Why Did Amazon Buy Zappos for $940 Million? A Case Study for Entrepreneurs

Why Did Amazon Buy Zappos for $940 Million? A Case Study for Entrepreneurs by The Biz Doc Tom Ellsworth.
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Zappos.com is an online shoe and clothing shop based in Las Vegas, Nevada. In July 2009, the company announced that Amazon.com would acquire it in an all-stock deal worth about $1.2 billion.
Case Studies with The Biz Doc Tom Ellsworth on Valuetainment - MLB Advanced Media - The Billion Dollar Media Company You've Never Heard Of
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This channel is becoming golden, keep up Valuetainment !!!

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Thank you sir! - Thanks Tom

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Agreed Maurits...one of the best on the KZbin platform. So true to its name of providing excellent value.

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except for that laughable "get rich" life coach....biz doc needs his own channel

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15 Minuteeee Manifestation Review?-?Honest Reviewwww By User > t.co/MllyLfDE4E?Bk_hjVrcIdg

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Moral of the story: customers first

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YUP! Thanks - Tom

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Gibran Saliba Too bad Circuit City forgot that

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You are the backbone of this channel. Your case studies are the best on YT, detailed and to the point. Being a good presenter also helps. I am a die hard entrepreneur since childhood. Just learning more and more about getting investment money. Its the real way to take off and grow. You can never learn enough in the business world.

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I sincerely appreciate those comments. I think there is a lot of good content here as well. Thanks - Tom

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I am an 18-year-old wannapreneur, this channel is great, I discovered it today :-)

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Im here only for Tom Ellsworth. I love his style of Videos they are so simple. Like a story he is telling. Bring him more please.

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We love him too. Pat

[@matan9151]

Tom, your case studies are brilliant ! every entrepreneur should watch and learn this . i think it could be very interesting to see case studies about "Mobike" the Chinese giant that just been sold for $2.7B , and another one will be the dollar shave club . thanks !

[@aroberts3213]

at this rate Amazon will own Ebay

[@saintshaggy1372]

Zachary Taylor yeah with what seems like eBay crunching down on the profit margin.. I think Amazon will beat it to the finish line... Amazon's a beast

[@kakerake6018]

Fit4EPICness a beast among beasts

[@VALUETAINMENT]

Possibly! Thanks - Tom

[@Pernection]

Bruce Bruce 420 That shirt

[@Pernection]

Zachary Taylor Can't let that happen

[@michaeliphigenie2155]

Some channel have online courses and charge a lot of money for those kind of business advice. Thank you.

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That’s why we are here! Thanks - Tom

[@abcde12345edcba]

Thanks Tom! Always love your case studies and the way you explain them. So much enthusiasm!

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Appreciate you!! Thanks - Tom

[@mitchell.9632]

Just as I was getting used to interviews every other week. Though case studies are your roots for this part of the channel. Thanks again for taking MLBAM.

[@VALUETAINMENT]

Hi Mitchell - MLBAM was fun. Thanks - Tom

[@don10160]

One of the most valuable videos I have watched recently! Thanks for your inspirational information!

[@AndiSelaj]

I love these Biz Doc videos! Keep it up Valuetainment!

[@VALUETAINMENT]

See you every Friday. Thank you so much - Tom

[@joelow63]

Zappos(shoes) Maintain company culture so pay people to quit if they don't like it Stand out by being different price and service Go above and beyond Have employees think like an owner To change culture It starts from the top Ex service 1is it authentic service 2are employees empowered to act in way of culture■ 3consistent folter people hired

[@BlkDiesel]

Another great case study Tom Ellsworth. I look forward to your case studies weekly. Great stuff.

[@VALUETAINMENT]

I appreciate the kind words and support. See you again next week. Thanks - Tom

[@savorthepassion]

Another great one! I absolutely love that the first concern was keeping the culture. I know I'm thinking too far ahead but I often think about that myself. If and when someone approaches me to buy Digest The Passion I just don't know. The culture is so important that would crush me to have that lost regardless of how much I make on the deal. Also great idea for pay to quit. I might utilize that myself. Great idea to incentivise people to leave if they know it's the wrong fit. Finally empowering the staff to take care of guests I feel is paramount. Even in my days as a server if I felt like a child deserved a treat (with parent permission of course) or that a guess deserved some further compensation or even just a tha is for your first visit I always did it no questions asked. I was always willing to pay for it myself if necesarry because I knew that action would be enough to bring them back and nothing gets a young child to behave better for their parents than reinforcing their good behavior with an unexpected dessert.

