RETAIL BLUES: A Nike-Amazon deal has sporting goods chains running scared.

Shares in several major sports chains hit 52-week lows on word that Nike (NKE) may soon be selling its gear directly on Amazon (AMZN).

Goldman Sachs (GS) said Wednesday it believed the deal would give Nike better exposure to Amazon’s huge retail channel and customer base, especially millennials.

Nike goods can already be found on Amazon subsidiary Zappos.com, and its shoes and gear can be found through third-party sellers on Amazon. Goldman believes the deal would give Nike better control of its brand’s presentation on the site.

But investors saw mostly the gravitational pull of Amazon, sending shares of Dick’s Sporting Goods (DKS), Hibbett Sports (HIBB), Big 5 Sporting Goods (BGFV), Finish Line (FINL) and Foot Locker (FL) plummeting between 4 percent and 5 percent in Wednesday trading.

If you want a deeper understanding of Amazon’s goals, I highly recommend Stratechery’s analysis of the Whole Foods buyout.

Here’s the gist:

I suspect Amazon’s ambitions stretch further, though: Amazon Grocery Services will be well-placed to start supplying restaurants too, gaining Amazon access to another big cut of economic activity. It is the AWS model, which is to say it is the Amazon model, but like AWS, the key to profitability is having a first-and-best customer able to utilize the massive investment necessary to build the service out in the first place.

I said at the beginning that Mackey mis-understood Amazon’s goals, strategies, and tactics, and while that is true, the bigger error was in misunderstanding Amazon itself: unlike Whole Foods Amazon has no desire to be a grocer, and contrary to conventional wisdom the company is not even a retailer. At its core Amazon is a services provider enabled — and protected — by scale.

Is there a point where Amazon’s ever-increasing scale becomes a net loss for consumers?