Zappos

Tony Hsieh launched Zappos in nineteen ninety nine selling shoes online. Competitors thought he was insane. Shoes are fragile. Shipping costs money. Returns would destroy the unit economics. Hsieh did the opposite. Three hundred sixty five day returns. Free shipping both ways. Call center operators with no time limits on phone calls. Every policy designed to eliminate friction. Traditional retailers made money on transactions and controlled costs by limiting customer service. Zappos made money on customer lifetime value and treated service as the margin. A customer calling at midnight wasn't a problem to solve quickly. They were an opportunity to create such a positive experience that they'd shop again.