Cosmetics industry braces for the Amazon effect

Estee Lauder at a shopping mall on September 26, 2006 in Beijing, China.
A Estee Lauder location in Beijing. Photo: Getty Images

Amazon quietly became the biggest player in cosmetics retailing last year, with a 21% share of the market — and big-name makeup manufacturers are taking notice, Bloomberg Businessweek reports.

Why it matters: Manufacturers like Estee Lauder are preventing their high-end brands from appearing on Amazon, but not because they think it would hurt profits in the short term. While mass-market products earn higher margins on Amazon sales, these firms worry that selling their luxury brands there will tarnish their brands and decrease their price-setting power.