Conversations & Insights December 7, 2015

L2 Insight: The Amazon Delusion

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Luxury brands like Hermes, Chanel, and LVMH have long had a no-engagement policy with Amazon.

However, a no-engagement policy in regards to the world’s largest e-tailer is nothing but a delusion.

For example, Estée Lauder does not distribute on the platform and has over 7,000 products available on the e-tailer.

How is that possible? Those 7,000 SKUs are listed by third party merchants, unaffiliated with Amazon yet responsible for the majority of its sales.

Those merchants sold 2 billion items last year, and account for 75% of Beauty listings and 85% of Hair Care listings on Amazon.

In exchange for becoming an official seller, Amazon sometimes offers to regulate these third-party sellers.

L’Oréal Group, for example, began to officially distribute its Vichy and La Roche-Posay brands through Amazon’s Luxury Beauty store in November.

Overnight, the number of Vichy listings on Amazon dropped from 503 to 32, and the number of La Roche-Posay listings dropped from 637 to 57.

This is all proof that brands should stop ignoring the world's largest e-tailer and find a way to work with Amazon.

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