New Direct Toy Manufacturer Relationships for Amazon.com
Amazon.com said Wed. it forged new direct relationships with toy manufacturers, as the e-tailer announced the launch of toy and baby online stores 4 days after former partner Toys “R” Us relaunched Toysrus.com and Babiesrus.com on its own. The launches marked the official end of the relationship between the e-tail and toy giants, which started amid much fanfare in 2000 but ended early this year after a long court battle.
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Amazon said its new online stores feature “tens of thousands of products, including hard-to-find items from specialty retailers,” adding it “is the largest selection of toy and baby products ever offered through Amazon.com.” Amazon also said that for the first time toy and baby products are eligible for its free Super Saver shipping and Amazon Prime services, allowing customers to save money on their purchases. Toy brands being carried include Fisher- Price, Hasbro, LeapFrog, Lego, Mattel and VTech. Besides Amazon’s toy and baby inventory, the company said, “thousands of additional items are listed by popular merchants” at the site including Target, eToys, Discovery Channel Store and Babystyle.
An Amazon spokeswoman said her company was “buying more direct from manufacturers than we were” during the relationship with Toys “R” Us. But she said: “The key to the biggest selection ever is the combination of our (Amazon) retail offerings, plus additional selection from our 3rd- party merchants such as Target.” Amazon is now “carrying more than 2 times the selection of what our former partner was able to offer and we will continue to add selection over time,” she said. And Amazon now “goes deeper in selection offered by given manufacturers - for example, we carry the full line of Madame Alexander dolls while [Toys ‘R’ Us] only carried select products from the brand.” But she didn’t name specific manufacturers Amazon was going direct with. The spokeswoman also said that “within the first 48 hours after the new site went live, thousands of new baby registries were created in our baby store.”
Toys “R” Us sued Amazon in 2004, accusing the e-tailer of failing to live up to their deal and seeking authority to go solo online again. The e-tailer filed a countersuit, but Toys “R” Us won the case. A N.J. Chancery Court judge ruled in March that Toys “R” Us could end its multiyear agreement with Amazon.com to be the exclusive toy provider for the e-tailer (CED March 3 p7). Judge Margaret Mary McVeigh ruled Amazon had breached their exclusivity deal and gave Toys “R” Us the green light to find new online partners.
Toys “R” Us said in May it chose e-commerce solutions company GSI Commerce and contract logistics provider Exel as those partners, saying the companies will provide a “seamless transition” when the Toysrus.com and Babbiesrus.com e-commerce websites relaunched (CED May 26 p4). Toys “R” Us said GSI is providing technology, customer service and support while Exel is providing fulfillment services for both websites. The toy retailer said the sites would relaunch July 1 with a new look and additional product information to help customers make informed decisions. The company said it plans to make “ongoing enhancements” to the sites as it “continually adds new merchandise offerings and features.”
A Toys “R” Us spokeswoman said Wed. that Toysrus.com and Babiesrus.com relaunched as scheduled Sat. She said “videogames and products from Hasbro and Mattel” were among the products available at Toysrus.com initially. At first we found no videogame products on the site Wed. morning, but items in the category appeared a few minutes later. There were, however, many items in the category not yet available. The spokeswoman said there were fewer that “200 videogames up” but “more are being added daily,” adding the “same is true of Mattel and Hasbro items.” Hasbro and Mattel weren’t listed under the “brands” tab on the site but she said “we typically do not list company names under brands because customers do not usually shop by company.” The company instead mostly features categories such as Barbie, Star Wars and Power Rangers. But Mattel’s Fisher-Price brand was listed under the brands tab Wed. and the spokeswoman said videogame publisher Electronic Arts “is being added” as are videogame hardware manufacturers Microsoft, Nintendo and Sony.
Yet to be determined is whether Toys “R” Us can flourish without Amazon online. Before teaming with the e-tailer, Toys “R” Us had trouble fulfilling many orders during the 1999 holiday shopping season, resulting in a class action suit by customers.
Amazon shares were down 3.47% at $37.27 in afternoon trading Wed. Toys “R” Us went private after being bought by an investment group last year. - Jeff Berman