Zappos.com once closed a door to reduce the profit of 25%, but the rapid development, and eventually was Amazon.com for more than $1 billion price acquisition.
Zappos.com, like many Internet companies, released in 1999 when the technology bubble. Zappos.com sells shoes on the web, the customer selects the shoe styles on the website, the Zappos.com sends the customer requirements to the supplier, and the supplier sends the goods from their own warehouse.
CEO Tony Hsieh said, "in theory, it’s a perfect idea." But the reality is not, after the company was founded four years still no profit, unable to get VCs favor, and shoes retail market just from 2001 recession. In order to survive, the company must explore more valuable products: quality customer service, unless it is shipped to customers or it will not be achieved, which means that they have to build their own logistics system.
Zappos in order to ensure good customer service, any shoes that are not made of their own are forced down the shelf, which makes its sales decreased by 1/4. Though we closed a door, we lost 25% of our profits. Hsieh said: "I bet it will make the company better."
he succeeded, merchandise sales reached $2 billion, the quality of customer service to bring more repeat customers, these repeat customers also recommend Zappos.com. November 2009, Amazon.com to $1 billion 200 million acquisition of Zappos.com, Zappos.com painted a perfect stop.
article source: FASTCOMPANY