[@VALUETAINMENT]

That is an excellent breakdown. I very much appreciate that you took the time to share your thoughts like that. Thanks - Tom

[@PresidentialWinner]

This man is funny and great, and that is why i subbed to this channel and watch every case study you have made

[@samkamath5826]

Hey valuetainment Amazing work keep up with the good work

[@anandatheertansrinivasan49]

Awesome thanks ... your service and content delivery is Zappy!

[@henri9485]

Very nice and valuable video. Great work, thank you.

[@ibarramanuel66]

Great job!! I am learning so much!! ! Thank you have a great weekend.

[@VALUETAINMENT]

Hi Manuel - It’s always great to see you. Thanks - Tom

[@bmker5469]

This guy knows his stuff.. he should be on millions of subs. Very informative.. loved the shirts. Big F1 fan..

[@octoratorocktwistedsisterl9055]

Thank you!! It is a great case. I learn a lot from you, and every time i have new tools to improve my business. You are amazing!

[@VALUETAINMENT]

I appreciate that very much!!! Thanks - Tom

[@letyjay9715]

quit bonus is an amazing idea. wish my previous employer had that lol seriously Zappos case study is amazing.$ 0-$940 million in ten years. great work.

[@FinancialInformation]

Another excellent case study Tom!

[@VALUETAINMENT]

Thank you!! Tom

[@indraneelpatil9168]

Great case study Tom and new learning on how to bundle commodity with great service.

[@VALUETAINMENT]

I appreciate the kind words! - Thanks Tom

[@meade750]

Yes! another awesome case study, nice one Tom!

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I appreciate that. Thanks - Tom

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Very soon Valuetainment will become a complete business university, there would be no need for college😂😂😂

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It’s heading in that direction. Thanks - Tom

[@youngPC]

Head hair says 30 while facial hair says 65.

[@VALUETAINMENT]

Hmm... maybe need to touch up beard!! Thanks - Tom

[@youngPC]

Just teasing, great content as usual!

[@kogure7235]

We have a great store like that here in the Netherlands. Maybe they are in other EU countries as well. Zalando, they sell shoes and clothes. The easiest return process I have ever seen. They include a printed sticky shipping label for returns, and their boxes are resealable. Such a great and reliable service. Even people who already make returns relatively easy pale in comparison. And that's how you get a lot of customers. People will be a lot more likely to buy if they know they can trust you with their money. I'm sure their customer service is great, but I never even had to use it. That's how automated their return process is.

[@VALUETAINMENT]

Thanks a great story - thanks for adding to the dialogue! Thanks -Tom

[@momoalshi3225]

Just wanted to say I watch you guys every meal of my day. Just wanted to get it out of the way

[@VALUETAINMENT]

Just want to say we appreciate you very much and will keep striving to deliver great content! Thanks - Tom

[@letechpreneur6767]

Great and energetic presentation like always.I never miss your show Tom.

[@VALUETAINMENT]

Appreciate that very much! Thanks- Tom

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Love these Case Studies!

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Appreciate it! Thanks - Tom

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The likes/dislikes ratio on every video on this channel says enough about the value you guys bring to us. Thanks, Tom!

[@VALUETAINMENT]

Thank you for noticing - I appreciate that. Thanks, Tom

[@aitzazayub5112]

I really like your way of sharing information. And I also loves your energetic body language.

[@punchface3000]

amazing vid, thank you so much

[@VALUETAINMENT]

I do my best every Friday for loyal viewers such as you. Thanks - Tom

[@bruperina]

Can’t cease to thank you, Tom.

[@VALUETAINMENT]

I thank you for watching, and I won’t cease to thank you. Thanks - Tom

[@bruperina]

Miss Beer and Business, Tom!

[@freshfast6197]

11:30 self empowered employee at Zappos story 15:09 Authentic : Self-Reflection Empowered : Without Consequences 15:47 Consistent : Filter/Select

[@jason3619]

Could you do a case study on a company in the healthcare industry? Great info! Thanks

[@bluestarrevenue7598]

I never knew amazon bought zappos.... I hope Im not the only one

[@InvestingHustler]

Amazon buys anything and everything if it creates even a tiny bit of competition.

[@mohitpunjabi4978]

It aint just about money... They are soo fcking visionories.. Amazon is building a gaint empire a legacy that aint going anywhere! :p

[@vedantsohoni7219]

Thanks a lot.

