5 ms·

Jet.com changes business plan, drops membership fee

61 points by swingbridge 11y ago

code4tee 11y ago
One can read between the lines quite easily that they likely didn't think they could get people to sign up for the monthly fee so their original projections must have been way off. Obviously they are trying to spin it a different way in the press. For such a huge bet to totally change its business plan at the last second is quite worrisome for the future of the company, especially since the CEO was boasting just a few months ago that this was a brilliant plan and the only way they would make money. Now they basically are just trying to go head to head with Amazon, but without the revenue stream Amazon has via Prime. I fail to see how that's not just doomed to be an incredibly expensive bust.
- vskarine 11y ago
  would appreciate if you could post a reference link to: "the CEO was boasting just a few months ago that this was a brilliant plan and the only way they would make money." Thanks!
  - code4tee 11y ago
    "We only profit from the $50 membership fee" http://www.cnbc.com/2015/07/21/our-prices-are-cheaper-than-amazon-jetcom-ceo.html http://www.cnbc.com/2015/07/21/our-prices-are-cheaper-than-a...
    - AndrewKemendo 11y ago
      Are all of the CNBC hosts that aggressive?
      - TheBiv 11y ago
        Yes, on average, they are fairly aggressive with the companies they invite on their shows. They are not as aggressive with the financiers they invite on their shows. I have no direct data points to back up those statements, they are simply my subjective thoughts from watching CNBC almost every day for the last 5 years.
  - mbesto 11y ago
    http://www.bloomberg.com/news/features/2015-01-07/amazon-bought-this-mans-company-now-hes-coming-for-them-correct http://www.bloomberg.com/news/features/2015-01-07/amazon-bou... http://techcrunch.com/2015/07/20/jet-com-takes-on-amazon-with-the-promise-of-lower-prices/#.vogjza:buf4 http://techcrunch.com/2015/07/20/jet-com-takes-on-amazon-wit... http://mashable.com/2015/07/26/jet-amazon/#iUf9d_VZngkr http://mashable.com/2015/07/26/jet-amazon/#iUf9d_VZngkr
    - pavornyoh 11y ago
      Wow.. In the article he seemed very confident. I can see this ending in a lot of tears unfortunately.
awakeasleep 11y ago
Changes their ALLEGED business plan. Jet's products seem almost universally more expensive than their counterparts anywhere else. We don't have any evidence they were really counting on that subscription income.
kulkarnic 11y ago
I just checked their site, and they act less like a hungry startup, and more like a don't-care near-monopoly. Three examples: - You can't see prices for many items without logging in. For a site that is geared towards price-conscious consumers, this is such a silly move. Alternatively, they consider login/registration as a worthwhile conversion (otherwise they could show you the price when you add something to cart.) - Yet, their registration page doesn't let you create an account with Facebook, Google or anything else. If you care about conversions, act like you care! - Their Help is an email address or a phone number. Seriously? No chat? No FAQ? Even Comcast has this figured out. If your LTCV is > $500, there is no reason to skimp on support when you don't have traction.
- powera 11y ago
  Or, nobody wants to buy anything from them, and they think that giving users a bad experience might engineer a different result.
- CodeWriter23 11y ago
  It's not just on the customer side. My mom, an Amazon seller, has been trying to get in to list her stuff since about two weeks after Jet went online. No response at all.
  - bdcravens 11y ago
    They were at Channel Advisor Catalyst, a trade show for e-commerce channels and services. We do shipping auditing and were exhibiting; they wouldn't give me much chance to chat with them. Not that they need to talk to me, but for the nature of the trade show, it felt like they were less interested in talking to vendors and potential partners (the point of that show) than press (since the show is b2b, not b2c)
- virtuabhi 11y ago
  For the first example, I think the sellers put this condition in the contract. They (sellers) do not want to publicize low prices. The second example is a valid point. Though I personally keep my social networks in their own box. In the third example, they have a phone number! I think most tech companies avoid displaying/having a phone number to contact. Can't comment much on if they don't look hungry. The founder has already sold one company to Amazon.
wangarific 11y ago
I wonder how the guy who used ads to got those 100,000 stock options feels. I was one of the folks who got a "lifetime membership" to Jet which I already knew was worthless once I saw the prices on the site, but I also didn't spend money to get my "lifetime membership."
manigandham 11y ago
Interesting as the membership fee was their primary/only way of making money by doing everything else at cost or at a loss to gain advantage. There's always space for more ecommerce companies but this feels an awful lot like the VC subsidized pets.com bubble.
- code4tee 11y ago
  Especially since the "lower prices" they boast of have been shown to be mostly fake. i.e., They just buy the stuff at a higher price elsewhere and resell it at a lower price. There's burning VC cash and then there's burning VC cash!
  - dexterdog 11y ago
    Are things really cheaper? I never saw any prices that made me want to buy.
- PantaloonFlames 11y ago
  BTW, this is basically Costco's model. They do make some money on goods sold, but most of the profit for the company comes from membership fees.
  - bhouston 11y ago
    Costco has 81M members or so, at $50/yr that is around $4B/yr total in membership revenue. Their profit in the last year was $2.3B. Thus you are correct, Costco would lose money if they didn't charge membership fees. Costco's profit is actually really low. $115B in sales with $2.3B in net income, so ~2% profit margin. I guess they really do have low prices. Walmart for comparison has a 3.3% profit margin in the last year on $445B in sales. Amazon has a -0.3% profit margin on $88B of sales.
