Retail

Jet.com Predicting $1 Billion In Sales By May

Jet.com entered the marketplace last July with a lot of fanfare – and a lot of questions. Sure the eCommerce firm was generating a lot of hype, but could it really hope to take on the Goliath that is Amazon.com?

Early signs looked a bit troubling. Jet got into an early dust-up with some merchants who found their goods on Jet, without their permission. The eCommerce up-and-comer also initially billed itself as not seeking to profit on the goods — and instead looking to membership fees to be the revenue driving engine. However, shortly after launch, Jet dropped the membership program and focused instead on recruiting users and growing sales.

Some thought it a sane re-pivot, while others took it as an early sign of trouble.

But some recent data may go some distance to ease some of those worried minds in the market, as Jet has announced it has 3.6 million users and over 1,600 sellers hanging out in its marketplace.

Those millions of customers have spent, according to Jet, just shy of $1 billion on the marketplace since its launch last summer.

Scott Hilton, chief revenue officer of Jet, noted the figure at the annual ChannelAdvisor Catalyst conference in Las Vegas this week. Hilton also noted Jet takes a cut of between 8-15 percent on each sale depending on the product category.

Jet shines brightest in electronics, followed by home, garden and furniture, followed by grocery and household goods. Electronics eat up 20 percent to 25 percent of the pie, home, garden and furniture clock in at about 15 percent, and grocery and household hit about 12 percent.

“Our Hayneedle alliance allows us to significantly expand the assortment in the indoor and outdoor home furnishings and decor categories, which are important categories for our customers,” Hilton noted. “This partnership will attract more consumers to shop the home category, which will benefit all of our retailers.”

Jet’s marketplace has raised over $700 million in funding, will continue to invest heavily in acquiring customers through marketing and advertising – one if its larger expenditures. Its biggest differentiator from its larger competitors over at Amazon and eBay is discounted buying if consumers make larger orders, agree to slower shipping rates or waive the right to returns.

In general, the data indicate that shoppers are responding well to the offer of lower overall price for a larger cart. Jet customers average 5.5 items per visit.

“Typical marketplaces are very product-centric, where consumers select the retailer for the product they want to buy. This action adds a lot of unnecessary fulfillment and shipping costs,” Hilton told Internet Retailer. “We have visibility into where the consumer wants to ship the order as well as the specific pools of inventory from all of the retailers. Consumers are incentivized to make these smart choices by sharing in some of the cost savings. Both the retailer and shipper win — the retailer gets a more profitable order and the shopper gets rewarded with a less costly order.”

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