Zappos founder Xie Jiahua lost $840 million in heritage disposal

 Zappos founder Xie Jiahua lost $840 million in heritage disposal

Zappos said in an official memorial statement that the world has lost the visionary and incredible man, and his spirit will always be a part of Zappos.

According to Forbes estimate in August 2020, Xie Jiahuas net assets will reach 840 million US dollars, about RMB 5.5 billion. According to the Forbes real-time ranking, it is about 251-253. With the death of Xie Jiahua, the disposal of huge wealth behind him has become a new focus.

According to the reporters understanding, Xie Jiahua has never publicly stated his marriage and childrens status (most likely unmarried and without children), and the determined family members are only his parents. He immigrated to the United States from Taiwan in early years. However, Xies will and how to dispose of $840 million assets have not been disclosed. However, in view of his enthusiasm for the transformation of the old city of Las Vegas (at his own expense of $350 million), some of his assets may be invested in projects such as the city fund.

Starting point of wealth creation

At the beginning, Xie Jiahua showed his unusual. At the age of 24, he made the first pot of gold from tycoon Microsoft with linkexchange, which was founded by him. At 26, he became CEO of Zappos, and at 35, with the companys annual sales of 1 billion US dollars, he surpassed the field of e-commerce in the United States.

Xie Jiahua founded linkexchange, an online advertising agency, in 1995, and absorbed $3 million of investment from Sequoia Capital. As a result, linkexchange has more than 800000 member websites and about 100 employees. In 1998, Xie Jiahua sold it to Microsoft at a price of 265 million US dollars, making his first pot of gold.

Then, 24-year-old Xie Jiahua, along with Alfred Lin, a Chinese American, and Nick swinmurn, a British industrialist, jointly launched Zappos (formerly called shoesite) with a $1 million capital injection.

Xie Jiahua became chief executive officer of Zappos in 2000 and further invested 10 million US dollars in Zappos for 20 years.

Amazon, July 23, 2009uff08 Amazon.comInc . it spent $1.2 billion to buy Zappos at a high price, setting a record for the highest purchase amount in the history of e-commerce enterprises. Amazon shares closed at $93.86, up 5.72% from the previous day. Xie Jiahua made a direct profit of $2.14 trillion and an annual salary of $40000. Zappos investors received 10 million Amazon shares (valued at $888 million), which were worth about $1.2 billion at the end of the transaction, and employees received an additional $40 million.

In the same year, Zappos topped fortunes list of best employers and Xie Jiahua was ranked 27th in fortunes under 40 list.

After the acquisition, Xie Jiahua did not retire with wealth like most CEOs. Instead, he pushed Amazon to reach an agreement with Zappos to give Zappos a high degree of autonomy. So far, Xie Jiahua has been chief executive for more than 10 years, until his resignation in August this year.

Xie Jiahuas business success lies in its unique business model. Traditionally, people prefer to try on shoes before buying them and feel them for themselves. Therefore, the strategy adopted by Zappos under Xie Jiahuas leadership is that the user buys a shoe and sends three different sizes of the same shoes to the official website. After the user tries on the shoes, the user leaves the most suitable pair and sends the other two back, with the freight borne by Zappos. In addition, Zappos took photos from eight angles for each shoe in stock to facilitate customer selection.

To speed up logistics, Zappos moved the warehouse near the airport of United Parcel Service, the worlds ninth largest air express company, and promised that the goods would be delivered within four days. In addition, Zappos also provides free return and exchange service. Xie Jiahua specially designed an e-mail system to automatically respond to customers requests for goods replacement.

Although the return rate is as high as a quarter, the average amount of each order is up to $90, and its gross profit is still up to 35%. Whats more novel is that Zappos later launched the after-sales deferred payment method. Customers can not pay within 90 days after purchasing Zappos goods, and settle accounts when they have sufficient funds. These moves may seem commonplace today, but it is Zappos who started the wave.

Zappos stands out from many e-commerce websites because of the above unique and innovative business methods, and its sales volume has begun to soar. In 2004, Sequoia Capital injected $10 million in venture capital. Together with other investors, Zappos received a total of $20 million. In the following year, Sequoia Capital injected another $15 million into it.

Thanks to capital and unique business methods, the total sales of Zappos increased from $1.6 million in 2000 to more than $800 million in 2007, accounting for a quarter of the total value of the US shoe e-commerce market of $3 billion. In 2008, the total sales of Zappos exceeded US $1 billion, with more than 1600 employees.

Amazons acquisition in 2009 also means that Bezos is impressed, favored and threatened by the latters high-quality online order delivery and customer service reputation. But thats why Bezos decided to give unusual autonomy to the unusual Xie Jiahua and Zappos.

In his work, Xie Jiahua is committed to taking a non orthodox management style of no leadership as the core culture of Zappos. In this leaderless decentralized management style, decision-making is carried out by the whole company instead of the traditional hierarchical system. There is no strict division of individual hierarchy within the company, and the decision-making process is expanded to the members of the whole organization to discuss and make decisions together. Zapposs culture thus embraces everyones characteristics..

In his life, he is committed to the reconstruction of the old city. For example, in order to revive the old city of Las Vegas, Xie Jiahua has successively bought a lot of land, including apartment buildings, residential buildings and small commercial buildings, for renovation and investment. By the time he died, he had paid $350 million for the cause.

Source: 21st century economic report author: Hu Tianjiao, editor in charge: Wang Xiaowu_ NF