stock. The designers can choose what inventory to sell on Amazon, and they control their own pricing and imagery. They can opt to use Amazon’s fulfillment platform or do the fulfillment themselves. The standard third party selling fees — typically around 17 percent — apply; however, Amazon agreed to eliminate monthly fees, warehouse fees, and packaging fees for the initiative.
  • How times have changed: On an investor call in 2016, Jean-Jacques Guiony, the CFO of LVMH, the largest luxury group on the world said: “We believe that the existing business of Amazon doesn’t fit our luxury, full stop, but also doesn’t fit with our brands. If they change the business model, I don’t know, but with the existing business model, there is no way we can do business with them for the time being.”
  • Eyes on luxury: In January, Amazon was reportedly planning a new luxury platform to compete with Alibaba’s Tmall, along with an $100 million marketing campaign.
  • Bottom line: Whether they like it or not, designers, especially small ones, have no real choice. They need to move their existing inventory, and they need a partner with the logistics to do it. And one that has access to an enormous ready-made consumer base.

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