sperling75 11y ago
It's never wise to boast as a startup regardless of your funding and prior success. I get the vibe that they expect success. This is such a terribly bad mindset to approach a new venture with. Starting with that much funding is as much a liability as a guarantee of winning a market.
powera 11y ago
Weren't they were giving away a free membership for a limited time? Now, the membership is always free. I'm not sure if they "discovered" that free is the right price for membership, or if the "giving away" part was always just a marketing gimmick / viral growth motivator. Did anybody ever actually pay for a Jet membership? edit: I might be mis-remembering what their initial marketing was, but this feels like part of a strategy to never really make any money from charging for membership.
- dexterdog 11y ago
  Probably not but I think the problem was that many people signed up as I did and never really found a reason to even make that first purchase.
ghuntley 11y ago
Interesting fact that most people might not know - Jet.com is powered by .NET specifically F#! http://techgroup.jet.com/blog/2015/03-22-on-how-jet-chose/ http://techgroup.jet.com/blog/2015/03-22-on-how-jet-chose/
- melling 11y ago
  There was a good discussion about it a couple of months ago: https://news.ycombinator.com/item?id=9971412 https://news.ycombinator.com/item?id=9971412
- p4wnc6 11y ago
  There's not much to glean from that link. I'm always excited to hear things like this, and I was very excited to hear that Jet was committing to F#. I'm not a fan of heavy enterprisey dev environments, but F# is a great language. How great it would be if more organizations came out strong for functional programming. But I have heard some about the software hiring practices at Jet and what I've heard makes me highly skeptical that they could actually be using proper functional programming techniques. It's disappointing -- someone using F# because it's vaguely "better C#" -- similar to people using Scala or Clojure because it's "better Java". Sometimes I think they heavy advertisements ("Hey look we're so cool we use functional programming") is more meant to sucker people in under the belief that once the business stabilizes, it will be some sort of Bell Labs of ____ where the company will really try to invest in high-end software solutions and research, and that a lot of it will be carried out with functional programming. But the reality is that it's more of just a hiring tactic and a tech status grab. Maybe you can convince people on the fringe of functional programming to accept less pay for the lure of getting to learn a functional language? Maybe it's worth it if you get on-average higher quality developers because of the affinity for vague association with functional programming? Of course it's possible that they really do use F# and that the overall system has been architected well with functional principles. I don't get that sense from the linked blog post or from the overall progress of their online services.
  - ghuntley 11y ago
    Maybe you can convince people on the fringe of functional programming to accept less pay for the lure of getting to learn a functional language? Maybe it's worth it if you get on-average higher quality developers because of the affinity for vague association with functional programming? There's a bunch of quality .NET developers that regularly come to the Sydney F# meetup which would imho defect in a heartbeat. Definate yes on the lure for on-average higher quality developers and potentially yes for less money. Hiring directly from Meetups is the exact strategy Walmart Labs did w/nodejs to obtain quality talent that otherwise would not have considered them (Walmart [has|had] a image problem) - http://todogroup.org/blog/why-we-run-an-open-source-program-walmart-labs/ http://todogroup.org/blog/why-we-run-an-open-source-program-...
post_break 11y ago
Everything I was about to purchase from Jet was more expensive than Amazon, even without prime. I unsubscribed from their emails and gave up with them.
- bsdpython 11y ago
  There must be a heavy price difference depending on location because for me I was able to find many things that were 10% or more cheaper than Amazon. I ordered a blender for nearly half the price of the same model on Amazon for example.
  - post_break 11y ago
    Everything I looked at was technology or electronics. I don't really buy anything else on Amazon to be honest. You got an amazing deal though holy crap.
  - deleted 11y ago
    [deleted]
princetontiger 11y ago
These guys suck... All the products are way more expensive than on Amazon.
pavornyoh 11y ago
>But Marc Lore, the company’s chief executive, said in a blog post that customer response to Jet over a three-month free trial period had exceeded expectations. The average amount of items per order was twice what it expected, for instance, he said. So if it exceeded expectations, why do away with the membership fees? And they raised more than $200 million? Just interesting.
- volaski 11y ago
  i guess the number of orders was less than half of what it expected haha
  - pavornyoh 11y ago
    @Volaski, I suppose. But how did they raise that massive amount of money without a single customer? I am curious to know how much everyone employed there is making.
    - AndrewKemendo 11y ago
      Raising money is marginally related to how many customers you have. The most important thing in raising money is the personal connections of the person raising it. In this case a "serial entrepreneur" with multiple high dollar value exits.
      - pavornyoh 11y ago
        @AndrewKemendo, you are right with your post. Time will tell if we are wrong in this thread about jet.com.
baddox 11y ago
Jet has been pretty great for me in San Francisco, but I hadn't thought it would be worth the membership fee unless you live in a bigger home with a family or roommates (I live in a studio). It's pretty great for household stuff, medicinal items, and name brand packaged food, not necessarily because it has cheaper unit prices than Amazon (I haven't actually checked), but because you can get smaller quantities of things than you usually can from Amazon Prime. I also found a few pretty good deals on other items.
