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Jet.com was founded in 2014. How did they get enough traction to be viable when there are so many other online retailers like Amazon, and all the other brick an

by _RPM 10y ago

Jet.com was founded in 2014. How did they get enough traction to be viable when there are so many other online retailers like Amazon, and all the other brick and mortar retailers that also have large online presence.

ikeboy 10y ago
Prominent founder who previously sold a company to Amazon for half a billion, and a whole lot of funding.
deleted 10y ago
[deleted]
morgante 10y ago
Basically, a prominent founder who had previously battled Amazon. That led to a ton of funding which allowed for extremely aggressive marketing and customer acquisition, not to mention plenty of media coverage. If anyone can battle Amazon, it's probably Jet. I can see why Walmart would want Jet (and Marc) in their camp.
- rogerdpack 10y ago
  They've actually done very well with "hype" as it were. I guess this goes to show that you too can spend tons of VC dollars, make yourself "popular" and never make any money, but the popularity is enough to make you worth money, even though you're losing money. Fascinating. I almost wonder if they should sell now, just in case they run out of VC "at some point in the near future" and stuff hits the fan...or maybe they'll be "worth" far more in the future, hard to tell...
  - niftich 10y ago
    This has worked with chat apps and other kinds of community-based social networks for ages, where the promise that after you've grown large, you'll figure out a way to monetize later. What's remarkable is Jet was able to pull this off by being in meatspace, by acting as a VC-subsidized arbitrage broker for consumer products, hoping to get enough mindshare to be considered more of a threat than a nuisance so it can get bought out. It worked!
  - morgante 10y ago
    > I guess this goes to show that you too I'd be careful about drawing too many conclusions from this story. For one thing, you are not Marc Lore. With a successful Amazon sale under his belt, he certainly had a leg up on fundraising over almost anyone. His name alone helped to generate buzz. But even being Marc Lore is enough. I worked for his cofounder from diapers.com and you've probably never even heard of that company—building hype requires a compelling narrative, not just a big name.
    - honkhonkpants 10y ago
      Never heard of diapers.com? No way. That site was/is incredible. Soap.com is still to this day how I go shopping on Amazon.
      - morgante 10y ago
        No, I meant you've probably never heard of his subsequent company (somespider.com), where I was the first employee.
  - cookiecaper 10y ago
    It's just a misunderstanding of what the acquiring company is actually buying. When a company acquires a startup, they're doing it so they can get control over that startup's users. They really don't care about the technical or financial details, they just want authority over those millions of eyeballs.
- z6 10y ago
  I'd love to see their return customer number. If you hand out money, user acquisition if measured by signups is pretty meaningless. I tried this site once and it was a disastrous experience. Their customer service is horrendous, and the complete opposite of Amazon. After that purchase it became pretty clear to me that Amazon has nothing to worry about. This reminds me, I have around $100 in credits from 1 failed order because they messed up multiple times. Would be awesome if they sold Amazon gift cards.
chris11 10y ago
I think they've been spending a lot of money getting new users. They've been offering new accounts discounts, I think you can get 15% to 20% off right now. They've had a bunch of items show up on some discount shopping forums like slickdeals. I think they've lost money on some purchases.
- joezydeco 10y ago
  Just got a flyer in the mail offering $10 off my next 3 purchases. That's not cheap.
  - chris11 10y ago
    Yeah, I even remember a rumor going around that they were dropshipping for some items. If something was out of stock they would get it from newegg or amazon and send it to you.
    - was_boring 10y ago
      That's no rumor, it's actually what they do. https://hbr.org/2015/07/the-problems-with-jet-coms-pricing-model https://hbr.org/2015/07/the-problems-with-jet-coms-pricing-m...
    - imcqueen 10y ago
      I have a theory about this, it happened to us when we bought some childrens books on Jet. They came in the mail from Barnes and Noble with a packing slip that had a price higher than we paid included with it. It doesn't explain the Amazon example you mentioned, but I was under the impression they have special affiliate arrangements with 3rd party retailers and that they were somehow being allowed to invest their affiliate commissions into the consumer (which is typically not allowed). So if they're making 15% affiliate commissions from B&N they're able to drop the consumer price 10%. They've been focused on scale more than margin since day 1, so it would make sense that they would just operate on something razor thin and continue to drive home that they have unbeatable prices. For the 3rd party retailers it's a way to compete with AMZN on price without actually having to drop their prices and I can see how that would be attractive to a retailer that's losing market share. No basis for this, just one man's theory.
chirau 10y ago
They raise about $820 million and just spent virtually all of it, outside of operating expenses on marketing. For almost a year, they were advertising everywhere before they had even launched. If i am not mistaken, i think they were boasting of the highest number of pre-launch signups for any company. So that already gave them a huge valuation and potential traction. They eventually launched, with a mixed reception, but they had enough numbers to keep them relevant.
- deleted 10y ago
  [deleted]
flinty 10y ago
The founder has a lot of ecommerce experience. Sold diapers.com for ~600 mill to amazon and had other similar ventures
jpatel3 10y ago
Advertisement, and marketing dollar. I have tried to look for items on it, but expectations are so high after using Amazon.
ComteDeLaFere 10y ago
I've often wondered about this. Each time I've compared Jet against prices from other retailers, the results have been underwhelming. Occasionally someone mentions a slightly better deal on Jet, but nothing that would rationalize the hype around this company. I'm assuming that Jet was just intended to be a short term play, ending with a float to an established retailer.
- brianwawok 10y ago
  Most of the sellers are the same. Same sellers, same costs.. how much cheaper could it be outside of special deals?

