I like Jet and hope it sticks around. I just don't know how it will make it based on their pricing structure and how much money they can lose on transactions.
For example, a month ago I bought an office chair. The retail price of this chair was $160. Jet.com was offering the same chair for $112. I was shocked. Plus they have a 15% off coupon for your first order. Needless to say, I bought the chair.
Jet ordered the chair from another website at the full retail price of $160 but turned around and was selling it for $112 with free shipping and a 15% off coupon code.
My purchase price was just $95. Meaning Jet lost at least $65 on this transaction.
I just don't know how they will stay afloat without constantly asking for money from investors. And how long will that go on for?
I read an article that Amazon has no profits most years [0]. Maybe that's the financial model they are going after. I share your view on this though, because until they reach that point, they are running a big risk. It will be interesting to see how long they can keep it going.
The difference is that Amazon had no profits in the early days because they poured money into improving their supply chain not selling products at a loss as a strategy. Drop shopping isn't the same as building your own supply chain out. There is no strategic advantage to be had placing orders with a drop ship network.
I looked around and compared prices. Nothing was cheaper than $160. Plus the package was shipped directly to me from the place that Jet got it from... which was ibuyofficesupply.com
Edit: I was asked why I think Jet paid full retail price... I can't know that for sure obviously. There was a packing slip that I didn't think to look at. In any case, the only way they don't lose money is if they bought it for close to 50% off. Seems unlikely to me.
2x is entirely reasonable markup on a piece of furniture, particularly if they bought it in bulk. There's just no way they are selling merchandise at a 40% loss per unit.
My understanding from interviews with employees and they use volume, logistics and other factors to leverage a better deal that they pass off entirely to the customer. (They make their profits off the membership as I recall)
I think this was the original plan, but they dropped the membership fee and have since raised several hundreds of millions to continue operating. Hence all of the head scratching about their financial prospects.
I emailed their customer support last week because one of the 4 similar items (deodorant!) that I had purchased was expired and rotten. Even sent them pictures. No response, not even a 'we received your email' message. So maybe customer support isn't a priority either. =(
I'd try again as I have had to contact Jet support a couple of times now, and found it super fast. They refunded me within minutes of sending out the email.
Anecdotal story from a different online retailer (soap.com) - sent photo showing that the cat litter they shipped had broken open a little bit.
No real damage done as it was still totally usable; thought I would let them know to help improve shipping methods. Within a few minutes a rep emailed with a personal story about how they had a cat too and would have been bummed about that too and then issued a refund.
I like that story and haven't really had a time to share before now :)
Interesting update... I just forwarded my email to them again... got an immediate response, apology for not responding earlier (it had been 5 days) and a $6 credit for not responding.
Jet.com employees are happy. How do we know they're happy? Well their CEO comes and asks them directly if they're happy. "The company's chief executive says, “I’m constantly asking people at Jet if they’re happy."” And guess what they tell this CEO, they tell him "I'm happy". They value happiness so much they gave out a happiness survey. Guess what? Turns out almost everyone is happy, just look at these images of smiling faces. Jet.com is happiness.
NYT... what the hell. I guess it's remarkable you held out longer than the rest.
> An analytics applicant came into Jet for an interview. In some ways he was a model candidate, smart and driven. But he did not score high in the “plays well with others” category. Asked to talk about a recent project in which he was a member of a team, he could not think of any. His prospects immediately diminished to zero.
I hate this anecdote. Just because he could not, on the spot, think of a project in which he was a "member of a team," he is unable to "play well with others"? What if at his previous company he was asked to work by himself for projects? Does that mean he can't work in a team if he was made to? Does that say he's not good at analytics and doesn't deserve the job? Or what if he couldn't think of a good example of a project involving teamwork? I really hope this anecdote is merely incomplete.
What a load of BS. So the message is what? If you blow through giant piles of VC cash spending money like crazy you can make some employees happy?
One gets to put out such puff PR pieces and be taken seriously if you're profitable, or even close to profitable. Then you're actually saying something. "Look at us, we run a great business and have happy employees." Otherwise, yes if you light mountains of money on fire some people will get a good ride out of it... until the cash is gone then it's a bloodbath.
Jet's business model is, well it seems they no longer have a business model other than seeing how fast they can burn cash. I wish them well, but seriously right now this company looks like a friggin' mess with no clear long term path forward.
I suspect that the goal is to be acquired by some big profitable company that wants to dip its feet into e-commerce. Or even being acquired by Amazon, which would probably want to eliminate all competition, even if its not profitable. The CEO of this company made a lot of money selling his last company to Amazon -- he's probably hoping to do the same here.
