Jet.com, the members-only e-commerce marketplace, opened to the public Tuesday morning after months in beta.
Founded by Marc Lore, who co-founded and sold Diapers.com to Amazon for $545 million in 2010, the Hoboken, NJ-based outfit is looking to take on Amazon with the promise of offering the lowest prices anywhere on the Internet.
Jet’s annual membership of $49.99 — after a free 90-day trial period — compares to the $99 Amazon Prime members pay annually for access to shipping, pricing and availability deals on that site.
Jet.com will primarily operate as a marketplace, though it also partners with retailers to save consumers money on those sites. The start-up has amassed a $225-million war chest, according to Crunchbase, making it one of the most well-funded and eagerly anticipated e-commerce launches in recent years. Among its investors is Alibaba Group, the Chinese e-commerce behemoth. Forbes reported that Alibaba invested in Jet.com as part of a $140 million financing round, closed in February, led by Bain Capital Ventures.
Products Are Sold At Cost
The members-only site “gets you the best price on more than 10 million products, every time you shop.” Shipping on orders over $35 is free, as are all returns. The company has said the average shopper will save $150 a year.
The low-price guarantee is made possible because Jet doesn’t make any money on selling products; all revenues come from membership fees.
The pricing engine finds the lowest price on items in real time and suggests items that will lower costs when purchased together. Rewards also come to those who have the patience to choose cheaper pricing options: “We love the thrill of a good deal, so we’ll alert you to thrifty ways to save even more as you build your order. Like buying items that ship from the same location, waiving returns and using a low-fee payment method.”
The Wall Street Journal reported the lengths Jet is willing to go to make consumers happy, finding that as it aims to quickly build customer loyalty, Jet will also buy products from retailers when it doesn’t carry an item and have it shipped to the customer.
Let The Pricing Wars With Amazon Commence
If there was any question about what Jet has its sights set on, a quick look at many product pages will answer that question.
Amazon price checks are built into the experience, as shown on the iPad Air 2 page captured below.
Amazon price checks are built into many product pages.
Time will tell how much of a thorn in Amazon’s side Jet.com proves to be, but it’s certainly hoping to change the game. While the site was still in beta, data pricing firm Boomerang Commerce released a study that found that across 200 products in a number of categories, Jet.com’s prices were lower than Amazon 94 percent of the time — by an average of 27 percent.
For its part, Jet has said prices will typically be 10 percent to 15 percent cheaper than anywhere else online.
Where Jet.com falls short at launch, though, is selection. The site lists roughly 5 million products, compared to over 300 million items available on Amazon.com, according to Boomerang. Selection, in part, is where its affiliate program comes into play.
Jet Anywhere: Affiliate Partnerships With Over 600 Retailers
Consumers can also save when they shop on other retail sites through the Jet Anywhere program. The savings come in the form of JetCash, which members can use to buy products on Jet.com. Apple, REI, and Bed Bath & Beyond are among more than 600 retailers participating in the affiliate program. Rather than take a commission from referral sales, Jet passes the savings to consumers.
The system doesn’t automatically recognize purchases through Jet Anywhere, however. Users must email their order confirmations to Jet to have JetCash credited to their accounts.
The site is launching with a three-month trial membership that begins with a shopper’s first purchase. Consumers will be alerted to sign up after the trial period and won’t be auto-enrolled.
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