dangrossman 11y ago
I ordered a new wifi router from Jet.com yesterday. It was cheaper than Amazon, then there was a coupon on the site for another $15 off the order. It shipped free and arrived this morning. Based on the packaging, it appears they bought it from a Newegg marketplace seller and had them ship it to me. I have to doubt they made any money on that order, but from the consumer side I got a great deal and will be checking jet.com alongside amazon.com any time I shop online.
gmantom 11y ago
Many of the comments on here are pretty negative. I'm pretty sure it is partly because most startups are started in some Garage without 250 million in runway. That doesn't mean this won't work. The fact that they are in New York/New Jersey and not in San Francisco might be another reason but that also does not mean this won't work. Just because you can't understand it does not mean it won't work, in fact it probably means it's more likely to work. http://techcrunch.com/2015/09/11/a-month-after-launch-discount-shopping-site-jet-com-becomes-4-marketplace/#.7mel8w:SgFf http://techcrunch.com/2015/09/11/a-month-after-launch-discou... They already passed some big names in this space. They are clearly doing something right. The near 100% growth month over month they quoted today on some of these articles is also pretty good indication that things are probably working, the fact that they had a reported million dollars in sales in their first day of opening the site is probably another good indication that they might be onto something. http://recode.net/2015/07/22/jet-the-new-amazon-competitor-hits-1-million-in-sales-on-launch-day/ http://recode.net/2015/07/22/jet-the-new-amazon-competitor-h... It's too hard to tell with these kinds of things but this is a smart decision to not lock themselves into a Prime/Costco only model and certainly not an indication that things aren't going to work. They have only actually launched and been live for two or three months their trial memberships were probably not even up yet considering they gave everyone like six months or a year free.
- powera 11y ago
  Yes, it's negative. Investing two hundred and fifty million dollars in something that seems to have no business model other than giving money away is the exact opposite to the YC philosophy of starting companies. And the signs you claim mean they are "doing something right" I claim are only signs that they're spending 250 million dollars. And remember Carl Sagan: "They laughed at Columbus, they laughed at Fulton, they laughed at the Wright brothers. But they also laughed at Bozo the Clown."
- swingbridge 11y ago
  The point is that they now have no clear path to be a real business. The growth figures you point to are irrelevant when you read the articles about how they are actually doing sales. Anyone can buy stuff and sell it for less than they bought it for and use VC money to make up the difference. People will buy as much as they can from such a sucker until the game runs out. Their original business plan was crazy ambitious but if they pulled it off (i.e. Got enough subscribers to make a profit) it was theoretically possible. Now there's no clear plan. They have to compete with Amazon, a company that barely makes any money on retail despite having like 40+ million people paying $100 a year to subscribe to the site. They're spending crazy sums of money blasting into a market where there is no "money left on the table." Business 101 says that's a suicide mission.
pravda 11y ago
I had never visited Jet.com until I needed another pair of shoes. The shoes I buy are normally $100 - 20%, at Shoebuy.com. Total was $83 shipped back in 2013. Was all prepared to buy them at Shoebuy.com, then Jet.com came up in Google shopping search. Same shoes, $60 at Jet.com. Coffee filters. Normally pay $3.69 for 100. Two bags of 400 filters (800 filters total) was $7.18 from Jet. Cat treats. The big 6.3oz bags of treats are about $3.50 at stores. Got three bags for $5.37. This company will not be in business very long. Go there and find stuff to buy!
- hyperbovine 11y ago
  Second that. I discovered this company less than a week ago when I needed a new bike tire. They were 35% cheaper than every other retailer. I know for a fact that the amount I paid is well below the wholesale price for that item. Shipping was free. It's like 1999 all over again. If bubble-crazed VCs want to flush their money down the toilet, who am I to stop them?
  - grantc 11y ago
    They're buying much of their selection from another retailer after you purchase at retail pricing. I can't find the article but someone figured out at launch that they were fufilling many orders at 2-5X the actual price sold (only cost of goods sold... not including shipping and logistics). They'll burn through half a unicorn in a year or so.
xirdstl 11y ago
The problems I had when trying jet.com were that they didn't have a lot of the things I was looking for, and when they did, it was the same price as ordered from Amazon Prime. That being said, I'll look again now with this announcement. I'm not sure what their play is now without the membership fee. Like some of the other posts, my take is just to use their service to grab some discounts until they've burned through investor money. Cynically I think this is rolling the dice to try to achieve some critical mass of users in the hope of being bought by someone like Amazon.
bdcravens 11y ago
That was fast. I met them pre-launch at Channel Advisor Catalyst earlier this year. Wouldn't it make sense to at least go a year? They had a fancy booth, fancy swag, and they have a fancy website. No traction?
synweap15 11y ago
I'm just curious, any success stories where business dropped membership fees or started offering free plans instead of starting with free plans and later switching them off?