[@tumkanapon1416]

Damm, really like your content.

[@rudrapadhy9175]

6:18 really smart move

[@chrisfortunato4415]

Love your videos!

[@kakerake6018]

How do I never see these companies

[@taoist32]

Hydrogen Peroxide You have never heard of Zappos?

[@VALUETAINMENT]

Too much peroxide? Thanks - Tom

[@kakerake6018]

taoist40 nope never and the same goes for 90% of the case studies

[@Pernection]

zztop3000 Then we must stop generation Z

[@gerardo.galvan]

zztop3000 but they’re cheaper... sometimes 50% off

[@rickmatsokotere2251]

RIP Tony Hsieh

[@GalaxieFord-oz8jk]

Great video!!!!!

[@Meowmeow.age.6]

Moved to Nevada? Pay less taxes and get better labor? Wow UNBELIEVABLE.

[@moses_chandramouli]

Can u make a case study on entire cab aggregating business in world controlled by soft bank

[@VALUETAINMENT]

It is beginning to look that way... Thanks - Tom

[@pranavnaresh4675]

Mr. Chand you can watch the video titled "What stopped Uber from world domination" from the channel "Curious Elephant"

[@foxxrider250r]

The conference would be awesome. I would definitely come.

[@VALUETAINMENT]

Let’s get it up to 1 million! Thanks - Tom

[@abhimat]

Key takeaways are: "pay to quit" and "extreme ownership" (vis-à-vis the employees).

[@VALUETAINMENT]

Foundations of Zappos! Thanks - Tom

[@TheDezminator]

So many to take away from this. The exceptional team building they started early on, where now corporations go back to team building to boost employee moral and productivity. Plus to "quit bonus" to accentuate the sentiment of control the employees have over their situation: "If I don't feel comfortable I can quit and get paid on my way out", that is an advanced psychological trick. The quality of service they always keep at the initial level. "Always under promise and over deliver". And the preservation of the spirit of the company after the buy back, not abandoning the team and seeing that the company values persist even after a transfer of ownership. I think Amazon is using the Zappos trustworthiness, to secure their image on the market, especially when Ebay and Ali Baba are such scam nests. People are still cautious about ordering online, a company with the reputation of Zappos joining the team only strengthens Amazon' edge, given the scandals Facebook kicked up recently i bet some execs at Amazon are very happy with that acquisition.

[@VALUETAINMENT]

I think you are correct about Amazon and I hope they keep doing it. Thanks - Tom

[@fahad-m62]

Haha, thanks guys! 😄

[@Estebanserrano96]

Excellent Tom. Where can I buy a cool shirt like yours?

[@makeitmohit3272]

Good content👌

[@bascal133]

Please do one about apples recent troubles! 🥺

[@gibransaliba8801]

I think that Amazon got the big discount on buying Zappos's. I would have taken no less than 12 billion

[@VALUETAINMENT]

I like the way you think! Thanks - Tom

[@gibransaliba8801]

Thank you Tom and Patrick for the Value

[@heros2580]

the anecdotal stories are cool for the company reputation, but they also set precedents and expectations. Are they managing expectations well?

[@jeoboden]

Only reason I am subscribed to this channel

[@VALUETAINMENT]

Hey, I really appreciate that. Thanks - Tom

[@oskarniebudek2431]

Hey, Biz Doc, can You explain what differentiates enterpreneur who earns 100-200k dollars a year from enterpreneur who earns 1 million-10 milion dollars a year. And second same question about companies who didnt went public and those whos stocks we can buy.

[@oskarniebudek2431]

That might be very good video about it. It will help very many valuetainers

[@VALUETAINMENT]

Oskar - I am not sure if there is a differentiation based solely on earnings. Time may be a factor in terms of building earnings, obviously. But there’s also scale of a business (local small business vs. a national web e-trailer, for example). In my opinion, entrepreneurs should be classified by the success of their efforts - founded - proof of concept - profitable - going concern. Good question! Thanks - Tom

[@oskarniebudek2431]

Tom, thanks for answerig me. I asked this in order to make 1 milion $ (złotych - PLN in Poland, propably same lifestyle 1$ in USA=1PLN in Poland) in annual earnings. I made 100+ PLN last year, made some improvements and i will propably hit 200+ this year. What should i do to become 1 000 000 million + PLN a year? earnings around 100 k is constantly struggling with thoughts what can I afford, or should i still live way below means. 1 000 000 will make me happy. After that i will still be improving, but how to get there?

