Outmatched by Amazon.com Inc. (AMZN) in their ability to reach customers, companies like Nike, Inc. (NKE) , Children's Place Inc. (PLCE) , Microsoft Corporation (MCFT) , Sears Holdings Corp (SHLD) , Samsung Electronics Co Ltd, Ashley Furniture Homestores and even upstart retailers like mattress maker Tuft & Needle have turned to the e-tailer to help sell their products.
"Retailers are trying to go where the customers are," Christian Magoon, CEO of Amplify ETFs, whose firm sells an ETF made up of companies for which at least 70% of their revenues come from online retail sales, told TheStreet by phone.
Each of these companies has had to ask themselves, "Do I Amazon or do I not Amazon?" Natalie Kotlyar, a leader of BDO's Consumer Business Practice, told TheStreet on Monday via phone.
In the last few weeks, Nike has partnered with Amazon to sell select sneakers on the e-tailer's site, while Sears has joined with Amazon to sell its popular appliance line, Kenmore.
In the case of Sears, wrote TheStreet reporter Natalie Walters, the partnership is mutually beneficial: "Amazon will learn from Sears Home Services and Sears' Innovel Solutions, which is a fleet of 1,100 trucks that provide four million delivery and installation visits each year. Amazon is already looking into building up its own electronics installation and repair service to compete with Best Buy's (BBY) Geek Squad, Recode reported on July 10."
Kotlyar said companies that join forces with Amazon gain wider distribution and better shipping networks, need contribute relatively little in light of what they gain, and as Amazon grows its Prime service and video and develops Alexa, both the e-tailer and its partners become better known with customers. Yet, she said, there could be drawbacks.
"The scary part is, the more companies join Amazon, the more it becomes empowered," added Kotlyar. "And what will it do to the smaller e-com retailers? If you have niche company, if you have a particular base, and your product has to be showcased a certain way, all that gets lost when you join Amazon."
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However, Tuft & Needle, based in Phoenix, has few quibbles with Amazon since it signed up to sell its goods on the platform in late 2013, shortly after opening the business. Last year, a quarter of the company's sales, or $25 million in products, were sold on Amazon, and the company expects to triple that number this year, Jeff Wells, Tuft & Needle's vice president of Amazon strategy, told TheStreet by phone.
At first, added Wells, the company used Amazon.com as a leveraging platform, so customers could read reviews of its products and buy them on e-tailer's site.
Tuft & Needle realized that many customers prefer to shop on Amazon.com rather than an unknown e-commerce site, added Wells. He said that customers tend to trust Amazon, they may have their credentials (address and credit card information) stored on the site, and if they are Prime members, they like the shipping arrangements.
"We used to be afraid that Amazon would take business away from us," said Wells, but the reverse has happened.
In fact, Wells said the mattress company is gung-ho about Amazon. "There's a lot of press about the devil in Amazon, but we don't see it. We have had a great experience working with Amazon."
Neither Amazon, Nike, Microsoft, Samsung, the Children's Place or Ashley answered a request for comment from TheStreet.
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