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Amazon bought zappos because zappos is a top notch shipping, fulfillment, and logistics company. That happens to sell shoes but they can easily transition to so

Amazon bought zappos because zappos is a top notch shipping, fulfillment, and logistics company. That happens to sell shoes but they can easily transition to something else like how they experimented with accessories and even computer goods. Amazon made a cheap deal to buy a younger smaller amazon to add to their existing expertise. Tony Hseih is amazing to me. LinkExhange sold to Microsoft when he was in his mid 20's and now this. Amazing.

imajes 17y ago
actually i would suspect that Amazon partnered with zappos because zappos has a great company culture and brand, and amazon are having problems retaining theirs as they get bigger. I am sure amazon doesn't need help doing supply chain - in fact I am certain there'd be significant savings to have amazon fulfill zappos' orders.
- mbrubeck 17y ago
  Amazon could definitely use Zappos' brand recognition in the shoes/fashion market. Amazon tried entering that market under its "Endless.com" brand: http://www.endless.com/ http://www.endless.com/ (I don't know how successful it's been.) Amazon would love to grow into every vertical market, but in branding terms many people still think of them as selling books and media, and maybe electronics. Buying a recognized brand is a significant shortcut, especially if that company can benefit in turn from Amazon's technical infrastructure. Full disclosure: I worked for Amazon from 2005 - 2008.
- Harj 17y ago
  i cant imagine Amazon would pay $840m just for zappos' culture and brand
  - jrockway 17y ago
    The actual letter from the CEO mentions that Amazon may be using Zappos' warehouse space, which is "closest" to the UPS Worldport. (Incidentally, Louisville may be UPS' hub, but my Amazon packages arrive fastest when they ship from the Indiana warehouse.)
jrockway 17y ago
Amazon bought zappos because zappos is a top notch shipping, fulfillment, and logistics company. But so is Amazon, and they even already resell this as a service. Honestly, I thought Amazon and Zappos were the same company for a while. They both fulfill orders reliably, they both have good customer service, and their pages look a lot alike. Now they are, so technically I was just predicting the future. (Now to get a blog!)
- alaskamiller 17y ago
  Yeah, I predicted this to happen in some blog comment two years ago. Amazon is great in doing what they do, I think what they would pursue now will be companies like them that are already well represented and branded in a certain segment and niche. Shoes are a good segment and niche. It doesn't spoil so it can be inventoried, it's fashionable so it can garner high markups, and it's compact and not hard to handle. This was a cheap buy to pick up a brand, marketing, warehouses, labor, and management talent. I think a real game changer would be if Amazon bought Newegg.
  - jrockway 17y ago
    What would Newegg add for Amazon? Admittedly, Newegg is the first thing that comes to mind when I want computing hardware (i.e., a motherboard or something), but Amazon apparently has all that stuff too. I just did a search and found that most of what I would need to build a computer is available via Amazon Prime. Hmm, now I want a new computer :)
    - alaskamiller 17y ago
      The massive supplier relationships and pricing information and logistics and the west coast / east coast warehouses / fulfillment centers that rivals Amazon's operations.
  - imajes 17y ago
    Uhm, fashion is one of the hardest things to deal with. Fashion inventory is almost worthless a season or two after it launches. What zappos sells are what are labeled FMCG - fast moving consumer goods. In this instance, you want almost no inventory, but extremely effective supplier partnerships and delivery cycles. What they have is a really engaged consumer community who can help them predict what they might want to buy soon. If they use the metrics efficiently enough, they can stock the really popular lines and get-the-numbers-right on the slower but better margined products. If you could run zappos/amazon scale and drop ship from manufacturer... well - that's the goal. (See timbuk2 et al for more).

imajes 17y ago

actually i would suspect that Amazon partnered with zappos because zappos has a great company culture and brand, and amazon are having problems retaining theirs as they get bigger. I am sure amazon doesn't need help doing supply chain - in fact I am certain there'd be significant savings to have amazon fulfill zappos' orders.

mbrubeck 17y ago
Amazon could definitely use Zappos' brand recognition in the shoes/fashion market. Amazon tried entering that market under its "Endless.com" brand: http://www.endless.com/ http://www.endless.com/ (I don't know how successful it's been.) Amazon would love to grow into every vertical market, but in branding terms many people still think of them as selling books and media, and maybe electronics. Buying a recognized brand is a significant shortcut, especially if that company can benefit in turn from Amazon's technical infrastructure. Full disclosure: I worked for Amazon from 2005 - 2008.
Harj 17y ago
i cant imagine Amazon would pay $840m just for zappos' culture and brand
- jrockway 17y ago
  The actual letter from the CEO mentions that Amazon may be using Zappos' warehouse space, which is "closest" to the UPS Worldport. (Incidentally, Louisville may be UPS' hub, but my Amazon packages arrive fastest when they ship from the Indiana warehouse.)

jrockway 17y ago

Amazon bought zappos because zappos is a top notch shipping, fulfillment, and logistics company. But so is Amazon, and they even already resell this as a service. Honestly, I thought Amazon and Zappos were the same company for a while. They both fulfill orders reliably, they both have good customer service, and their pages look a lot alike. Now they are, so technically I was just predicting the future. (Now to get a blog!)

alaskamiller 17y ago
Yeah, I predicted this to happen in some blog comment two years ago. Amazon is great in doing what they do, I think what they would pursue now will be companies like them that are already well represented and branded in a certain segment and niche. Shoes are a good segment and niche. It doesn't spoil so it can be inventoried, it's fashionable so it can garner high markups, and it's compact and not hard to handle. This was a cheap buy to pick up a brand, marketing, warehouses, labor, and management talent. I think a real game changer would be if Amazon bought Newegg.
- jrockway 17y ago
  What would Newegg add for Amazon? Admittedly, Newegg is the first thing that comes to mind when I want computing hardware (i.e., a motherboard or something), but Amazon apparently has all that stuff too. I just did a search and found that most of what I would need to build a computer is available via Amazon Prime. Hmm, now I want a new computer :)
  - alaskamiller 17y ago
    The massive supplier relationships and pricing information and logistics and the west coast / east coast warehouses / fulfillment centers that rivals Amazon's operations.
- imajes 17y ago
  Uhm, fashion is one of the hardest things to deal with. Fashion inventory is almost worthless a season or two after it launches. What zappos sells are what are labeled FMCG - fast moving consumer goods. In this instance, you want almost no inventory, but extremely effective supplier partnerships and delivery cycles. What they have is a really engaged consumer community who can help them predict what they might want to buy soon. If they use the metrics efficiently enough, they can stock the really popular lines and get-the-numbers-right on the slower but better margined products. If you could run zappos/amazon scale and drop ship from manufacturer... well - that's the goal. (See timbuk2 et al for more).