Recently, Amazon purchased Zappos for nearly one-billion dollars largely based on Amazon’s stock price. However, I truly believe that Amazon already had a Zappos-like offering: Endless.

Founding Factors
Amazon was initially built to be the source for books and has since expanded to almost every retail category and beyond. Endless.com was built by Amazon.com in response to customers’ desires to shop a destination dedicated to shoes and handbags. The original idea behind Zappos.com was to create a web site that offered the absolute best selection in shoes in terms of brands, styles, colors, sizes, and widths. This was really driven by the founder’s desire to find the right pair of shoes, in the right size and color.

Amazon had an agile offering through endless.com with aggressive free overnight shipping and free overnight returns. Early on, endless.com used to offer negative shipping where they would back out the $5 shipping fee from the retail price. I imagine that Zappos will remain a separate brand and Amazon will slowly try to leverage its purchasing clout, logistical and technical infrastructure to reduce costs. I do feel that Amazon will be inheriting slimmer margins than they are accustomed to seeing and shareholders may not be too pleased. The question remains whether Amazon will still maintain endless.com alongside zappos.com.

See and hear Jeff Bezos talk about the acquisition and the reasons behind it.

Read about Zappos earnings here: $11MM in Earnings