Launched 3 days ago and already valued at $3bn, Jet.com is doing the unthinkable: aiming to beat Amazon using creative, club prices on everything you buy for a membership fee. Here’s why you should give it try.
Front page news:
The Wall Street Journal calls Jet “one of the most audacious and costly business experiments in e-commerce history.” People in the tech industry have been waiting for the launch of this one with bated breath. Launched on Tuesday, JET.com is looking to challenge Amazon in a big way. The cutesy website boasting Dinesh from HBO’s Silicon Valley as a spokesperson, asks you to “simply visit its site and it will guarantee the lowest prices across some 10 million items.” When I searched for an Oral B electric toothbrush, I found this item, along with the Amazon price in a side-by-side comparison.
For a fee of $49.99 a year (currently being waived for 3 months – and cheaper than a Prime Membership), Jet uses a creative approach to product selection including a “concierge” service that gives it access to millions of additional products. Basically, if it doesn’t have what you’re looking for, it will buy it off another site and charge you LESS than what it paid to get it. In fact, consumers could save 10 to 15 percent below the lowest prices online. This is a play for the cost conscious shopper, to be sure.
Digging in more:
Jet describes itself as the shopping cart membership service “that gets you club price savings on just about anything you buy.” Check out its simple-to-understand pricing video:
- Pricing: $50 which you can waive right now to try the service for 3 months.
- Shipping: Free for orders over $35, $5.99 for those under
- Returns: Free for full priced items within 30 days. Free returns not available if you waive returns in exchange for savings.
- Dynamic Discounts: Buy items labeled “Smart Items” and your savings increase, buy more items and more Smart Items appear. Get additional discounts for paying with a debit card, slowing down shipping or opt upfront to not to a return an item, and you get the discount for features already “baked into” pricing.
Reading between the headlines:
As an Amazon devotee, I feel that my ordering has gotten so out of hand. So much so that I now know my UPS delivery guy by name, recognize him when I see him in different neighborhoods and even buy him a Christmas gift now. But never do I get a sense of satisfaction that I am getting the best deal on the items I’m purchasing. So I am intrigued by Jet.com’s launch and the savings possible. To demonstrate how intense the pricing cutting is, The Wall Street Journal purchased 12 items for a price of $275.55, but Jet’s cost was $518.46.
This could go no where or be the next monster online retailer. Big players including big names like Goldman Sachs and Google Ventures are hoping the latter happens. From them, this company has raised industry topping cash in its first round (not necessarily a good thing given some of Jet.com’s predecessors. See below) . At launch, it already has a $3bn valuation with almost no revenues. Its $100m marketing budget does put a this in a whole new stratosphere. “Jet also has perhaps the highest valuation ever among e-commerce startups before their official launch.”
Its not to say success can’t be had when loft comes so early, it is just something to watch.
What’s next:
Enjoy the experience of being a customer of desire by Jet.com. The membership fee has been waived, the product selection continues to grow by the millions and so do the deep discounts. Playing hardball with Amazon is ugly business for them and anything but for us shoppers. Enjoy giving this one a go and let me know your experience!
