Partnerships and compromises may be the salve to soothe this wound, yet there's no disguising the displeasure felt by some traditional retailers toward this latest manufacturer foray into selling. Although some rumors of major national retailers threatening to cut off suppliers that sell their products direct to consumers appear to have been exaggerated, merchants are clearly frustrated with the transition from supplier to rival. In June, Home Depot mailed a letter to its vendors suggesting that a decision to sell direct via the Internet could jeopardize their relationship. However, we too have the right to be selective in regard to vendors we select, and we trust that you can understand that a company may be hesitant to do business with its competitors. Tensions are high because the stakes are high.
Market share hangs in the balance, as do the loyalties of fickle consumers.
To a certain extent, the growth of on-line sales has left many manufacturers in a difficult position. They feel that there's too much opportunity to stay clear of the Internet, and contend that no one can present their brand as well as they can. But taking advantage of this new channel raises fulfillment and customer service issues that manufacturers, accustomed to shipping in bulk and operating on traditional business schedules, are ill-equipped to handle. For Nike, the partnership with Fogdog caps a year-long investigation of how to develop a presence on the web without compromising its business with traditional retailers. The athletic powerhouse first started selling on the web in February 1999, but took the site down a few months later to examine what it had learned and to plow that learning back into its next attempt at Internet selling.