Jet.com
| File:Jetcom logo15.png | |
| Type | Private |
|---|---|
| Founded | 2014 |
| Founder(s) | Marc Lore Nate Faust Mike Hanrahan (computer scientist) |
| CEO | Marc Lore |
| Industry | E-commerce |
| Employees | 1000-1499 (February, 2016)[1] |
| Website | jet |
Jet.com is a privately held American e-commerce company headquartered in Hoboken, New Jersey. The company was cofounded by entrepreneur Marc Lore (who previously sold his company, Diapers.com, to ecommerce site Amazon.com) along with Mike Hanrahan and Nate Faust, and has raised $820 million over four venture rounds from firms including Google Ventures, Goldman Sachs, Bain Capital Ventures, Accel Partners, Alibaba Group, and Fidelity.[2] The site was publicly launched on July 21, 2015, with a beta testing program available months before.[3][4]
A prominent feature of the site is its real-time pricing algorithm. As shoppers add items to their cart, they're encouraged to build more efficient carts by selecting items labeled "Smart Cart" for additional savings.
History
After Marc Lore sold Diapers.com to Amazon in November 2010, Lore decided that users may be willing to pay less and accept longer wait times on obtaining online goods. He said that he thought competitors were catering only to wealthier customers "who care more about convenience than value".[5] Lore set out to create a site that takes the membership model of Costco and Sam's Club combined with the small and bulk selection of a general retailer and bring it to the e-commerce world. He began to peddle the idea, and after lunch with a partner at Accel Ventures, Lore was promised $1 million in seed capital to start the site. In addition to launching a site with such characteristics, Lore has said that he wanted to create a company with a culture unlike the secretive, competitive culture that he said existed at companies such as Amazon and Walmart.
The site launched with an initiative called Jet Insider, a campaign to spread the word about the company before its launch. Once users signed up, they were given six months of the service for free and a link to refer friends and family to sign up. Referrers were given prizes such as lifetime memberships or five year memberships while the top 10 referrers were given stock options. By January 2015, over 250,000 users had signed up for the service. Beta testers reported mixed reviews on the site's benefits.[3]
As of July 2015, the site had 4.5 million products available for sale.[6] After the beta period, the site officially launched on July 21, 2015.[3]
In November 2015, Jet.com raised $500 million in venture capital led by Fidelity.[7]
In May 2016, Jet.com was valued at $1.3 billion in its latest funding round.[8]
Competitors
Questions on various tech sites were raised concerning Jet's ability to deliver a service that can adequately distinguish itself from competition and gain market share in the eCommerce space. A comparison done by Wired with Amazon Mom did not suggest great savings were attained by shopping through Jet.[9]
Questions have been raised as to whether or not the site is able to scale as needed to attain significant market share and grow into a sustainable business.[10]
Features
One of the major distinguishing features of Jet is the "realtime pricing algorithm" which, according to cofounder Marc Lore, aims to gauge "the true marginal cost of getting that product to [customers]".[11] Items are priced based on location in distribution centers. If, for example, a user would like to purchase two items located in the same distribution center, the price would be low. If, however, the user, adds a third item located in a different distribution facility, the price increases.[11] If a user waives his/her right to return an item, the item also decreases in price. Paying in a less expensive form of payment, for example, debit over credit, allows the price to be decreased as well. The Jet membership also allows users to shop at partnering stores such as TigerDirect.com and Sony Store to shop for items.[12]
Though often compared to brick and mortar membership stores such as Sam's Club and Costco, Jet does not require the consumer to buy large quantities of the item to realize savings.
Jet Anywhere is a program that allows Jet users to spend money at other venues and earn "JetCash" which can be spent on the actual Jet site. Sites including Petco, Nike, and Anthropologie are currently participating in the program.[13]
Jet ran into some backlash after placing links to partnering sites without their permission in August 2015.[14] Brands such as Macy's, Wal-Mart, and Home Depot detached themselves from Jet because of the incident. Jet removed all the links to brands that requested removal. Jet's chief customer officer stated the brands that wished to be removed saw Jet as a competitor.[14]
Business model
Low prices are generated by the pricing algorithm which adjusts the price of the contents in the cart based on distribution centers the items come from.
A test done by The Wall Street Journal suggested Jet had a total loss of $242.91 on 12 items purchased by the newspaper.[6]
The Jet Partner program allows companies to sell their products on Jet's site by registering for an account and integrating the necessary application programming interface (API) components into their systems.[15] ChannelAdvisor and CommerceHub are official integration partners and help merchants who are not able to integrate directly via API, while for integration with Magento (Community Edition), there is a free module available at Magento Connect.[16][17] Approved merchants looking for a cost effective integration to Jet.com are also referred to InteList [18] and Zentail.[19]
References
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- ↑ Jet Takes Its Fight With Amazon to New Turf: Grocery Delivery Fortune, May 11, 2016
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- ↑ InteList – The Intelligent Product Listing API for Jet.com Marketplace By InteList, Retrieved 3rd May, 2016
- ↑ Lua error in package.lua at line 80: module 'strict' not found.