[@oskarniebudek2431]

Made it shorter: How to make a company in order to being thought by You about this company? :)

[@sagenev]

This sounds very similar to the reputation Sweetwater.com has developed in the retail musical instrument web space. Great website where you could see the actual guitar you were buying instead of a photo of one "just like it" was huge, fanatical customer service and some sweets thrown in with every purchase have generated a tremendous amount of good will in a community that has gone underserved by some scammy local stores and big-box disasters like GuitarCenter.

[@taoist32]

sagenev Nice. Guitar Center is just one expensive store. There is a cheap place called Starving Musician (something like that) but there choices of guitars are very limited.

[@VALUETAINMENT]

Great example! Sweetwater is trusted by musicians. Thanks - Tom

[@mohitpunjabi4978]

Hi, Tom! Love your case studies man.. really Awesome!! I have a question thou.. If zappos had a revenue of $1 Billion how come amazon bought it for $940 M?? Would'nt it worth more?

[@VALUETAINMENT]

Good question - The revenue was over $1B but the profit was far less. Companies usually buy profits and pay 5X to 10X depending on the industry. Amazon bought future “profits” - Thanks, Tom

[@mohitpunjabi4978]

Wow.. So humbled for the knowledge.. Thanks.. Very much appreciated :)

[@getitfixed3910]

I disagree with you a little on this one, I run a business and I used to treat people like they were my best friends and not because I wanted their business or their money but Just because I had empathy for all those people and try to help them, and most of them were grateful and nice and even made some friends, and they posted really nice reviews of my business, but at one point because of that I started having people coming to my business asking me to provide my services for free some of those services are $300+, and when I didn't do it they started threatening me that they will post bad reviews or tell the media etc, etc really sketchy people, that I right away realized were just playing the self pity card. I guess a big company like zappos can afford those kind of loses, but a company like mine or others not really, there is a south park episode called "you are not yelping" that shows exactly what I'm talking about. You should watch it. Thanks for the videos, I watch them 2 or 3 times a week and learn something new every time

[@VALUETAINMENT]

Thanks for those comments - you make a very good point about customers who exploit your good intentions. Must be prudent. Thanks- Tom

[@letyjay9715]

your biggest mistake was treating people like your best friends. you have to treat them like a very valued customer. the difference is the latter knows they are a customer so they have to pay. the former , friends expect free service, they will see that weakness in you and abuse it. so its all about management style. key word in there is management. people can see you have the best service and treat everyone with great respect because you choose to, not because you have to.

[@JoefreyHijara]

I always enjoy your case studies tom! i'd sub twice if i can

[@VALUETAINMENT]

We appreciate that very much. Thanks - Tom

[@MowSow]

I don’t know why I feel listening to Tom as if I am getting a lecture from a Christian evangelist 🤣😂🤣🤣 very convincing But the difference is that Tom offers valid and accurate presentations, unlike evangelists that offer brain washing delusions Keep up the gear work, your videos are absolutely eye opening

[@ezeaghasisolomon3304]

Yes! another awesome case study, one word for it

[@VALUETAINMENT]

Thanks! Tom

[@govindsethunath9483]

Please do one on Koch Industries

[@VALUETAINMENT]

Yesterday I was reading about those guys. It was kind of sad. One guy didn’t know which election to buy his brother for his birthday. Thanks - Tom

[@jgonzales2538]

🔥🔥🔥

[@shubhamchavan1341]

awesome

[@VALUETAINMENT]

Thanks - Tom

[@moviesjean23]

Is Tom a formula one 🏎 fan ?

[@kabagemark6502]

please do case study Pinterest

[@shawheen2386]

Anyway to get a case study on Newegg?

[@VALUETAINMENT]

I think that would be very interesting suggestion. Thanks - Tom

[@nicolaecomaniciu6489]

could you make a case study about Shazam, now that is bought by Apple?

[@saintshaggy1372]

*CAN YOU PLEASE PLEASE COMPARE ETSY AND HANDMADE AT AMAZON PLEASE SIR PLEASE...*

[@luisanthonyrios401]

I had respect for him before I met one of his MLM Sales Team Members, they train them to not be transparent about their earnings this happen to me at their Sherman oaks office. They asked me to come in to see their opportunity , I asked them point blank how much did they earn while with PHP , even though I shared my bank account statements and earnings they refused and were offended I asked. All I was asking was proof of the income they were pitching me. No respect for this scammer and his operation of lies. Patrick feel free to reach out to me I will show you proof of what I am saying.

