Zappos Makes Nice with Vendors
As part of a determined effort to build more collaborative partnerships,
vendors of Zappos are given access to the same information as their buyers
— including inventory levels, sales and profitability, according to a Harvard
Business Review article. They can suggest orders for buyers to approve as well
as any recommend changes to their brand boutiques on the site.
Fred Mossler, who heads up merchandising at Zappos, believes providing
vendors with the tools and accessibility will hopefully lead vendors to spend
more hours helping drive sales at Zappos than their typical account.
“The average buyer at Zappos has a portfolio of 50 brands, but because
of transparency, there are an additional 50 pairs of eyes helping run the business,
too,” he wrote in an excerpt to the book Delivering Happiness by
his boss and Zappos’ CEO Tony Hsieh. “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?”
ways Zappos works to reinforce vendor partnerships:
- In communications, Zappos tries to return any vendor call on the same day
and respond to e-mails within a few hours.
- In negotiations, if Zappos is looking for longer payment terms, different
sales plans based on days-of-payment terms are presented. Wrote Mr. Mossler, “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.” Marketing
approaches feature the same approach.
- When vendors fly to Zappos offices, they are greeted at the airport by
one of Zappos shuttles. First timers are given a tour. Vendors are given
drinks and snacks at headquarters.
- Once a year, Zappos throws a lavish Vendor Appreciation Party timed around
the WSA footwear show designed to be an industry event. On the last Friday
of each month, golf tournaments for vendors are thrown.
- When a brand achieves a certain milestone, they’re given T-shirts reading,
for example, “My brand did a million dollars on sales on Zappos.com.”
- When dining with vendors, Zappos always tries to pick up the check.
Mr. Mossler, who joined Zappos 11 year ago, acknowledged that developing strong
relationships was instrumental in helping the website gain access to brands
in the early days of e-commerce. But the former footwear buyer at Nordstrom
also saw firsthand the shortcomings of rude and sometimes abusive treatment
of vendors that he believes is still fairly common across retail.
“I saw buyers abuse
their vendors daily and use their positions of power for short-term wins; these
buyers ultimately failed in the long run,” wrote
Mr. Mossler. “Then there were the buyers who partnered closely with their
vendors, treated them with respect, and created long-term opportunities;
these buyers always had the best business.”
Discussion Questions: What are the biggest impediments to collaboration and how can they be overcome? Is a collaborative approach along the line of Zappos’ practical for many retailers?