Big Change for Zappos Underscores Transparency
The Zappos twitter feed just posted this letter (an excerpt here - full letter here). Zappos has decided to let parent company Amazon take over the Kentucky (i.e., right next to UPS hub) fulfillment center operations. I'm posting here as this letter is pure Zappos: Open, thoughtful (5% increase in compensation), and fun. I suspect that as we follow how the change is managed, perhaps through the Zappos Insights blog, we'll learn about how to do this kind of a massive shift in a strong culture company.
Date: Wed, 06 June 2012From: Tony Hsieh (CEO - Zappos.com)To: All Zappos EmployeesSubject: Kentucky UpdateImportant announcement from Tony on behalf of FACT (Fred, Arun, Chris, Tony):Please set aside 20 minutes to carefully read this entire email.Today is another big day in Zappos history.We've made a strategic decision for Zappos that will surprise many people. In thinking through all the possible scenarios for how to best grow the Zappos brand and business over the next 10 years, we've come to the conclusion that in the long term, it makes more business sense for Amazon to oversee our Kentucky operations so that Zappos can focus on all the other things that differentiate our brand and culture in our Las Vegas headquarters and SF office. The goal is to transition all of our Kentucky operations (except for our 6pm outlet store) to Amazon by September 2012.It's been over 13 years since Zappos was founded in San Francisco, and there have certainly been a lot of changes and surprises during that time, including:2003 - Zappos walking away from the drop ship business during the early days2004 - Zappos moving our headquarters to Las Vegas2009 - Zappos being acquired by Amazon2010 - Zappos announcing our future headquarters will be Las Vegas City Hall in downtownWith our plan to move our headquarters in 2013 to the former city hall to help revitalize downtown Las Vegas (which will ultimately help us attract and retain more employees) and our 2011 integration with WMS (Amazon's warehouse management system), we took a long, hard look at where we should concentrate our efforts and resources over the next 10 years.....
As many of you know, we already are operating two physical warehouse buildings and will soon be out of room in those buildings due to our growth. As we started looking into the possibility of opening up a third warehouse building in Kentucky to hold our inventory, we realized that Amazon was already running 69 warehouses around the world. I've been *reminded* by our lawyers that I'm not allowed to make forward-looking statements because Amazon is a publicly traded company, so let me phrase things this way: In the next 10 years, if Amazon continues its rapid growth rate, they will be running over 69 gazillion warehouses across the entire universe (which, by my estimates, will collectively require over 1.21 gigawatts of energy to properly operate).