July 5, 2016 To: Our Valued Birkenstock Partners From: David Kahan, CEO, Birkenstock Americas
Subject: Birkenstock Products on the Amazon.com Marketplace
As brand managers responsible for the stewardship of Birkenstock, protecting the equity and consumer trust we have earned over our 240-year history is of paramount importance to our entire team. Decisions we make must always have the long-term health of the brand in mind. They must never compromise the brand
’s integrity
, consumer confidence, or the trusted relationships with our retail partners. As demand for Birkenstock products has grown, so have our efforts to protect our brand equity. This includes establishing carefully-managed authorized distribution and a strict MAP pricing policy. Unfortunately, this surge in demand has also created opportunities for some to try and
take advantage of the brand’s popularity. Which brings us to Amazon.
As many of you know, when I joined Birkenstock three years ago, Amazon direct was one of our largest accounts. Since then I have presented multiple proposals and "out-of-the-box" ideas to Amazon management in an effort to maintain a fair and competitive environment for all
–
including our retail partners selling as third parties. The Amazon marketplace, which operates as an "open market,
”
creates an environment where we experience unacceptable business practices which we believe jeopardize our brand. This includes postings by sellers proven to have counterfeit Birkenstock products. It also includes a constant stream of unidentifiable unauthorized sellers who show a blatant disregard for our pricing policies. Policing this activity internally and in partnership with Amazon.com has proven impossible. My goal has always been for Amazon, our retailers, our brand and our consumers to all mutually benefit by our presence on the platform. Unfortunately, after extensive discussions and years of deliberations, we have concluded that this goal is simply not possible. Therefore, we share the following policy shift:
EFFECTIVE JANUARY 1, 2017 BIRKENSTOCK USA WILL NO LONGER AUTHORIZE THE SALE OF ANY BIRKENSTOCK PRODUCTS ON AMAZON.COM.
This means we will no longer supply Amazon direct and we will no longer authorize any third party sellers. Additionally, we will not sell to Amazon via a third party.
We realize that many of our best brick and mortar retail partners play by the rules and have found incremental sales as third party sellers. We are appreciative of the way you "play the game" and of the responsible support you have given to the brand. However, Amazon has made it clear
that the only way to achieve a “clean” environment
(no counterfeits and no unauthorized sellers), is to sell our complete product offering to Amazon directly. We believe this decision does not align with the long-term health of our brand or your business objectives. Sadly, after this policy change goes into effect, products
marketed as “Birkenstock”
will likely still be offered on Amazon.com. By taking this course of action, we are, in effect, leaving the Amazon marketplace to counterfeiters, fake suppliers and unauthorized sellers with whom we have no relationships. Our intention is to diligently communicate to consumers that they should ONLY PURCHASE BIRKENSTOCK PRODUCTS FROM AUTHORIZED RETAILERS and that if they see any
“
Birkenstock
”
product on Amazon.com, we cannot in any way confirm its validity or verify its quality. It may be counterfeit. It may be stolen. It may be manufactured under questionable labor and environmental conditions. So, BUYER BEWARE. We realize the potential implication on your Spring 2017 purchases and the timing of this announcement gives you a full season of advance notice. We appreciate your support and expect absolute compliance to this policy. We will be vigilant in handling any retail partners who choose not to comply after January 1, 2017. By sharing the Birkenstock brand with the best retailers who can ensure the highest degree of integrity and service, we believe the policy we share today is one that will lead us to a successful future as long-term partners. Thank you for your continued support of the Birkenstock brand. Sincerely, David