- Toys R Us has filed a lawsuit against Amazon.com, saying that the online retailer has violated their contract guaranteeing that Toys R Us would be its exclusive seller of toys and games.
The two companies have been in business since 2000, when they joined forces in the wake of what had been a disastrous Christmas season for Toys R Us – it had plenty of online sales, but had an awful time trying to fulfill all its order.
The New York Times reports this morning that “under the contract with Amazon, Toys R Us agreed to pay $50 million a year for 10 years for the exclusivity provision, which had a few exceptions, as well as a percentage of Toys R Us sales on the Amazon site.”
The deal actually has provided Amazon with a template for profitable growth, and it has created similar deals with a variety of different retailers in select categories; Amazon has become a full-service “portal” of sorts, and even has begun competing with eBay in the auction business.
Amazon said that the lawsuit by Toys R Us is without merit, but did not go into details.
- A new study by Shop.org predicts that online retail sales will grow 27 percent to $144 billion in 2004, but notes that this growth rate is far below the 51 percent growth seen in 2003.
Expected to be the best performing categories – apparel, flowers, cards, and gifts.
Total online sales in 2004, the study predicts, will account for about 6.6 percent of total retail sales, up from 5.4 percent a year ago.
In addition, the study says that about 79 percent of e-tailers were profitable in 2003, up from 70 percent in 2002.