November 3, 2003, 12:00 AM

Zappos.com on pace to more than double sales this year

Sales at footwear retailer Zappos.com are on pace to hit $70 million this year, up from $32 million last year. And that’s only in footwear. Zappos is also expanding into other lines.

Kurt Peters

Executive Editor

Sales at footwear retailer Zappos.com are on pace to hit $70 million this year, up from $32 million last year. And that’s only in footwear. Zappos is also expanding into other lines. “We don’t want people to think of us as just a shoe company,” CEO Tony Hsieh tells InternetRetailer.com.

Sales at Zappos have surged each year since it launched in 2000 with first-year sales of $1.6 million. Business climbed more than fivefold in 2001 to $8.6 million, then to $32 million in 2002. While on pace to hit $70 million this year, Hsieh says 2003 will also be his first year of net profits. Next year, he figures to reach $125 million.

Indeed, Hsieh speaks matter-of-factly about hitting 2010 sales of $1 billion--in footwear alone. “We chose the name Zappos because it doesn’t limit us to any one product category,” he says. Already Zappos is experimenting with sales of handbags designed to match footwear styles from brands like Kenneth Cole and Anne Klein, and it’s planning to roll out more handbags early next year. Longer term, it’s also looking at apparel and other lines. “We could expand to any category,” Hsieh says.

But in marked contrast to the ambitious and debt-building dot-coms of the web’s early days, Zappos is gearing up for its growth plans with a focus on customer service while limiting expenditures on marketing and other costs. For example, its in-house IT team has built a warehousing system that provides shoppers a real-time view of each SKU’s availability.

 

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