Amazon paid 35-40x EBITDA, compared to their valuation of 25x CY09; Be sure to read Tony Hsieh’s letter to employees here. 1. Amazon.com to Acquire Zappos.com . But in practice, it wasn’t. Four years after its launch, Zappos.com wasn’t profitable, it couldn’t raise funding, and retail shoe sales nationwide were only just recovering from the 2001 recession. This is Amazon’s largest acquisition ($850m-900m) – it is mostly stock and some cash ($40m) Scuttlebutt is that Zappos felt Amazon’s stock is undervalued so wanted mostly stock to get some upside in the deal. It will make for an overall stronger company. According to the text, this is the triple bottom line, which suggests companies first management if traditional profit/loss, second the management of the company’s social responsibility, and finally the management of its environmental responsibility (Wheelen T., 2015, p.10). Though it started as an online bookstore, its success in its venture spurred it to diversify into selling anything that can be sold online. Overnight, Zappos stopped selling any shoe that it didn’t ship itself, ditching a quarter of its business. In recognizing their rapid success, Zappos credits it to their commitment to the customer, stating,Abstract Amazon is the world’s largest online retailer and is indeed a pioneer in the online retailing space. Amazon has a great distribution system next to Zappos’ really good system. Exhibit 99.1 . Instead, “It was about what [we wanted] Zappos to stand for and mean in the long-term.”“On paper, it was a great idea,” CEO Tony Hsieh says. [1]The goal of Zappos was to meet the demands of customers by offering great selections in sizes, brands and colors. The company was founded in 1999 by Nick Swinmurn and launched under the domain name Shoesite.com.
In meeting the demands of its customers by ensuring that all aspects of the company, including culture, customerNguyen Quoc KhanhBUS 103 Case 3: Amazon: One E- Store to Rule Them All.1. Whatevidence is presented inthe absolute best service online -- not just in shoes, but in any category” (Zappos, 2014). Seems like a match made in heaven. CASE STUDY ON AMAZON ACQUISITION OF ZAPPOS SUMMARY In November 2009, Amazon finished the securing of Zappos.com, in an arrangement worth around $1.2 billion.
Zappos.com, Inc. is a leader in online apparel and footwear sales that strives to provide shoppers with the best possible service and selection. A few months later, Swinmurn quit his job and started Zappos.com, an online store that carried the latest shoe styles, brands and colors. SEATTLE--(BUSINESS WIRE)--Nov. 2, 2009-- Amazon.com, Inc. (NASDAQ:AMZN) today announced the completion of its acquisition of Zappos.com. Over the past decade, Zappos has evolved to become one of the leading online clothing retailers centered on providing superior customer service. They were hiring5- EveryoneAmazon is always looking for a new opportunity, that’s why it just keeps on growing and growing and growing. She has written for Bloomberg News, the Financial Times and the business sections of the Washington Post and the Christian Science MonitorBy 2003, 75% of sales came from its warehouse’s stock.