61 points by swingbridge 11y ago

One can read between the lines quite easily that they likely didn't think they could get people to sign up for the monthly fee so their original projections must have been way off. Obviously they are trying to spin it a different way in the press. For such a huge bet to totally change its business plan at the last second is quite worrisome for the future of the company, especially since the CEO was boasting just a few months ago that this was a brilliant plan and the only way they would make money. Now they basically are just trying to go head to head with Amazon, but without the revenue stream Amazon has via Prime. I fail to see how that's not just doomed to be an incredibly expensive bust.

vskarine 11y ago
would appreciate if you could post a reference link to: "the CEO was boasting just a few months ago that this was a brilliant plan and the only way they would make money." Thanks!
- code4tee 11y ago
  "We only profit from the $50 membership fee" http://www.cnbc.com/2015/07/21/our-prices-are-cheaper-than-amazon-jetcom-ceo.html http://www.cnbc.com/2015/07/21/our-prices-are-cheaper-than-a...
  - AndrewKemendo 11y ago
    Are all of the CNBC hosts that aggressive?
    - TheBiv 11y ago
      Yes, on average, they are fairly aggressive with the companies they invite on their shows. They are not as aggressive with the financiers they invite on their shows. I have no direct data points to back up those statements, they are simply my subjective thoughts from watching CNBC almost every day for the last 5 years.
- mbesto 11y ago
  http://www.bloomberg.com/news/features/2015-01-07/amazon-bought-this-mans-company-now-hes-coming-for-them-correct http://www.bloomberg.com/news/features/2015-01-07/amazon-bou... http://techcrunch.com/2015/07/20/jet-com-takes-on-amazon-with-the-promise-of-lower-prices/#.vogjza:buf4 http://techcrunch.com/2015/07/20/jet-com-takes-on-amazon-wit... http://mashable.com/2015/07/26/jet-amazon/#iUf9d_VZngkr http://mashable.com/2015/07/26/jet-amazon/#iUf9d_VZngkr
  - pavornyoh 11y ago
    Wow.. In the article he seemed very confident. I can see this ending in a lot of tears unfortunately.

