Zappos Sells More By Encouraging Returns

from the outrunning-the-competition dept

Although it may not get that much hype, Zappos has built up an impressive and successful online shoe retailer. While shipping costs are often the bane of online retailers, Zappos has thrived, not only by offering free shipping, but by offering free return shipping as welll (via Knowledge Problem). Obviously, shipping is expensive, but by subsidizing product returns, the company has removed the risk of buying shoes online. Customers don't have to worry about a pair of shoes not fitting right, because they can always send them back at no cost. In fact, the company approves of customers that buy multiple pairs, just to see which pair fits, while sending the others back. Of course this cuts into its margins to some extent, but the alternative is for customers to buy shoes at traditional stores. The basic lesson is one that plenty of retailers recognize: making it easier to return items will make customers more comfortable with purchasing them. But it's the application of this lesson online, to such an extreme degree, that has separated Zappos from the pack.

Filed Under: ecommerce
Companies: zappos

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  1. identicon
    Poacher, 23 Jul 2007 @ 8:34pm

    Most shoes are made in China

    Almost all shoes are made in China. Having been to several factories myself the misconception is that this isn't a huge source of employment and opportunity for the Chinese. The country is severely depressed and manufacturing is the only way the working class can get ahead. Most shoe companies are damn sure the factories they work with are compliant with labor and pollution regulations - we all saw what happened to Nike. 99% of all athletic shoes - such as Nike, Adidas, Converse, Reebok, etc. are made there. New Balance has a small factory in Massachussettes - but it is all for show and they make a fraction of a % of their shoes there - maybe 2 styles. Unless you are buying higher end Italian shoes, you are probably wearing product made in China.

    As for Zappos - they are making the online customer expectations higher. Thus pressuring other retailers to make their policies more customer friendly to compete. Changing the landscape really - for the better of all of us. Gone are the days of a website not listing its customer service phone # if they want to be legit. Zappos is setting the bar indeed not to mention their selection is literally the best in the world see for youself if you dont believe me. I am size 13 and can choose from thousands of shoes. Many stores don't even carry that size and it used to waste hours of my time tracking a pair down that fit at normal retail.

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