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Takeaway: 2015 Amazon 3rd Party Seller Wrap Up. NKE - This is B-I-G, new Nike patent changing the manufacturing paradigm for first time in 40 yrs.

AMZN - Amazon 2015 Seller Wrap Up


The interesting angle from our vantage point is the influence the AMZN network has on total e-commerce sales. The $76bn in sales the company reported over the past 12 months =  7.6% of ~1 trillion global online dollars, but when you gross up the Third Party selling fees (estimated 20% take rate) into actual retail sales the total sales at retail = $150bn, or 15% of global e-comm sales. And, consumer acceptance of 3rd party sellers just helps AMZN broaden the reach.

NKE - This Is B-I-G


Make no mistake...this is B-I-G.

A new patent suggests that Nike plans to give users much greater control over the customization of Flyknit sneakers, which is right in line with our contention over the past two years.

The implication here is that it will commercialize the ability for Nike to 'Mass Customize' its high-end product at an above-average margin without taking up price.

In the end, this changes up the shoe manufacturing paradigm for the first time since Phil Knight created a Futures model 40-years ago. And to be clear, no one is remotely close to where Nike is in this regard. They can catch up, but Nike has been allocating capital to this initiative as far back as 2004 (to it's 'Considered' product line). We wish competitors all the best in catching up without outsized capital spend and subsequent lower margins.

Link to full note: CLICK HERE

Retail Callouts (1/5) | AMZN 3rd Party, NKE Flyknit Patent - 1 5 16 chart1

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Retail Callouts (1/5) | AMZN 3rd Party, NKE Flyknit Patent - 1 5 16 chart2

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