Zappos CEO Bares His "Sole" and Shares His Lessons
Thursday, August 9th, 2007
I always think it’s better to learn from the mistakes of others, than to make the mistakes yourself (unless you’re one of those people that really need that first-hand experience to learn something). With that in mind, I thought I would pass along a link to a great write-up by Melissa Dowling available at Multichannel Merchant of some tips recently passed along by Tony Hsieh of Zappos. The top-tier shoe site CEO shared his top 10 lessons from eight years in business during a recent presentation at the eTail 2007 conference.
Lessons include:
- viewing customer service not as a cost center but a profit center
- the value of returning customers to your business
- the impact of word of mouth advertising
You may already know some of these lessons, but at the very least it’s nice to see how successful e-tailers view their business (and that they worked through the same issues you may now be facing). Read the full write-up.
Paul Boisvert
Yahoo! Small Business
Comments
Hi Lars,
Yes–some good insights that were worth sharing.
I think your comment ties back to his last point about ignoring the “experts” because no one knows your customers (hopefully) as well as you do.
In the same respect, no one knows the reality of your business like you do. Would your customers order more frequently, or purchase more per order, if you could offer similar shipping rates? If so, then it may make sense. However, this is one of the “big bets”. Get it right and you have explosive growth. Get it wrong and your business may implode under the extra costs. For shoes, with relatively low flat shipping, and with a historical order and return rate upon which to base assumptions, it may be a great tactic. For heavier reel mowers or similar, perhaps not.
Maybe test the waters with some light-weight products first and see what it does to the numbers. But you do need to be able to track over a longer business cycle to understand if it is viable. Higher repeat visits where you are not paying CPC costs, could help off-set the shipping costs so you need to view the overall impact across multiple variables.
Paul
Comment by Administrator — August 10, 2007 @ 6:40 pm
Thanks for that link!
I had not seen that article, and I think it is really enlightening.
I was just talking to someone yesterday about Zappos, and how I think they are crazy to offer free overnight shipping. I said that they should offer it for $5 extra instead, and they could still have an amazing deal and lower their shipping costs significantly.
But I obviously don’t know what I’m talking about, because his sales numbers and sales growth proves that he’s onto something!
We get killed on shipping, which just goes up and up and up every year.
With our larger items, it isn’t possible to offer free shipping without significantly increasing the price, and that seems like cheating to me. So we just try to keep our shipping costs as reasonable as possible.
I love the part about not being secretive, and ignoring competitors to focus on their customers instead. If you’re growing that fast, who cares what your competitors are doing, right?
Comment by Clean Air Gardening — August 10, 2007 @ 6:24 pm