Zappos
Daniels Fund Ethics Initiative
University of New Mexico http://danielsethics.mgt.unm.edu Zappos: Delivering Happiness to
Stakeholders
INTRODUCTION
Can a company focused on happiness be successful? Zappos, an online retailer, is proving that it can.
The company’s revenue grew from $1.6 million in 2000 to $1.64 billion in 2010. Tony Hsieh,
Zappos’ CEO says, “It’s a brand about happiness, whether to customers or employees or even vendors.” Zappos’ zany corporate culture and focus on customer satisfaction has made it both successful and a model for other companies.
This case examines how Zappos’ focus on stakeholder happiness has contributed to its success.
First, we examine the history of Zappos, its core values, and its unique business model. Next, we analyze the company’s corporate culture and how it influences its relationships with employees, customers, the environment, and communities. We then look at some of the challenges the company has faced and how it plans to move into the future.
HISTORY
Nick Swinmurn founded Zappos in 1999 after a fruitless day spent shopping for shoes in San
Francisco. After looking online, Swinmurn decided to quit his job and start a shoe website that offered the best selection and best service. Originally called ShoeSite.com, the company started as a middleman, transferring orders between customers and suppliers but not holding any inventory (a
“drop ship” strategy). The website was soon renamed Zappos, after the Spanish word for shoes
(zapatos).
In 2000, entrepreneur Tony Hsieh became the company’s CEO. Hsieh, 26 at the time, was an early investor in Zappos, having made $265 million selling his startup company to Microsoft in 1998.
Hsieh wasn’t initially sold on the idea of an Internet shoe store. He told Inc. magazine, “It sounded like the poster child of bad Internet ideas…but I got sucked in.” After becoming CEO, Hsieh made an unconventional decision to keep Zappos going,
University of New Mexico http://danielsethics.mgt.unm.edu Zappos: Delivering Happiness to
Stakeholders
INTRODUCTION
Can a company focused on happiness be successful? Zappos, an online retailer, is proving that it can.
The company’s revenue grew from $1.6 million in 2000 to $1.64 billion in 2010. Tony Hsieh,
Zappos’ CEO says, “It’s a brand about happiness, whether to customers or employees or even vendors.” Zappos’ zany corporate culture and focus on customer satisfaction has made it both successful and a model for other companies.
This case examines how Zappos’ focus on stakeholder happiness has contributed to its success.
First, we examine the history of Zappos, its core values, and its unique business model. Next, we analyze the company’s corporate culture and how it influences its relationships with employees, customers, the environment, and communities. We then look at some of the challenges the company has faced and how it plans to move into the future.
HISTORY
Nick Swinmurn founded Zappos in 1999 after a fruitless day spent shopping for shoes in San
Francisco. After looking online, Swinmurn decided to quit his job and start a shoe website that offered the best selection and best service. Originally called ShoeSite.com, the company started as a middleman, transferring orders between customers and suppliers but not holding any inventory (a
“drop ship” strategy). The website was soon renamed Zappos, after the Spanish word for shoes
(zapatos).
In 2000, entrepreneur Tony Hsieh became the company’s CEO. Hsieh, 26 at the time, was an early investor in Zappos, having made $265 million selling his startup company to Microsoft in 1998.
Hsieh wasn’t initially sold on the idea of an Internet shoe store. He told Inc. magazine, “It sounded like the poster child of bad Internet ideas…but I got sucked in.” After becoming CEO, Hsieh made an unconventional decision to keep Zappos going,