Have I ever told you the tragedy of http://Zappos.com ?

I think I heard this on a podcast somewhere or YouTube vid and parts of it might be apocryphal...

Zappos was a shoe retailer doing about a billion in sales, and given Their focused specialty niche (footwear) Amazon took an interest and made overtures to acquire (buy control) of the startup. Zappos cherished their unique and quirky company culture&wanted to remain independent

The prevailing wisdom at the time was that no one could succeed selling certain apparel items online because “everyone wants to try things on before buying” and there was no category where that was more apparent than in footwear.

shoes above all else have the most fit issues

Length, width, arch support, heel support or friction, tie wiggle room, do they stretch to fit eventually or are the true size etc...

It seemed like a long shot to even try, but Zappos with their unlimited return policy & free shipping (even on returns) inspired people to change

Their purchasing behavior and “gamble” on buying shoes to try on (returning the ones that didn’t fit, or didn’t like )

Given Amazon’s resolve to lead every e-commerce category this approach taken by Zappos was something Jeff Bezos was willing to bring into the fold, even if

just to understand the magic ( https://www.geekwire.com/2014/jeff-bezos-octopus-breakfast/)

So amazon made an offer, and Zappos said no. End of story.

Actually.. no was not an acceptable answer to JB. Now I don’t have the reference to back it up but sources say he launched into full song and dance...

the song went something like this:

Hellfire
Dark fire
Now Zappos, it’s your turn
Choose me or
Your pyre
Be mine or you will burn

(Actually photo of @JeffBezos from this time)

So instead of competing with Zappos directly via Amazon, bezos launches a new website, http://endless.com 

Now why you might ask? Why would amazon not leverage their incredible brand name recognition and site traffic?

you see Jeff Bezos was the original 200iq 4D chess Andy

Endless was a much smaller site with less traffic and seemingly no optical support from mothership amazon.

They immediately set out to sell shoes, matching Zappos’ unlimited returns and free shipping even on returns, spending a little on google ads, and then, most critically,

Endless lowered their prices below Zappos’s already low prices. There was some back and forth price war action but essentially even when both Zappos and Endless lowered their prices to the point of unprofitability... Endless went lower yet. And lower.

And lower.

Then Zappos executives realized what was going on.

Endless had put them in a no-win scenario. Endless would keep lowering prices until they won over most of Zappos customers. And until they point happened if Zappos tried to match price with endless... Zappos would lose

more $ than endless was losing (b/c more traffic was a disadvantage in this scenario). Also I just realized I told this story badly because Zappos policy also price matched any site (so even if they didn’t lower their prices to Endless’ level the price matching was killing them

Endless twisted the dagger a little further by running ads highlighting their lower prices (further inducing more price matching)

And that’s why amazon opted not to compete via their main site. If amazon had, they would be in Zappos shoes’ given that amazon had more traffic than Zappos they would have lost more money lowering prices below cost than Zappos was losing.

More traffic& customers was a liability in this battle.

By using a new site Endless that had no optical ties to amazon, JB ensured that either one of two things would happen

1.) Zappos eventually goes bankrupt price matching

2.) endless eventually gains a market share lead

Seeing the writing on the wall, Zappos folded and sold to Amazon

Today Zappos is an independently operated subsidiary of http://Amazon.com 

THATS ALL FOLKS

Pls RT the original thread if you liked it or learned something!!