awakeasleep 11y ago

Changes their ALLEGED business plan. Jet's products seem almost universally more expensive than their counterparts anywhere else. We don't have any evidence they were really counting on that subscription income.

kulkarnic 11y ago

I just checked their site, and they act less like a hungry startup, and more like a don't-care near-monopoly. Three examples: - You can't see prices for many items without logging in. For a site that is geared towards price-conscious consumers, this is such a silly move. Alternatively, they consider login/registration as a worthwhile conversion (otherwise they could show you the price when you add something to cart.) - Yet, their registration page doesn't let you create an account with Facebook, Google or anything else. If you care about conversions, act like you care! - Their Help is an email address or a phone number. Seriously? No chat? No FAQ? Even Comcast has this figured out. If your LTCV is > $500, there is no reason to skimp on support when you don't have traction.

powera 11y ago
Or, nobody wants to buy anything from them, and they think that giving users a bad experience might engineer a different result.
CodeWriter23 11y ago
It's not just on the customer side. My mom, an Amazon seller, has been trying to get in to list her stuff since about two weeks after Jet went online. No response at all.
- bdcravens 11y ago
  They were at Channel Advisor Catalyst, a trade show for e-commerce channels and services. We do shipping auditing and were exhibiting; they wouldn't give me much chance to chat with them. Not that they need to talk to me, but for the nature of the trade show, it felt like they were less interested in talking to vendors and potential partners (the point of that show) than press (since the show is b2b, not b2c)
virtuabhi 11y ago
For the first example, I think the sellers put this condition in the contract. They (sellers) do not want to publicize low prices. The second example is a valid point. Though I personally keep my social networks in their own box. In the third example, they have a phone number! I think most tech companies avoid displaying/having a phone number to contact. Can't comment much on if they don't look hungry. The founder has already sold one company to Amazon.

wangarific 11y ago

I wonder how the guy who used ads to got those 100,000 stock options feels. I was one of the folks who got a "lifetime membership" to Jet which I already knew was worthless once I saw the prices on the site, but I also didn't spend money to get my "lifetime membership."

manigandham 11y ago

Interesting as the membership fee was their primary/only way of making money by doing everything else at cost or at a loss to gain advantage. There's always space for more ecommerce companies but this feels an awful lot like the VC subsidized pets.com bubble.

code4tee 11y ago
Especially since the "lower prices" they boast of have been shown to be mostly fake. i.e., They just buy the stuff at a higher price elsewhere and resell it at a lower price. There's burning VC cash and then there's burning VC cash!
- dexterdog 11y ago
  Are things really cheaper? I never saw any prices that made me want to buy.
PantaloonFlames 11y ago
BTW, this is basically Costco's model. They do make some money on goods sold, but most of the profit for the company comes from membership fees.
- bhouston 11y ago
  Costco has 81M members or so, at $50/yr that is around $4B/yr total in membership revenue. Their profit in the last year was $2.3B. Thus you are correct, Costco would lose money if they didn't charge membership fees. Costco's profit is actually really low. $115B in sales with $2.3B in net income, so ~2% profit margin. I guess they really do have low prices. Walmart for comparison has a 3.3% profit margin in the last year on $445B in sales. Amazon has a -0.3% profit margin on $88B of sales.

sperling75 11y ago

It's never wise to boast as a startup regardless of your funding and prior success. I get the vibe that they expect success. This is such a terribly bad mindset to approach a new venture with. Starting with that much funding is as much a liability as a guarantee of winning a market.

powera 11y ago

Weren't they were giving away a free membership for a limited time? Now, the membership is always free. I'm not sure if they "discovered" that free is the right price for membership, or if the "giving away" part was always just a marketing gimmick / viral growth motivator. Did anybody ever actually pay for a Jet membership? edit: I might be mis-remembering what their initial marketing was, but this feels like part of a strategy to never really make any money from charging for membership.

dexterdog 11y ago
Probably not but I think the problem was that many people signed up as I did and never really found a reason to even make that first purchase.

