What Zappos Can Teach Amazon


Question: What can Zappos teach Amazon?

Tony Hsieh:  As a precondition for even exploring the acquisition start... because most Amazon and I guess corporate America in general acquisitions are the plan is to integrate the company being acquired into the parent company and eventually the company becomes... the identity becomes lost. And we said as a precondition we would only consider it if Zappos could remain independent and we would continue to grow our brand, our culture and our way of doing business our way. And they remained true to their word.  From our point of view it’s as if we swapped out our board of directors with a new one. And yes, there is definitely a lot we can learn from each other.  Amazon I think really takes more of a high-tech approach.  We take more of a high-touch human approach. And we’re not I guess trying to necessarily change each other, but we recognize that there is also a lot we can learn from each other, but the way it has worked from our perspective is now it’s as if Amazon is this giant consultant company with lots of resources and knowledge that we can tap into as little or as much as we want to. And we leave it up to each individual department or sub-department to decide how much they want  to do that, so for something like on the warehousing side for example the way we run our warehouse is pretty different from the way Amazon runs their warehouses.  There is a lot of sharing back and forth because there is a lot of learning.  You know there is some areas that they are better at than we are and vice versa on the warehousing side, but then there may be other departments where they just do a quick phone call once a quarter, just check in, and it’s much less interaction. But we really leave it up to each of our department or sub-department owners at Zappos.

Question: Where do you see Amazon and Zappos going?

Tony Hsieh:  Yeah, in terms of, because we are so independent from Amazon I don’t know actually much of what their internal plans are, but I can tell you from Zappos’ perspective.  We started out in footwear and now doing over a billion dollars in gross merchandise sales there, and in the U.S. apparel is four times the size of the footwear market. So in theory at least that should keep us busy until we hit five billion and then I’m sure the footwear category will continue to grow during that time as well, so we’ve got plenty of work cut out for us for at least the next several years just focusing on expanding into clothing.

Question: Are you still in charge of Zappos?

Tony Hsieh:  Yeah, I am still CEO of Zappos and have no plans to leave and actually it’s interesting because we actually structured the deal so it was not like most normal deals.  Most deals I guess whether it’s Amazon or another company they have a retention pool or bonus that they give to the top 5 or 10 executives, in order to keep people in the company. But for me personally I actually asked not to participate in the pool and we actually spread the bonuses amongst all our employees and my salary prior to the acquisition was $36,000 a year and it still is now, so and that’s is the only... So there is really nothing keeping me at Zappos except for making sure that I’m happy. So in a weird way that actually gives me more leverage over Amazon in terms of they have to worry about making me happy because I don’t have any golden handcuffs or anything and what makes me happy is feeling like we have our independence, can make our decisions at Zappos.

Recorded September 24th, 2010
Interviewed by Peter Hopkins

Hsieh says Zappos can teach its new parent company, Amazon, a thing or two about the importance of a "high-touch, human approach" in business.

A dark matter hurricane is crashing into Earth

Giving our solar system a "slap in the face"

Surprising Science
  • A stream of galactic debris is hurtling at us, pulling dark matter along with it
  • It's traveling so quickly it's been described as a hurricane of dark matter
  • Scientists are excited to set their particle detectors at the onslffaught
Keep reading Show less

Are we all multiple personalities of universal consciousness?

Bernardo Kastrup proposes a new ontology he calls “idealism” built on panpsychism, the idea that everything in the universe contains consciousness. He solves problems with this philosophy by adding a new suggestion: The universal mind has dissociative identity disorder.

We’re all one mind in "idealism." (Credit: Alex Grey)
Mind & Brain

There’s a reason they call it the “hard problem.” Consciousness: Where is it? What is it? No one single perspective seems to be able to answer all the questions we have about consciousness. Now Bernardo Kastrup thinks he’s found one. He calls his ontology idealism, and according to idealism, all of us and all we perceive are manifestations of something very much like a cosmic-scale dissociative identity disorder (DID). He suggests there’s an all-encompassing universe-wide consciousness, it has multiple personalities, and we’re them.

Keep reading Show less

California wildfires death toll climbs to 50

Firefighters in California are still struggling to contain several wildfires nearly one week after they broke out.

(Photo by Elijah Nouvelage/Getty Images)
Politics & Current Affairs
  • Hundreds of people are still missing after three wildfires spread across Northern and Southern California last week.
  • 48 of the 50 deaths occurred after the Camp Fire blazed through the town of Paradise, north of Sacramento.
  • On Tuesday night, a fourth wildfire broke out, though it's mostly contained.
Keep reading Show less