Zappos Outlet Store

Take a look Inside Zappos!

The Zappos Story

The year was 1999, and our founder, Nick Swinmurn, was walking around a mall in San Francisco, looking for a pair of shoes.

One store had the right style, but not the right color. Another store had the right color, but not the right size. Nick spent the next hour in the mall, walking from store to store, and finally went home empty-handed and frustrated.

At home, Nick tried looking for his shoes online, and was again unsuccessful. Although there were a lot of "mom and pop" stores selling shoes online, what was interesting to Nick was that there was no major online retailer that specialized in shoes.

So, since it was 1999, and anything seemed possible at the time, Nick decided to quit his day job and start an online shoe retailer... and Zappos.com was born!

The original idea was to create a web site that offered the absolute best selection in shoes in terms of brands, styles, colors, sizes, and widths.

Over the past 8 years, the Zappos brand and our aspirations have evolved, and in addition to offering the best selection, we now want to be the company that provides the absolute best service online -- not just in shoes, but eventually in any category.

So here is our vision:

• One day, 30% of all retail transactions in the US will be online.
• People will buy from the company with the best service and the best selection.
• Zappos will be that company.

We believe that the speed at which a customer receives an online purchase plays a very important role in how that customer thinks about shopping online again in the future, so at Zappos, we have put a lot of focus on making sure the shoes get delivered to our customers as quickly as possible. In order to do that, we warehouse everything that we sell, and unlike most other online retailers, we don't make an item available for sale unless it is physically present in our warehouse.

Our goal is to position Zappos as the online service leader. If we can get customers to associate the Zappos brand with the absolute best service, then we can expand into other product categories beyond shoes. And, we're doing just that.

Internally, we have a saying:
We are a service company that happens to sell ________.

• shoes
• and handbags
• and clothing
• and eyewear
• and watches
• and accessories
• (and eventually anything and everything)

We view shoes as just our foundation. We believe that as long as we are known for our service, then expanding into almost any category is possible.

So a little bit of information about shoes: It's a $40 billion market in the US, and in 1999, $2 billion of that was sold by mail order catalogs. In surveying our first customers in 1999, we found that only 1 out of 3 customers had purchased shoes by mail order before, implying that the e-commerce market would be much bigger than $2 billion.

In brick and mortar stores, about 1 in 3 sales are lost due to the customer's size not being in stock. Brick and mortar stores are limited in how much inventory they can carry, and therefore they are limited in the number of brands, number of styles per brand, and number of sizes and widths they can carry.

Zappos.com currently stocks more than 3 million shoes, handbags, clothing items and accessories from over 1,100 brands. We offer the absolute best selection of shoes available anywhere, but much more important to us is offering the absolute best service.

We staff our call center 24/7, and currently have a staff of over 1,300 people. The vast majority of our employees work on the front lines taking care of our customers or shipping shoes out of our warehouse. We believe that the most important key to our success will be our service-oriented culture, and we spend a lot of time and effort working on ways to constantly improve our culture.

As one example, every new employee that we hire in our corporate office is required to go through 4 weeks of Customer Loyalty training (answering phones in our call center) before starting the actual job that he/she was actually hired for. To us, customer service isn't just a department -- it is the entire company.

Over the years, our focus on service has resulted in our fast growth, driven primarily by repeat customers and word of mouth. Our gross merchandise sales have been:

• 1999: Almost nothing
• 2000: $ 1.6 mm
• 2001: $ 8.6 mm
• 2002: $ 32 mm
• 2003: $ 70 mm
• 2004: $184 mm
• 2005: $370 mm
• 2006: $597 mm
• 2007: $840 mm
• 2008: Over $1 billion (goal)

We believe that if we continue to focus on providing the absolute best service and the absolute best shopping experience, then we can continue to grow as a company.

Our hope is that our focus on service will allow us to WOW our customers, our employees, our vendors, and our investors. We want Zappos to be known as a service company that happens to sell shoes, handbags, and anything and everything.