"In the late 1990s, when the internet was still something of a novelty and e-commerce was in its infancy, Toys "R" Us made a bold move. It partnered with Amazon, one of the most influential online companies at the time. The goal was to expand their reach by improving their online presence. It was supposed to be a mutually beneficial partnership, but it soon turned sour."
"The deal was struck in 2000. Toys "R" Us handed Amazon the keys to its online kingdom. In exchange, Amazon was to sell the retailer's toys exclusively. This should have been a win-win, right? But Amazon started expanding. Third-party sellers began listing their products on Amazon's platform, directly competing with Toys "R" Us. Things started to unravel between the two companies. Toys "R" Us had outsourced its online business, which meant Amazon gained valuable customer data and direct access to Toys "R" Us's customer base."
In the late 1990s Toys "R" Us partnered with Amazon to expand its online presence. The 2000 agreement made Amazon the exclusive seller of Toys "R" Us products and effectively outsourced the retailer's online business. Amazon's platform began to host third-party sellers while Amazon expanded its own toy offerings, creating direct competition. Outsourcing granted Amazon access to valuable customer data and direct access to Toys "R" Us's customer base. A poorly written contract limited Toys "R" Us's ability to respond. In 2004 Toys "R" Us filed a lawsuit seeking $200 million in damages, and Amazon fired back.
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