Happiness a path to profits hsieh tony

help us, they’d benefit as well.

Not too long after I proposed the idea to Tony, he spun back around and said, “Were you thinking about something like this?” He created the beginning of what we now refer to as “the extranet.” It does exactly what we had discussed. It allows the vendors complete visibility into our business. They’re able to see inventory levels, sales, and profitability. They can write suggested orders for our buyers to approve. They can communicate with our creative team and make changes to their brand boutiques on the site. In effect, they’re given the keys to the shop.

Why do we do this? The average buyer at Zappos has a portfolio of fifty brands, but because of transparency, there’s an additional fifty pairs of eyes helping run the business too. Not only that, vendors are the experts at what they do. No one buyer knows a brand better than the brand’s own representative. So why not leverage their knowledge to help us run a better business?

As a result, when they feel empowered to manage their own business using the tools and accessibility we provide, they’ll spend more hours helping us than their typical account. The success of our team can be attributed to our buyers and vendor partners, together.

Negotiations at Zappos are a bit different as well.

Instead of pounding the vendors, we collaborate. If we’re looking for longer payment terms, we’ll present different sales plans based on the days-of-payment terms. We decide together what makes the most sense for the business, the amount of risk we want to sign up for, and how quickly we want the business to grow. We approach marketing from a similar standpoint as well. We collaborate on what both of our brands are trying to achieve and what it will take us to get there. We don’t believe that negotiations need to be an arm-wrestling match. If both parties are honest about our positions and objectives, we should be able to find an equitable way to get there.

We know there’s no way we could’ve achieved our success as a company without our vendors’ commitment and passion, so every year, we like to show a little gratitude. We take over a venue such as the Hard Rock Hotel pool or Rain Nightclub at the Palms and invite all of our vendors (over one thousand) to our annual Vendor Appreciation Party.

Between our vendors and the Zappos team, we have over three-thousand people on hand.

We time it around the World Shoe Association convention and love it when people tell us it’s the highlight of the show.

We cater food, beverages, and wildly interesting entertainment (goats in tutus, dancers, little people, fire eaters… you name it, we’ve probably had it!) with the hope they realize how much they mean to our company. The first year we did it, the vendor