by _RPM 10y ago

ikeboy 10y ago

Prominent founder who previously sold a company to Amazon for half a billion, and a whole lot of funding.

deleted 10y ago

[deleted]

morgante 10y ago

Basically, a prominent founder who had previously battled Amazon. That led to a ton of funding which allowed for extremely aggressive marketing and customer acquisition, not to mention plenty of media coverage. If anyone can battle Amazon, it's probably Jet. I can see why Walmart would want Jet (and Marc) in their camp.

rogerdpack 10y ago
They've actually done very well with "hype" as it were. I guess this goes to show that you too can spend tons of VC dollars, make yourself "popular" and never make any money, but the popularity is enough to make you worth money, even though you're losing money. Fascinating. I almost wonder if they should sell now, just in case they run out of VC "at some point in the near future" and stuff hits the fan...or maybe they'll be "worth" far more in the future, hard to tell...
- niftich 10y ago
  This has worked with chat apps and other kinds of community-based social networks for ages, where the promise that after you've grown large, you'll figure out a way to monetize later. What's remarkable is Jet was able to pull this off by being in meatspace, by acting as a VC-subsidized arbitrage broker for consumer products, hoping to get enough mindshare to be considered more of a threat than a nuisance so it can get bought out. It worked!
- morgante 10y ago
  > I guess this goes to show that you too I'd be careful about drawing too many conclusions from this story. For one thing, you are not Marc Lore. With a successful Amazon sale under his belt, he certainly had a leg up on fundraising over almost anyone. His name alone helped to generate buzz. But even being Marc Lore is enough. I worked for his cofounder from diapers.com and you've probably never even heard of that company—building hype requires a compelling narrative, not just a big name.
  - honkhonkpants 10y ago
    Never heard of diapers.com? No way. That site was/is incredible. Soap.com is still to this day how I go shopping on Amazon.
    - morgante 10y ago
      No, I meant you've probably never heard of his subsequent company (somespider.com), where I was the first employee.
- cookiecaper 10y ago
  It's just a misunderstanding of what the acquiring company is actually buying. When a company acquires a startup, they're doing it so they can get control over that startup's users. They really don't care about the technical or financial details, they just want authority over those millions of eyeballs.
z6 10y ago
I'd love to see their return customer number. If you hand out money, user acquisition if measured by signups is pretty meaningless. I tried this site once and it was a disastrous experience. Their customer service is horrendous, and the complete opposite of Amazon. After that purchase it became pretty clear to me that Amazon has nothing to worry about. This reminds me, I have around $100 in credits from 1 failed order because they messed up multiple times. Would be awesome if they sold Amazon gift cards.

chris11 10y ago

I think they've been spending a lot of money getting new users. They've been offering new accounts discounts, I think you can get 15% to 20% off right now. They've had a bunch of items show up on some discount shopping forums like slickdeals. I think they've lost money on some purchases.

joezydeco 10y ago
Just got a flyer in the mail offering $10 off my next 3 purchases. That's not cheap.
- chris11 10y ago
  Yeah, I even remember a rumor going around that they were dropshipping for some items. If something was out of stock they would get it from newegg or amazon and send it to you.
  - was_boring 10y ago
    That's no rumor, it's actually what they do. https://hbr.org/2015/07/the-problems-with-jet-coms-pricing-model https://hbr.org/2015/07/the-problems-with-jet-coms-pricing-m...
  - imcqueen 10y ago
    I have a theory about this, it happened to us when we bought some childrens books on Jet. They came in the mail from Barnes and Noble with a packing slip that had a price higher than we paid included with it. It doesn't explain the Amazon example you mentioned, but I was under the impression they have special affiliate arrangements with 3rd party retailers and that they were somehow being allowed to invest their affiliate commissions into the consumer (which is typically not allowed). So if they're making 15% affiliate commissions from B&N they're able to drop the consumer price 10%. They've been focused on scale more than margin since day 1, so it would make sense that they would just operate on something razor thin and continue to drive home that they have unbeatable prices. For the 3rd party retailers it's a way to compete with AMZN on price without actually having to drop their prices and I can see how that would be attractive to a retailer that's losing market share. No basis for this, just one man's theory.

chirau 10y ago

They raise about $820 million and just spent virtually all of it, outside of operating expenses on marketing. For almost a year, they were advertising everywhere before they had even launched. If i am not mistaken, i think they were boasting of the highest number of pre-launch signups for any company. So that already gave them a huge valuation and potential traction. They eventually launched, with a mixed reception, but they had enough numbers to keep them relevant.

deleted 10y ago
[deleted]

flinty 10y ago

The founder has a lot of ecommerce experience. Sold diapers.com for ~600 mill to amazon and had other similar ventures

jpatel3 10y ago

Advertisement, and marketing dollar. I have tried to look for items on it, but expectations are so high after using Amazon.

ComteDeLaFere 10y ago

I've often wondered about this. Each time I've compared Jet against prices from other retailers, the results have been underwhelming. Occasionally someone mentions a slightly better deal on Jet, but nothing that would rationalize the hype around this company. I'm assuming that Jet was just intended to be a short term play, ending with a float to an established retailer.

brianwawok 10y ago
Most of the sellers are the same. Same sellers, same costs.. how much cheaper could it be outside of special deals?