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Zappos, the SEO/SEM Business

It is rare these days that I encounter an acknowledgement that SEO (or more broadly, Search Engine Marketing SEM) is a fundamental in online commerce. In my business, that’s a given – most of us who practice what we preach choose to do so in markets where SEO makes optimal sense. We actually pick markets for their SEO potential. But for most business ventures, SEO is not a defining attribute of the business model.

Almost daily the SEO forums someone says “why would any SEO worth his fee work for anyone else when he can optimize his own sites?” or something along those lines. It’s a good question, answered by stepping away from the keyboard and recognizing that sometimes there is more to work than profits. Things like sunlight and other people can actually be desired more than yet another day in the dark optimizing web pages. Not always, but sometimes.

But outside the field of SEO, businesses usually refer to SEO as a necessary ingredient but not a driving factor of the business model. Entrepreneurs see oportunity in design, and product, and consumer demand, but why don’t they see the opportunity in SEO? They recognize it later when they see they need search marketing, and they put SEO/SEM into their trategic plans, but they don’t usually follow targets identified by SEO analysis. Later they find themselves spending exhorbitant amounts of money on pay per click advertising…to “generate” traffic.

Not so for Zappos. Zappos is a very successful online company. The review that Nisan Gabbay wrote of Zappos states that Zappos moved $370 million in shoes last year. That’s a decent business. I bought shoes from Zappos when they first started, and my family still buys from Zappos when price isn’t an issue. I followed Zappos as SEO case study way back then, and watched their moves with interest. Nisan’s review looks back at Zappos as an online business venture, funded by his company among others, but actually Zappos is more of an SEO company to me. An SEO company working on it’s own site: And even Nisan sees the SEM opportunity that Zappos recognized back then:

However, it seems to me that a successful formula for starting a retail e-commerce site is to sell a product that is great for SEM and have a sound strategy as to how to garner repeat business. For it was great customer service, but for other sites it might be community features or other enticements to keep people coming back.

It seems Zappos was started by some people who recognized that online shoes was an SEO opportunity. The combination of unique brand names, consumer asssociation of shoe buying with those brand names, and the fact that 2 of the $4 BILLION in annual shoe commerce was conducted by mail order played a role. The target was identified as BIG MARKET, already conducted via MAIL ORDER, with a strong SEO/SEM potential, and a consumer market that had proven itself as an appreciator of good customer service (a la Nordstrom’s.. the Shoe Store in Seattle).

Of course that was not luck. Those guys were aware. Having built LinkExchange (sold to Microsoft) they understood search marketing at the start. And they have done a great job executing on customer service and business operations. Free return shipping, no questions asked returns policy, free upgrades of shipping, and a focus on having-what-you-want if you like the brands they carry. For me Zappos was always an excellent experience, even when all of a shipment got returned. In fact, each order got bigger and bigger… it is just silly to not order the possible sizes and colors to try them out at home. Order 2 pair, choose one and return the rest became order 6 pairs, and two more for the kids, and return 6 pairs (keeping 2)… Zappos doubled it’s revenue with a few dollars increase in the costs of handling the shipments and returns.

But it is the SEO that interested me. The opportunity was there, and they went for it. Even today, when I have little expectation for Zappos to be cutting edge at SEO themselves anymore, Zappos is #2 behind the shoe maker’s own site for most of the big brands I searched in Google. Try mephisto shoes… Zappos is right there, with a big noticeable “free shipping & free return shipping” defining the snippet. Ditto for Ecco Shoes. How about Echo Shoes? Oops. Well, nobody’s perfect ;-) How about Mephisto alone? Sure… just below And Ecco alone? Geesh… Ecco has crowded out the page 1 SERP with dubdomain spam, but Zappos is top of page 2.

When I meet a client I have to wade through the business story to find the SEO opportunity. There are many facets to that, and we can usually find pure SEO opportunities if the client is willing to extend content sideways to achieve that goal, or partner to cross into a related theme, or get creative and innovate in the marketing arena. But when I work my own sites, it’s all about the SEO opportunity first, business second. SEO drives the business adoption process. If the SEO pure play isn’t strong, their is no business.

Thinking as I wrote this, I just identified another opportunity which I now believe will work well. High-profit, low overhead, niche market, almost optimal for today’s brand of SEO and in an area I enjoy pursuing and can see myself spending a good deal of time working. No, it’s not shoes. What defined it as opportunity? Of the many facets of the potential business, including raw material procurement, distribution channels, market growth potential, barriers to entry, etc… the defining attribute is the SEO opportunity. I can get to the top of the SERPs, and in those SERPs as they exist now, my page at the top will convert.

That’s all that matters. Ready, set, go. With low overhead, I have minimal exposure to risk. With non-competitive SERPs, I can be there under a hundred days with some staying power. With a high-profit item in a growing market, I can expect additional marketing opportunities to appear in that market over time, as more players recognize the market opportunity. Hell if it gets wholesale or retail competitive, I can sell my customer lists and start selling traffic instead of goods, as the price wars thin profits for the players who are my new SEO customers. In short, because I started with the opportunity that exists within my core competancy (SEO), my business will adapt naturally, and evolve over time to what it already is: a marketing company. I suppose I could go approach a few established retailers in that market for a partnering opportunity…. but why should I?

One Comment

  1. Aaron Shear wrote:

    Thanks for the compliment.

    Thursday, May 7, 2009 at 10:46 am | Permalink