Jet.com, the second eCommerce brainchild from Diapers.com founder Marc Lore, goes into the market valued at $600 million – and that is before the company has sold a single item, according to The Wall Street Journal. However, CEO Lore has a long history of winning at eCommerce (even under direct pressure from Amazon, who tried to beat Diapers’ parent company Quidsi before giving up and buying it) and a business model that is widely praised and buzzed about.
Lore also has ambition, it seems, as Jet.com told Wells Fargo clients on Tuesday (April 21) that the firm expects to see gross merchandise volume on the site of $20 billion by 2020. That is a big jump, since as recently as last year Jet was floating a much smaller $5 billion in five-years figure.
Jet’s CFO Scott Hilton also noted that the firm expects to have more than 1 million customers subscribed for $50 by the end of 2015 and 15 million customers by 2020, WSJ reported.
Matt Nemer, a Wells Fargo analyst, noted that if those projections shake out to be accurate, Jet’s gross merchandise volume will be larger that Walmart’s Web sales and Staples, leaving only Amazon and eBay out in front of it. Nemer further noted that the projected $1,300 a year Jet is quoting each consumer will spend would have it running about equal with QVC in average annual customer spending.
Jet’s business model entails undercutting Amazon on price by matching buyers and merchandise with each other by proximity and using commissions to lower list price.
“[The] appetite for innovation in eCommerce is massive,” CEO Marc Lore said. “This fact combined with the additional capital we have recently raised has given us further conviction to invest more aggressively in growth.”
Lore further cited 1,300 merchants who have signed up for the marketplace and 10 million unique products for sale – and that interest has been bigger since Jet has turned away “hundreds” of merchants for a variety of reasons mostly relating to customer service.
Jet is supposed to launch this spring, but no official date has been set.