This article is an excerpt from the Shortform book guide to "The Everything Store" by Brad Stone. Shortform has the world's best summaries and analyses of books you should be reading.
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Why did Amazon want to buy Zappos? To what length did Amazon go to get what they wanted? Why did Zappos finally decide to sell to Amazon?
In 2005, Zappos was well-known for its online, shoe selling business and Amazon wanted a part of it. Zappos wanted to remain independent but when Amazon sets its sights on an acquisition they always get what they want.
Continue reading to learn all about the war between Amazon and Zappos.
Amazon vs. Zappos
August 2005: Amazon and Zappos meet up and execs (Tony Hsieh, Alfred Lin, Michael Moritz, Nick Swinmurn) announce the intention of acquiring Zappos.
- Zappos has become synonymous with buying footwear online. It boasts sales growing from $8.6 million in 2001 to $70 million in 2003 and $370 million in 2005.
- Amazon has not done this well in footwear. Zappos has built strong relationships with brands like Nike, which fear Amazon for being a discounter and brand destroyer. Amazon’s website also is not suited for listing variations among a single good – it lists different colors, sizes, and widths all as separate items with separate web pages.
- The cultures between the two companies are somewhat similar.
- Zappos is obsessive about customer experience, promising free 5-7 day delivery and trying to meet 2-day delivery. Customers can return items up to a year after the purchase. Customer center calls can take as long as needed, and customers sometimes enjoy hours-long calls.
- Hsieh believes that everyone should take below-market compensation to work at Zappos because of the great internal culture.
- Amazon execs believe Zappos could be acquired for $500 million, but Bezos imagines paying just a fraction of this.
- Zappos desires to remain independent. Bezos goes to war, building Endless.com as a separate site dedicated to shoes and handbags.
- This is the same time Amazon is spending heavily on the Kindle and AWS, so the board is wary of Amazon spreading itself thin and overspending.
- Amazon CFO: “How much money do you want to spend on this?” Bezos: “How much do you have?”
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Like what you just read? Read the rest of the world's best book summary and analysis of Brad Stone's "The Everything Store" at Shortform .
Here's what you'll find in our full The Everything Store summary :
- How Amazon went from an online bookstore to the largest internet retailer in the world
- What Jeff Bezos did to compete with companies like eBay, Zappos, and Diapers.com
- What it was like to work for Jeff Bezos
