Goodbye Geoffrey! Did Amazon Cause Toys R Us’ Inevitable Demise?
Today marks a sad day for all of us 80’s and 90’s children. The final Toys R Us stores are closing their doors today. They gave a good fight and to be honest, stayed open longer than I would have guessed. But was the beginning of the end caused years ago by Amazon?
In the year 2000, the early years of the internet Amazon and Toys R Us struck up a deal. TRU would be Amazon’s one and only toy provider. It seemed like a win-win. Amazon was already a successful online superstore, and TRU had the toy market covered. In this deal, TRU agreed they would pay a $50 million dollar per year premium for these exclusive rights.
It got messy within a few years. Amazon breached the contract and 2004 by selling toys from other retailers. The contract prohibited Toys R Us from even having their own website. A judge blasted Amazon by saying the contract was full of double meanings. Whether intentional or not, it let Amazon make their own rules on the fly. By the time they (Toys R Us) was able to start their website and build an online presence, they were a decade behind their competition. That is forever in Internet years.
What do you think? Was this “deal” with Amazon the beginning of the end?
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