The competition just got fiercer in the eCommerce world: Jet.com has launched.
The low-price eCommerce site that’s pegged itself as being the next Amazon, but reportedly often with better prices, officially opened for business today (July 21). The site has gotten an immense amount of press for months, but on its debut there’s just one question left to ask: Can Jet actually keep up with Amazon?
Ironically, Jet was founded by a former Amazon employee – Marc Lore, who was previously the COO of Wizkids, and before that made his name as the co-founder and CEO of The Pit (eBay alternative). He even sold Diapers.com to Amazon just five years ago. And since then, he’s moved onto Jet and raised $220 million in about a year’s time.
So how does Lore classify his company?
“We have an assortment that’s vast like Amazon’s, and pricing that’s similar to a wholesale store and membership,” Lore told CNNMoney.
While Amazon has more than 200 million products it sells on its marketplace, Jet is substantially smaller with around 10 million products. But, Jet is banking on the fact that it offers bulk-sized orders in order to boost its sales.
For those who haven’t kept up with the headlines about Jet, here’s a little about how the service works. Anyone can join, but it costs $50 per year to become a member (similar to a Costco membership). Jet also enables third-party sellers to sell on its site, but, unlike Amazon, it doesn’t show different products at different prices. Jet uses an algorithm to determine what seller has the best price on an item and features that price.
How much will customers save on Jet? Well, according to the company, consumers can expect to save about $150 a year. And the more consumers buy, the less they are charged for an individual item. Based on how many products consumers buy, discounts are applied.
As for shipping, there is a $35 free-shipping threshold and products are expected to delivered in two to five business days. There isn’t same-day service yet, whereas Amazon offers it in 14 cities. And there’s also a rewards program called “Jet Cash” that enables consumers to collect points based on what stores they shop at.
For now, Jet is only available in the U.S. since Lore said the company wants to remain “laser-focused.”
“There are a whole host of companies beyond Amazon.com adding marketplaces to their website. I think this is the future: You will see more marketplaces where retailers are selling. The problem, and where the inefficiency lies, is that the prices when people sell products have no relation to the underlying relation to economics of the specific transaction,” he told Forbes in a recent interview.