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Jet.com Rivals Amazon, Walmart as Online Retailer

Image: Jet.com Rivals Amazon, Walmart as Online Retailer
Jet.com aims at people who cared about saving money, says founder Marc Lore. (Jet.com site)

By    |   Tuesday, 21 Jul 2015 09:01 AM

Jet.com launched Tuesday, aiming to disrupt mega-retailers like Amazon and Walmart with better prices and better technology.

"With Amazon Prime, Google Shopping Express, eBay Now, [Walmart’s] ShippingPass and ShopRunner — everyone was chasing the same customer — the customer willing to pay a premium for service," founder Marc Lore, according to TechCrunch.

"I saw a big opportunity to go after the much larger segment of the market, which was people who cared about saving money. So I came up with this idea where consumers could save 10 to 15 percent below the lowest prices online."

Similar to wholesale clubs like Costco, Jet.com charges a $50 annual membership fee upfront, and promises unbeatable savings from there on out. For its launch this week, Jet.com is offering a free three-month trial membership.

Jet.com's secret sauce is a sophisticated real-time pricing system that offers discounts based on what's in a shopper's cart, and where each of those items will ship from.

"On one Heinz ketchup bottle we could either lose 20% if it had to ship cross-country, or make 20% if it was near. So we thought, let's give retailers the ability to compete for that ketchup depending on where the order comes from," Lore explained to USA Today.

From there, Jet.com offers customers additional discounts if they decide to pay with a checking account instead of a credit card, and if they opt for slower shipping on certain items.

Barnes & Noble, Lenovo, Dell, Harper Collins and over 2,000 partners have signed up to sell their wares through Jet.com, however only 500 have fully integrated their inventory and logistics systems.

Tests from USA Today and the Wall Street Journal showed that Jet.com consistently delivers on its promise to deliver prices lower than its chief rivals.

Some financial analysts say, however, that the company is taking a heavy loss on some orders, and will burn through its startup capital — $225 million — over its first few years. The business model will become sustainable in the long term if it can amass enough customers, revenue, and profit in its first few years.

In launching Jet.com, Lore is also taking on his one-time boss, Amazon founder and CEO Jeff Bezos, subject of the bestselling book, "The Everything Store: Jeff Bezos and the Age of Amazon."

After a price war against his previous company, Quidsi — owner of Diapers.com and Soap.com — Lore sold his company to Amazon in 2010 for $545 million.



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Jet.com launched Tuesday, aiming to disrupt mega-retailers like Amazon and Walmart with better prices and better technology.
jet, rivals, amazon, walmart
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2015-01-21
Tuesday, 21 Jul 2015 09:01 AM
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