ghuntley 11y ago

Interesting fact that most people might not know - Jet.com is powered by .NET specifically F#! http://techgroup.jet.com/blog/2015/03-22-on-how-jet-chose/ http://techgroup.jet.com/blog/2015/03-22-on-how-jet-chose/

melling 11y ago
There was a good discussion about it a couple of months ago: https://news.ycombinator.com/item?id=9971412 https://news.ycombinator.com/item?id=9971412
p4wnc6 11y ago
There's not much to glean from that link. I'm always excited to hear things like this, and I was very excited to hear that Jet was committing to F#. I'm not a fan of heavy enterprisey dev environments, but F# is a great language. How great it would be if more organizations came out strong for functional programming. But I have heard some about the software hiring practices at Jet and what I've heard makes me highly skeptical that they could actually be using proper functional programming techniques. It's disappointing -- someone using F# because it's vaguely "better C#" -- similar to people using Scala or Clojure because it's "better Java". Sometimes I think they heavy advertisements ("Hey look we're so cool we use functional programming") is more meant to sucker people in under the belief that once the business stabilizes, it will be some sort of Bell Labs of ____ where the company will really try to invest in high-end software solutions and research, and that a lot of it will be carried out with functional programming. But the reality is that it's more of just a hiring tactic and a tech status grab. Maybe you can convince people on the fringe of functional programming to accept less pay for the lure of getting to learn a functional language? Maybe it's worth it if you get on-average higher quality developers because of the affinity for vague association with functional programming? Of course it's possible that they really do use F# and that the overall system has been architected well with functional principles. I don't get that sense from the linked blog post or from the overall progress of their online services.
- ghuntley 11y ago
  Maybe you can convince people on the fringe of functional programming to accept less pay for the lure of getting to learn a functional language? Maybe it's worth it if you get on-average higher quality developers because of the affinity for vague association with functional programming? There's a bunch of quality .NET developers that regularly come to the Sydney F# meetup which would imho defect in a heartbeat. Definate yes on the lure for on-average higher quality developers and potentially yes for less money. Hiring directly from Meetups is the exact strategy Walmart Labs did w/nodejs to obtain quality talent that otherwise would not have considered them (Walmart [has|had] a image problem) - http://todogroup.org/blog/why-we-run-an-open-source-program-walmart-labs/ http://todogroup.org/blog/why-we-run-an-open-source-program-...

post_break 11y ago

Everything I was about to purchase from Jet was more expensive than Amazon, even without prime. I unsubscribed from their emails and gave up with them.

bsdpython 11y ago
There must be a heavy price difference depending on location because for me I was able to find many things that were 10% or more cheaper than Amazon. I ordered a blender for nearly half the price of the same model on Amazon for example.
- post_break 11y ago
  Everything I looked at was technology or electronics. I don't really buy anything else on Amazon to be honest. You got an amazing deal though holy crap.
- deleted 11y ago
  [deleted]

princetontiger 11y ago

These guys suck... All the products are way more expensive than on Amazon.

pavornyoh 11y ago

>But Marc Lore, the company’s chief executive, said in a blog post that customer response to Jet over a three-month free trial period had exceeded expectations. The average amount of items per order was twice what it expected, for instance, he said. So if it exceeded expectations, why do away with the membership fees? And they raised more than $200 million? Just interesting.

volaski 11y ago
i guess the number of orders was less than half of what it expected haha
- pavornyoh 11y ago
  @Volaski, I suppose. But how did they raise that massive amount of money without a single customer? I am curious to know how much everyone employed there is making.
  - AndrewKemendo 11y ago
    Raising money is marginally related to how many customers you have. The most important thing in raising money is the personal connections of the person raising it. In this case a "serial entrepreneur" with multiple high dollar value exits.
    - pavornyoh 11y ago
      @AndrewKemendo, you are right with your post. Time will tell if we are wrong in this thread about jet.com.

baddox 11y ago

Jet has been pretty great for me in San Francisco, but I hadn't thought it would be worth the membership fee unless you live in a bigger home with a family or roommates (I live in a studio). It's pretty great for household stuff, medicinal items, and name brand packaged food, not necessarily because it has cheaper unit prices than Amazon (I haven't actually checked), but because you can get smaller quantities of things than you usually can from Amazon Prime. I also found a few pretty good deals on other items.

dangrossman 11y ago

I ordered a new wifi router from Jet.com yesterday. It was cheaper than Amazon, then there was a coupon on the site for another $15 off the order. It shipped free and arrived this morning. Based on the packaging, it appears they bought it from a Newegg marketplace seller and had them ship it to me. I have to doubt they made any money on that order, but from the consumer side I got a great deal and will be checking jet.com alongside amazon.com any time I shop online.

