Zappos Essay

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1. Introduction Zappos was founded by Nick Swinmurn in 1999. The initial inspiration came when he couldn’t find a pair of brown Airwalks at his local mall. That same year, Swinmurn approached Tony Hsieh and Alfred Lin with the idea of selling shoes online. At that time "footwear in the US is a 40 billion dollar market and 5% of that is already being sold by paper mail order catalogs," Hsieh and Lin decided to invest $500,000 through their investment firm Venture Frogs. The company was officially launched in June 1999, under the original domain name "". A few months after their launch, the company changed their name from ShoeSite to Zappos (a variation of "zapatos," the Spanish word for "shoes") not to limit themselves to selling only footwear. After minimal gross sales in 1999, Zappos revenue in 2000 was $1.6 million. In 2001, Zappos more than quadrupled their yearly sales, bringing in $8.6 million. In 2002, they opened their own fulfillment center in Kentucky. In 2003, Zappos reached $70 million in growth. In 2004, Zappos did $184 million in gross sales. Over the next three years, Zappos doubled their annual revenues, hitting $840 million in gross sales by 2007. In 2008, Zappos hit $1 billion in annual sales, two years earlier than expected (one year later, they fulfilled their other long-term goal, debuting at #23 on Fortune’s Top 100 Companies to Work For). Zappos’ primary selling base is shoes, which accounts for about 80% of its business. About 50,000 varieties of shoes are sold in the Zappos store, from brands like Nike, Ugg boots, and Steve Madden heels. They also serve the niche shoe markets, including narrow and wide widths, hard-to-find sizes, American-made shoes, and vegan shoes. In 2004, they launched a second line of high-end shoes called Zappos Couture. In 2007, Zappos expanded their inventory to include clothing (including petite,

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