Jet Setting with E-Commerce Start-Up Jet.com
The age of digital disruption continues with the launch of e-commerce start-up Jet.com. At first glance the subscription-based discount platform varies little from the well-established, club-based model pioneered by Costco nearly 40 years ago. Members pay a fee to join and enjoy deep discounts, while the retailer aims to break even on product sales and earn its profit from membership fees.
But Jet.com has added a unique twist. Thanks to its distinctive dynamic pricing engine shoppers receive personalized pricing based on what they have already placed in their cart. Jet is looking to bring the old clichÉ — The More You Buy the More You Save — to life, by leveraging bulk shipping costs on large customer orders.
Once Jet knows what the shopper plans to purchase and the final destination of the order, its sophisticated algorithm is able to calculate the fulfillment savings of adding additional items to the cart and passes those savings onto the customer. The more items the customer places in the cart, and the closer they are to the product, the greater the savings. Currently Jet has fulfillment centers in New Jersey, Kansas and Nevada with more on the way, as it plans to scale up over the next five years.
Founder and CEO Marc Lore made his name as the CEO of Quidsi, the company that launched Diapers.com, Soap.com and Wag.com — he sold his brainchild to Amazon five years ago for over a half a billion dollars. Now he is taking aim at the purchaser of his previous creation with the launch of Jet. If all goes according to plan the e-commerce site will be disrupting Amazon’s business, just as the e-commerce giant has been disrupting nearly everyone else’s for two decades.
Lore has gone on the record in a recent CNBC interview stating that he expects Jet to lose hundreds of millions of dollars over the next five years as it builds the deep assortment and shopper base necessary to compete with Amazon. Will Jet ever reach the $20 billion in annual sales Lore predicts will be necessary to turn a profit? That remains to be seen. But rest assured if Jet shows signs of liftoff, buyout offers won’t be far behind, with Amazon at the front of the line.
But Jet.com has added a unique twist. Thanks to its distinctive dynamic pricing engine shoppers receive personalized pricing based on what they have already placed in their cart. Jet is looking to bring the old clichÉ — The More You Buy the More You Save — to life, by leveraging bulk shipping costs on large customer orders.
Once Jet knows what the shopper plans to purchase and the final destination of the order, its sophisticated algorithm is able to calculate the fulfillment savings of adding additional items to the cart and passes those savings onto the customer. The more items the customer places in the cart, and the closer they are to the product, the greater the savings. Currently Jet has fulfillment centers in New Jersey, Kansas and Nevada with more on the way, as it plans to scale up over the next five years.
Founder and CEO Marc Lore made his name as the CEO of Quidsi, the company that launched Diapers.com, Soap.com and Wag.com — he sold his brainchild to Amazon five years ago for over a half a billion dollars. Now he is taking aim at the purchaser of his previous creation with the launch of Jet. If all goes according to plan the e-commerce site will be disrupting Amazon’s business, just as the e-commerce giant has been disrupting nearly everyone else’s for two decades.
Lore has gone on the record in a recent CNBC interview stating that he expects Jet to lose hundreds of millions of dollars over the next five years as it builds the deep assortment and shopper base necessary to compete with Amazon. Will Jet ever reach the $20 billion in annual sales Lore predicts will be necessary to turn a profit? That remains to be seen. But rest assured if Jet shows signs of liftoff, buyout offers won’t be far behind, with Amazon at the front of the line.