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In Nike/Amazon partnership, Amazon’s bigger size could put the Nike brand at risk

Selling on Amazon could take the way Nike merchandise is displayed out of its control

It’s not often that Nike Inc. its dwarfed by another company. But if the athleticwear giant expands its pilot program with Inc., as the smaller of the two, Nike would be unable to use its size to control the way the brand is presented, analysts said Friday.

Nike NKE, +9.97% confirmed on its late-Thursday fourth-quarter earnings call that it is piloting a limited assortment with Amazon. AMZN, -0.11% Susquehanna Financial Group said a “full-scale deal” could include the elimination of third-party Nike listings “given how protective Nike is over its brand.” But, that’s probably not part of the deal.

“Removing unauthorized third-party Nike product sales would help enhance Nike’s brand presentation and prevent counterfeit sales,” Susquehanna wrote in a Friday note. “Given Amazon’s reputation as a transactional retailer with no interest in brand building, we have doubts as to whether Amazon will ever agree to the removal of an unauthorized third-party Nike sales from the site.”

Should the partnership grow, there is a major sales opportunity, said Susquehanna (and other analysts). But that brand risk persists.

“Amazon would be the only customer that Nike wouldn’t have significant leverage over given Amazon is about three times...