THE $800 MILLION MAN

Tony Hsieh went from owning a single pair of soles to running the Vegas-based footwear giant Zappos.com, with a staggering 200,000 styles and nearly a billion in sales this year alone. But for the 33-year-old CEO, that's only the beginning

By Jacquelynn D. Powers, Photographs: Francis & Francis

or most of his life, Zappos.com CEO Tony Hsieh owned one pair of shoes. When they wore out, he would replace them in a very utilitarian manner. In fact, shoes were the last thing on his mind as the Harvard graduate was busy making his fortune during the dotcom boom in the '90s.

Even as an initial investor in the foot-obsessed website, Hsieh's sartorial sense was nonexistent. However, in 2000, the young entrepreneur joined the burgeoning e-commerce company and finally started taking an active interest in footwear. Since then, Zappos' finances have soared (they will hit $800 million in sales in 2007) and Tony's shoe collection has similarly increased. While he's no Imelda Marcos, this Silicone Valley vet is now sporting some stylish soles.

While it may seem that shoes are among the most difficult on-line purchases, Zappos' business model actually makes it effortless for customers to procure footwear-- from sneakers to boots--via several customer-service initiatives.

"It's all about bringing the shoes to you and trying them on in the comfort of your living room," Tony, 33, explains. "At Zappos, we provide free overnight shipping. And we pay for the return shipping, so you can easily send back anything you don't like. Female customers clearly like the fact that they can order 10 pairs of shoes, try them on at home with 10 different outfits, which you can't do in a department store, and then return the ones that don't fit."

Impressively, patrons have 365 days to return merchandise, provided it is in pristine condition. "For us, it's about making constant improvements to the customer experience--whether that's on the website itself or in the delivery process," says the Southern Highlands resident. "We think of our website like Netflix. Their service is sending movies back and forth. Our service is sending shoes back and forth. If you go to a shoe store, the associate goes to the back room and brings out three or four pairs of shoes. Most of the time, you don't buy all of them and they are returned to the back room. We are simulating that interaction, but in the comfort of your living room."

This emphasis on customer service extends to every element of the company's business. "We call it our 'wow philosophy,' " Hsieh notes. "We want to go above and beyond for our customer interaction. If you've tried shopping on other websites, it's hard to find their customer-service phone number. It's usually buried 10 pages deep. Whereas for us, it's on every single page of our site. We want customers to contact us. Customers contact us for many reasons: They could have a wedding this weekend and want some advice on what to shop for. Sometimes customers are looking for a very specific pair of shoes. If we don't have it in stock, we actually train all of our customer-service representatives to search competitor websites and direct the customer to that competitor. Our service philosophy isn't about trying to close every transaction."

Because the call center is so germane to Zappos' success, the corporation relocated from San Francisco to Las Vegas in 2004, and 70 out of 90 employees made the leap with them. "It was very hard to find people who wanted to do customer service as a career in San Francisco," Tony says. "For most people there, it was considered a temp job. Plus, the cost of living was so high in the Bay Area, whereas Vegas was cheaper." Currently, 700 people work in their Vegas headquarters in Henderson--including Tony's two younger brothers--and everyone is incredibly knowledgeable about sneakers and sandals.

Their company culture includes monthly events like Zappos Idol, where the staff sings karaoke in the lunchroom. There are also parades streaming through the office, including one for Oktoberfest, where the CEO dressed in drag and passed out pretzels and root beer. "Those pictures are making their way across the Internet," he jokes ...

For the full story, Subscribe to Vegas Magazine now!


A member of the Greenspun Media Group, publishers of:
Celebrity Week  |  Home & Design  |  In Business  |  Las Vegas Life  |  Las Vegas SUN
Las Vegas Weekly  |  Ralston/Flash  |  Las Vegas Magazine  |  Vegas Golfer  |  VEGAS Magazine

Use of this Web site constitutes acceptance of the vegasmagazine.com Terms of Use and Privacy Policy.
Advertise: On vegasmagazine.com.
Work for Greenspun Media Group. All contents @ 1998 - 2008 Vegas Magazine