Amazon.com will create a co-branded toy and game Web site with Toysrus.com, the online arm of retailer Toys R Us. The site is expected to launch in Fall 2000. The store will initially be marketed to the customers of both partners.
Under the terms of their agreement, each company will assume responsibility for specific operations within the site. Toysrus.com will identify, buy and manage inventory, while Amazon.com will take care of the online presence, order fulfillment and customer service.
According to the terms of the agreement, Amazon will receive a fixed series of payments, per unit payments and a percentage of the revenue generated. The revenue percentage is in the single digits. Amazon will also receive warrants allowing it to purchase 5% of Toysrus.com.
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