Amazon and Toys R Us entered a partnership in 2000, giving Toys R Us exclusive rights to sell products on Amazon.com. According to Amy Martinez, both companies had different motives for wanting the partnership. For Amazon.com, it was a strategy to expand through partnerships. For Toys R Us, the deal meant “access to a major online sales channel.” The partnership was terminated early when Toys R Us sued Amazon.com. They argued that Amazon allowed other toy sellers to sell products through Amazon.com. Amazon countersued and argued that Toys R Us failed to keep products in stock. In 2006, Judge Margaret Mary McVeigh ruled that Amazon.com did in fact, breech the contract. My opinion is that because Toys R Us did fail to keep products in stock, it should have automatically voided the contract. I think that the outcome should have been that both party’s claims be denied and the contract terminated.
Amy Martinez, Amazon Settles Long-Standing Legal Dispute With Toys R Us. February 1, 2012. The Seattle Times, Retrieved August 1, 2012 from http://seattletimes.nwsource.com/html/businesstechnology/2009333705_amazon13.html
An advantage that could have been considered is that Toys R Us is a nationally known toy store. They offer a wide variety of products that is much larger than most toy stores. The partnership between Amazon.com and Toys R Us brings in more business for both companies. A disadvantage is that Amazon.com could not sell any other company’s toys without disciplinary actions. At the time the agreement was made, it did benefit both companies. However; to better fit both company’s needs, the terms should have been planned out better.
My recommendations for Amazon.com would be to talk to Toys R Us and make up a new contract. Neither company is achieving their goals by taking this case to court. Put clauses in the new contact that will better benefit both Amazon and Toys R US. Obviously Amazon is making money for Toys R Us by selling...
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