Zappos 6pm.com make a $1.6 million mistake. Get lots of PR in return and social media cuddles.
Zappos the Twitter wunderkinds made a big boo boo. Their pricing engine set a maximum price of $49.95. Six hours later, and 1.6 million dollars later, the company blogs about it:
Hey everyone – As many of you may know (and I’m sure a lot of you do not), 6pm.com is our sister site. 6pm.com is where brandaholics go for their guilt free daily fix of the brands they crave. Every day, the site highlights discounts on products ranging up to 70% off. Well, this morning, we made a big mistake in our pricing engine that capped everything on the site at $49.95. The mistake started at midnight and went until around 6:00am pst. When we figured out the mistake was happening, we had to shut down the site for a bit until we got the pricing problem fixed.
While we’re sure this was a great deal for customers, it was inadvertent, and we took a big loss (over $1.6 million – ouch) selling so many items so far under cost. However, it was our mistake. We will be honoring all purchases that took place on 6pm.com during our mess up. We apologize to anyone that was confused and/or frustrated during out little hiccup and thank you all for being such great customers. We hope you continue to Shop. Save. Smile. at 6pm.com.
Director of Brand Marketing & Business Development
Zappos Development, Inc.
Update: Upon further investigation and clarification with our merchandising team, I realized that the statement about “capping everything on the site at $49.95″ was not 100% accurate. There are some items that are sold on both 6pm.com and Zappos.com, and those items were not affected by the pricing mistake. The pricing mistake applied to items sold on 6pm.com but not Zappos.com (the vast majority of inventory available on 6pm.com). The actual dollar figure of our loss is accurate – over $1.6 million. Let’s just say this was not a boring weekend for us.
I remember – can’t find it now – blogging about a geek gadget company that ended up with MORE love after mucking up orders in a big way. Social media makes people more patient and understanding. Though to be honest, Zappos mistake is pro-consumer, not likely to cause rampaging crowds. But Richard Webb from ReadWriteWeb and I both stated at Media08 (in 2008) that mistakes often make more than break companies in social media. Not sure they understood us back then…
By the way, it was nice to see Optus admit a mistake on my blog today.