Amazon.com started out as a website that was known for books, music CDs and DVDs. As the site became more and more popular, it started to take on a wide variety of items. Now Amazon sells items from its own inventory, and it also ties together items from a variety of other retail websites. When Amazon opened up its popular sales platform to other retailers, it also eliminated the ceiling on what it could sell. If Amazon wanted to sell cars online, then it would simply need to team up with an online car sales website to offer those products. With that in mind, Amazon has decided to open up its platform to designer watches and other luxury items.
The thing that Amazon has always been careful of is that, in the end, every product that is bought from the Amazon website ships as an Amazon order. That is why taking on luxury items can be a risk for Amazon. The high price tags and shipping requirements for more expensive products can be a challenge. But Amazon looks at it as a way to expand its ever growing customer base and, more importantly, expand its profit margin as well.
Some of the resistance that Amazon is experiencing is coming from the very manufacturers that make luxury products that are in high demand. For example, the Louis Vuitton is the only retail outlet for Louis Vuitton products. While the company realizes that exposure on Amazon could dramatically increase its sales, the company is also well aware of the potential hit that its image could take if it decided to sell on Amazon. At the same time, getting a company like Louis Vuitton to offer products on Amazon could be just the coup that Amazon would need to get other luxury names on board.
The question is whether or not people who are used to buying luxury items in exclusive Amazon store would be willing to sacrifice that image to buy these luxury items on the same site where they can also buy a set of cooking pans. So far, Amazon has seen some interest from luxury brand names in offering their sites on the top online retailer. But it may take some time, and maybe a redesign of the Amazon website, before people start to see Rolex watches on the same website where people can but used copies of “The Bible.” In an industry ruled by image, a common platform that is easily accessible may not be the most desirable arrangement.