[@AMalas]

Which company are you talking about?

[@wdai03]

@@AMalas php, the one run by Patrick Bet-David guy, don't really know what his value is and is a bit sketchy. Tom seems to know his stuff but seems to be part of php as well

[@lisenkaci257]

Living on a shoestring, haha great pun.

[@VALUETAINMENT]

Oooooos! Thanks - Tom

[@gaafaneismail9658]

Nice company

[@rsb_4628]

SQUAAADDDDDD 🔥

[@VALUETAINMENT]

Love to the squad! Thanks, Tom

[@pranavnaresh4675]

Kindly do a video on the story of SpaceX

[@VALUETAINMENT]

That is a great suggestion. Not everything went smoothly at first for them. Thanks - Tom

[@michaelspano6127]

no "DAMN"?!?!?!? :)

[@VALUETAINMENT]

When we finish filming I realize I hadn’t done that!! Thanks - Tom

[@michaelspano6127]

Valuetainment lol, I missed it! Tom, do you have a dust account? Mikes31... shoot me a message

[@ArkayneShad0w]

Love the facial hair my boy

[@VALUETAINMENT]

Thank you sir! Thanks - Tom

[@vamsikrishnachandrapati8763]

NO DAMN!! this week huh....

[@VALUETAINMENT]

Oops!!!! Thanks- Tom

[@Theone99123]

Never been this early

[@VALUETAINMENT]

SQUAD - you are #1! Thanks, Tom

[@KenyaneDaniel]

What I wanted

[@megwhitebread83]

buckler co

[@shad6392]

Why would anyone sell such a successful company for such a lower price ? I don’t get it.

[@HammerLeaf]

I hope you're getting paid by those sponsors on your billboard shirt.

[@jp32123]

exactly WHAT are u guys gonna do with this information??

[@ryanstucke7811]

I have never heard of zappos befor

[@VALUETAINMENT]

Welcome to earth, ha ha - just kidding. They sell shoes online. They are known mostly in the USA so if you are one of the international VT viewers you may not have ever heard of them. Thanks - Tom

[@SkweakyMuffin]

Buckler co

[@spacecapitalism7152]

If I get 1,000 people to subscribe and say Bucklerco recommended me to Valuetainment can I get invited to the Valuetainment annual entrepreneur conference?

[@VALUETAINMENT]

Show us the 1,000 names and you are IN! Thanks - Tom

[@spacecapitalism7152]

I want to not have the soliciting feel when presenting Valuetainment, so it will be slow but steady. I want them to see the videos and enjoy it like I did. I want others to become advocates for Valuetainment like I am.

[@rambow70]

Can't wait for the case study for when Apple buys Tesla to solve their electric car struggle and fix Tesla's supply chain nightmare with Tim Cook's COO background.

[@dopemusic6414]

rambow70 I can see that happening. I don't understand why VW or Toyota just don't buy them put.

[@rambow70]

I am not familiar with buying a company with a put option but the reason Apple looks like such a promising buyer is because after the tax deal that took effect this past year they are moving back ~$250B back to the United States which is a perfect amount to buy Tesla. Tesla has a ridiculous market cap right now so my guess is Apple will wait until their market cap shrinks, which it is due to their supply chain/dead line issues, and then buy the company in cash.

[@snaxbhaihai9102]

Anyone here from IB HUBS?

[@dopemusic6414]

Fun fact Zappos means shoes in Spanish

[@VALUETAINMENT]

Yes Indeed! Thanks - Tom

[@jonathanjohnson7636]

Conglomerate!!

[@VALUETAINMENT]

Indeed!! Thanks Tom

[@adamchurvis1]

It's "Nordstrom," not "Nordstroms." Don't let sophisticated women hear you say it wrong. Trust me.

[@steevo_thelaw528]

Paid to quit....why don't you say the real reason...so that save money on workers comp...dancing around it?

[@VALUETAINMENT]

Good point but for Zappos, honestly, that ain’t it. Thanks - Tom

[@iamfuckingyourwaifuandther2743]

Lul, they should have bought zippos. Now how is amazon supposed to set fire to the competition.

[@VALUETAINMENT]

Funny - You never let me down. Thanks - Tom

[@nolisto1]

Quit bonus explained. If you're not willing to work like a slave you can quit right now.

[@VALUETAINMENT]

Not exactly- Thanks Tom