The Success Story of Zappos
How Delivering Happiness Made Them Richer

Photo by theritters / CC BY

Tony Hsieh of Zappos believes in delivering happiness. As CEO of this company, he has always lived by the mantra of delivering the right size, color, width and brand of shoes to a customer is happiness indeed. It’s evident that when the customer appreciates a pair of shoes ordered from the website, it would lead to a long-term customer relationship. Zappos has built a name in the business success front since 1999. And ever since joining, they’ve grown even bigger. This is their story.

Developing The Shoe Niche

Founder Nick Swinmurn, created a website that could dedicate all of its heart and service to shoes. This was a fruit of an unproductive shoe shopping experience wherein he couldn’t find the right shoe and color he’d been wanting. Going online for it also didn’t help. In 1999, there was no website anywhere in the world that focused on shoes as a niche. So he jumped on the idea and created Zappos. 

The initial idea

The company initially wanted to focus its services on delivering goods on-time because that’s what customers always wanted their online retailers to be perfect at. Looking into the future, they believed that the speed of their delivery process determines how customers think of choosing which online store to trust. They were right to focus their energies into not only providing the best selection of shoes in the world, but also to deliver a piece of happiness every time the customers get their goods on time and without fault. 

Focusing on customer’s Happiness

Hence, the company obtained and lived up to their motto: Delivering Happiness. A few years later, the site was such a success wanted to acquire the company. But it was 2005 and the company had already been enjoying much of its $370 million in gross sales. At this point, there was no profit yet but the company was poised to break even. They were ripe for saying no to Amazon without apparently thinking about it. 

Teaming up with Amazon

Tony Hsieh finally opened their doors to negotiations to Amazon 2009. The Tech giant already knew full well that this would be a resounding win because Zappos’ already had increased net sales of 20.5% in 2008 and its income grew to 500%. The family was indeed exponentially growing. But they judged this new partnership could lead to more growth. 

Like many other companies in the U.S., the recession took a toll on its profits and the company had to let go of 8% of its workforce to save money. However, they recovered much if its losses in 2010, in fact, they’ve grown again to about $1 Billion in sales, was profitable and ever zanier as they’ve ever been. The merger with Amazon proved to be a very strategic move.

Now, many years unto the merger, has become one of the top 12 companies to work and is ranked among the best online retail brands in the world without ever losing sight of what’s important: Making customers happy with every item delivered successfully on-time. They commit to this mantra because it’s what built their success and they know that the customers are the backbone of any business, whether you’re a “mom and pop” store or a retail giant. 

Lessons from the founders of Zappos

  • Find an overlooked niche where nobody has provided a service yet.
  • Focus on making your customers happy not making profits at first. Money will come later.
  • Teaming up with another great company can leverage your sales

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"If I have seen further than others, it is by standing upon the shoulders of giants." Isaac Newton

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