It may not be the anti-Amazon of pre-launch hype, but e-commerce veteran Marc Lore has so far demonstrated Jet.com’s airworthiness.
The e-tail upstart took off last summer with a unique online notion: to encourage larger orders by offering sliding-scale discounts when customers purchase multiple items or wave returns.
The merchandise itself is culled from Jet.com warehouses and a pool of third-party sellers that includes Toys“R”Us, Barnes & Noble and Sports Authority, and the cost savings when processing multi-item baskets is passed along to shoppers.
Jet’s maiden flight encountered some turbulence in August, when Amazon made waves with a Prime Days summer promotion that averted attention and may have been personal. Founder Lore was an Amazon competitor-turned-employee who first battled Jeff Bezos for diaper supremacy, and then sold him his Diapers.com and parent Quidsi business amid a looming price war. It was at Quidsi that Lore developed the algorithms that minimize Jet’s shipping costs, and first employed the Kiva warehouse robots that Amazon has since embraced.
Mid-course Jet adjustments included jettisoning an initial $45 membership fee, while the company has been burning through as much as $25 million a month on marketing, including a mass $10 discount mailing, to fuel new-customer growth.
But Jet appears to be gaining altitude. Last month it raised $350 million in new funding, bringing its valuation up to $1 billion, and gross merchandise sales were on track to hit $37.4 million in November and $44.5 million in December, representing an annualized rate of about $500 million by year’s end.
For Lure and Jet, the sky’s apparently the limit.