Zappos Pricing Glitch Costs $1.6 Million, Forces Process Change
Written by Evan SchumanMay 27th, 2010
After a Zappos.com site last week suffered a pricing glitch that cost the company more than $1.6 million, the retailer put in place a new procedure to prevent any single employee from accidentally changing prices, according to Zappos CEO Tony Hsieh. Amazon bought Zappos last year for about $850 million in a mostly stock deal.
On his site's blog, Hsieh wrote that the current software—which is all homegrown by Zappos—was so complex it was difficult for non-programmers to feed it information. "Unfortunately, the way to input new rules into the current version of our pricing engine requires near-programmer skills to manipulate, and a few symbols were missed in the coding of a new rule, which resulted in items that were sold exclusively on (Zappos partner site) 6pm.com to have a maximum price of $49.95," he wrote.
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