Alfred Lin: Zappos At Break-even Through 2005, Profitable in ’06 and ’07
Zappos comes up with some frequency in bar conversations with retailers and agencies at industry shows and events.
“But they’re still losing money,” is the oft-heard refrain from many Zappo-watchers both inside and outside the footwear industry.
So I noted with interest that CatalogSuccess reports Zappos Chairman/COO/CFO Alfred Lin stated last week at NCOF that
“after breaking even during its first six years, [Zappos] did post profits in 2006 and 2007.”
There you have it, from their CFO, as reported by Catalog Success: Zappos is profitable.
No discussion of how profitable, but black ink of any size is quite different than red.
And here’s the top line report:
- 2000: $1.6 million annual sales
- 2001: $8.6 million
- 2002: $31.9 million
- 2003: $70.1 million
- 2004: $181 million
- 2005: $370 million
- 2006: $597 million
- 2007: $840 million
- 2008: $1 billion (projected)
Head spinning, isn’t it?
If Catalog Success accurately captured Lin’s statement — that is, if Zappo’s first six years of growth were at break-even and at not at tremendous losses — that would be boggling.
Amazon-style growth without the years of Amazon-style losses?
Retail’s laws of gravity repealed!
This is all second-hand, so I am taking it with a grain of salt, but it is quite interesting…
Link: Freewheeling Numbers From High-Flying Zappos.com, Catalog Success April 2008
Alan Rimm-KaufmanAlan Rimm-Kaufman founded the Rimm-Kaufman Group...
Zappos has been more adept at conversion optimization than virtually all of their competitors, and that’s allowed them to throw my traffic in the fire and spit out more revenues.
The lesson in Zappos’ meteoric growth is:
“He who converts best wins.”
If you don’t live by web analytics, continuous testing and targeting improvements, you’re toast.
“He who converts best wins” — Amen, Chris, we’re reading from the same book on that one.