Why Nike is pulling out its products from store outlets

Nike products are not available in most store outlets today, and many buyers are asking why this is happening. They noticed that the world-famous sneakers are getting harder to find in shops and what could be the reason behind this.

Nike is changing its selling scheme

It was revealed that the removal of sneakers in Nike stores was intentional, which means the company deliberately removed them from the display shelves. As to why the company will do this, it was explained that it wants customers to purchase its products, including sportswear, gear, accessories, and shoes from Nike.com.

To put it simply, the sneaker manufacturer is directing its customers to its official online store and outlets to get the Nike items they want. As per CNN Business, the main objective for this move is for the company to directly distribute its own products rather than through other channels.

It is said to be moving away from the wholesale distribution scheme where the company sold its products to retailers that, in turn, display and sell them in their own stores. Nike said that while this old method helped the company grow since local shops display the new releases and this allowed people to get to know about the new items, it just realized that it could make more through direct selling.

If people buy from Nike’s own website and official brick-and-mortar stores, then it can earn more than double from the sales. Now, as a result of this new selling method, Nike already cut the number of its retailers, and the company is only keeping a handful of partner retailers to help sell Nikes and named Dick’s Sporting Goods and Footlocker as examples.

Retailers response to Nike’s decision

Nike is getting rid of some retail partners, and while the company is optimistic about its decision, many of the retailers were not pleased. They find the new direct selling plan unfair on their side.

“Nike is saying to the retailers that unless you do things that enhance the brand, we're not going to sell to you," Sam Poser, an analyst at Williams Trading, said while another one said, "My loyalty to Nike didn't mean anything. It's all about direct-to-consumer now."

Meanwhile, Retail Dive pointed out Nike is not the only sneaker and sportswear manufacturer that is turning to direct selling. It stated that just like Nike, after figuring out the benefits from selling directly to consumers, they too decided to sell that way. It was mentioned that Under Armour and Adidas are planning to slash their wholesalers as well.