Sharing Information with Suppliers
Zappos has a very special relationship with all of its suppliers. Through every interaction they work to WOW them by not only being great business partners but Zappos shares all of their inventory information with them. They developed an Extranet which allows venders to see on hand inventory, sales and pricing and margins. This insight provides Zappos with a clear competitive advantage when it comes to managing their inventory. Instead of only having internal buyers worry about when and what to purchase the venders themselves can make recommendations. If a supplier sees that one item is selling really well they can suggest to the Zappos buyer to purchase more. On the other hand if the vender sees that an item is selling more slowly then they can suggest halting further shipments. This gives Zappos a sustainable competitive advantage by keeping inventory levels very low and being extremely flexible and adaptive to customer preferences. Zappos only has a buying staff of about 100 but with this information sharing they receive buying suggesting from thousands of venders. This is sustainable because of the following reasons: •Extranet was developed in house so it will be hard to imitate. •Not many online retailers are willing to be so open with their company information. •No matter how big the vender is they are able to connect to the system
Overnight deliveries to Customers
Utilizing overnight shipping for all orders gives Zappos a clear competitive advantage in terms of customer satisfaction. Zappos only guarantees a 5 day shipping time frame but by often deliver the next day using UPS overnight. Customers are very happy when their order arrives early. When an order is placed it is fulfilled and shipped within a matter of hours. This is done by both a sophisticated warehousing operation and inventory management system. The warehouse...