gmantom 11y ago

Many of the comments on here are pretty negative. I'm pretty sure it is partly because most startups are started in some Garage without 250 million in runway. That doesn't mean this won't work. The fact that they are in New York/New Jersey and not in San Francisco might be another reason but that also does not mean this won't work. Just because you can't understand it does not mean it won't work, in fact it probably means it's more likely to work. http://techcrunch.com/2015/09/11/a-month-after-launch-discount-shopping-site-jet-com-becomes-4-marketplace/#.7mel8w:SgFf http://techcrunch.com/2015/09/11/a-month-after-launch-discou... They already passed some big names in this space. They are clearly doing something right. The near 100% growth month over month they quoted today on some of these articles is also pretty good indication that things are probably working, the fact that they had a reported million dollars in sales in their first day of opening the site is probably another good indication that they might be onto something. http://recode.net/2015/07/22/jet-the-new-amazon-competitor-hits-1-million-in-sales-on-launch-day/ http://recode.net/2015/07/22/jet-the-new-amazon-competitor-h... It's too hard to tell with these kinds of things but this is a smart decision to not lock themselves into a Prime/Costco only model and certainly not an indication that things aren't going to work. They have only actually launched and been live for two or three months their trial memberships were probably not even up yet considering they gave everyone like six months or a year free.

powera 11y ago
Yes, it's negative. Investing two hundred and fifty million dollars in something that seems to have no business model other than giving money away is the exact opposite to the YC philosophy of starting companies. And the signs you claim mean they are "doing something right" I claim are only signs that they're spending 250 million dollars. And remember Carl Sagan: "They laughed at Columbus, they laughed at Fulton, they laughed at the Wright brothers. But they also laughed at Bozo the Clown."
swingbridge 11y ago
The point is that they now have no clear path to be a real business. The growth figures you point to are irrelevant when you read the articles about how they are actually doing sales. Anyone can buy stuff and sell it for less than they bought it for and use VC money to make up the difference. People will buy as much as they can from such a sucker until the game runs out. Their original business plan was crazy ambitious but if they pulled it off (i.e. Got enough subscribers to make a profit) it was theoretically possible. Now there's no clear plan. They have to compete with Amazon, a company that barely makes any money on retail despite having like 40+ million people paying $100 a year to subscribe to the site. They're spending crazy sums of money blasting into a market where there is no "money left on the table." Business 101 says that's a suicide mission.

pravda 11y ago

I had never visited Jet.com until I needed another pair of shoes. The shoes I buy are normally $100 - 20%, at Shoebuy.com. Total was $83 shipped back in 2013. Was all prepared to buy them at Shoebuy.com, then Jet.com came up in Google shopping search. Same shoes, $60 at Jet.com. Coffee filters. Normally pay $3.69 for 100. Two bags of 400 filters (800 filters total) was $7.18 from Jet. Cat treats. The big 6.3oz bags of treats are about $3.50 at stores. Got three bags for $5.37. This company will not be in business very long. Go there and find stuff to buy!

hyperbovine 11y ago
Second that. I discovered this company less than a week ago when I needed a new bike tire. They were 35% cheaper than every other retailer. I know for a fact that the amount I paid is well below the wholesale price for that item. Shipping was free. It's like 1999 all over again. If bubble-crazed VCs want to flush their money down the toilet, who am I to stop them?
- grantc 11y ago
  They're buying much of their selection from another retailer after you purchase at retail pricing. I can't find the article but someone figured out at launch that they were fufilling many orders at 2-5X the actual price sold (only cost of goods sold... not including shipping and logistics). They'll burn through half a unicorn in a year or so.

xirdstl 11y ago

The problems I had when trying jet.com were that they didn't have a lot of the things I was looking for, and when they did, it was the same price as ordered from Amazon Prime. That being said, I'll look again now with this announcement. I'm not sure what their play is now without the membership fee. Like some of the other posts, my take is just to use their service to grab some discounts until they've burned through investor money. Cynically I think this is rolling the dice to try to achieve some critical mass of users in the hope of being bought by someone like Amazon.

bdcravens 11y ago

That was fast. I met them pre-launch at Channel Advisor Catalyst earlier this year. Wouldn't it make sense to at least go a year? They had a fancy booth, fancy swag, and they have a fancy website. No traction?

synweap15 11y ago

I'm just curious, any success stories where business dropped membership fees or started offering free plans instead of starting with free plans and later switching them off?