Jet.com could be the challenger Amazon has finally been waiting for.It’s the brainchild of Marc Lore, who started Diapers.com and eventually sold it to Amazon.com.
In February, Jet.com has raised $140 million and more recently one of it’s mystery ‘strategic’ investors was named as being Alibaba. (fyi – Alibaba have also invested in Uber competitor Lyft, e-comm delivery company Shopprunner and TV remote app Peal).
Jet.com is essentially Costco on the web. You pay a $50 membership fee and get access to the best prices. Just like Costco, all it’s profit will come from membership.
The site is yet to go public, but was launched privately during the week to 10,000 people. One of these people was Recode’s Jason Del Rey, here’s what he had to say:
“I compared prices between Jet and Amazon, and Jet won. But let’s get this out of the way: It’s going to be very hard for Jet to convert Amazon Prime members to Jet membership…
First, Amazon sells hundreds of millions of products Jet sells five million products today and will offer 10 million by the time it launches. Secondly, Prime has no delivery minimum…Jet’s free-shipping minimum is $35 and it charges $5.99 for orders under that threshold. Also, Prime… (has a) two-day guaranteed delivery. Some Jet.com products — like diapers, toilet paper and cereal — will be delivered in one to two days. Other stuff, like clothes and electronics, will take two to five days to arrive.”
But aside from Amazon Prime members, here’s the deal. He compared 5 items and this is what he found:
“Jet’s price was the best… because the one item that was cheaper on Amazon carried a mandatory $9.99 shipping charge that would make the order more expensive. Jet’s total price for the entire order was significantly better, too, thanks in large part to a big discount on a TV.”
Jet.com is an interesting concept. But, maybe instead of wondering if it will beat Amazon the question is really – why aren’t Costco doing this? It’s a great concept to take online and has customer appeal. Stay tuned for it’s launch.
Check out jet here: https://jet.com/