Perhaps, but that seems unlikely given their current play. The CEO previously managed to be a pain in the side of Amazon in a niche space and started a pricing war around that area (diapers for one). In the end, Amazon basically bled them dry and acquired them but at a relatively lean valuation in what was essentially an acquihire. In the context of this article, that accession didn't work out so great for most of the employees. That old company still exists within Amazon, but is mostly a mess.
Such a scenario wouldn't work out well for Jet employees in the current context either given the astronomical amounts of VC cash that were put on the table. Typically those VCs need to be made whole and then some before anyone else sees a dime. Given previous articles about Jet's fundraising challenges last go around and a market that's increasingly skeptical of lofty valuations with little substance it's not clear at all how this turns out well unless Jet can show it's a real business with real value long term and not just some crazy experiment in seeing how fast one can burn piles of cash.
Their on-site tools are total garbage, so I tried playing with their API... and it was also a giant pile of trash. Random exceptions, timeouts, incoherent structure all around. 0/7 would not play with again.
The API wasn't too bad, but it's woefully under-documented. The sample code is worthless. I also don't like that you have to implement it all and run it against test before you get production keys, but no biggie.
The bigger issue: I uploaded my catalog 2 weeks ago, and all products are still "under Jet review". I emailed and they said some partners have waited over a month.
I don't know what to make of Jet.com. I was interested in their initial model of trying to be an online, membership-funded retailer in the vein of Costco. Now that they've signalled a move away from memberships I don't know what their advantage is.
My anecdotal experience is that they have a smaller selection, worse fulfillment, and worse customer service than their obvious competitor, Amazon. Their site and product description pages leave a lot to be desired so even if they can undercut Amazon by a small amount, I'm going to order from Amazon instead because I have more confidence that I'll receive what I ordered, on-time, and have a better experience if I need to return anything.
Jet.com has a very large hill to climb here but I wish them well.
What good are those happy employees if Jet can't provide good service for customers?
I wanted to try Jet, so I bought a monitor expecting 2 - 5 day delivery. 2 days after I placed the order, I got notification that the order had shipped.... but Fedex didn't actually scan the package until the end of the day after that. Then I discovered that it was sent as "Direct Signature Required", which means it has to be signed by me, not by a neighbor and not just signing a door tag, I had to be home to sign for it.
I contacted Jet to see if they could redirect it to my office, or remove the signature requirement, but they couldn't do anything since it was shipped by a partner.
Since I didn't want to wait another 5 days until a delivery attempt so I could pay Fedex to redirect it to my office, I placed an order from Amazon for the same monitor. 3 hours after I placed the order, Amazon sent a shipment confirmation, and 2 days later, the monitor was on my front porch, no signature required (for $7.99 they would have have it there the next day)
Fedex ended up delivering the monitor on a Saturday, 9 days after I placed the order (7 business days for their "2 - 5 day shipping"). I processed a return online (which was relatively easy and painless), and 2 weeks later I had a refund -- Amazon does returns better -- when I do Amazon returns, they credit me as soon as UPS has the package.
Jet has a long way to go before they can declare themselves an Amazon killer.
I haven't noticed their prices are significantly better than Amazon to warrant the switching costs, which include giving up one click purchasing and free two day shipping (Jet offers two-day shipping on some products, and shipping is only free if you spend $35 or more).
Maybe they're better for household goods than electronics, but every time I browse Jet, it feels like I'm going through the bargain bin. Odd prices and odd sorting don't make for a great experience. For example, a search for "iPhone" returns one result for something that looks like a fishing pole. There's no product description and I can't tell if it's so you can play fishing games on your phone or if it's to attach your phone to a pole. Either way, to see iPhone accessories, you need to click the tiny "Electronics (10,000+)" link at the top of the page.
Once you actually click into a product page, they seem really bare. Amazon offers some great tools to help make a purchase decision (ratings/reviews, category rankings, recommendations), which Jet doesn't (and can't) offer.
They're really pushing Jet Anywhere, but I can't see how that does anything other than lose them more money. Along with a $50 off first purchase coupon and $100 in Jet Cash I racked up, I gave Jet $150 to buy me a $300 PlayStation 4 from Newegg. I know I'm an extreme case, but $150 customer acquisition cost for someone who didn't particularly enjoy the experience and probably won't shop there again seems to fit with the narrative that they're burning through cash.
36 comments
[ 4.4 ms ] story [ 93.1 ms ] threadFor example, a month ago I bought an office chair. The retail price of this chair was $160. Jet.com was offering the same chair for $112. I was shocked. Plus they have a 15% off coupon for your first order. Needless to say, I bought the chair.
Jet ordered the chair from another website at the full retail price of $160 but turned around and was selling it for $112 with free shipping and a 15% off coupon code.
My purchase price was just $95. Meaning Jet lost at least $65 on this transaction.
I just don't know how they will stay afloat without constantly asking for money from investors. And how long will that go on for?
[0] http://ben-evans.com/benedictevans/2014/9/4/why-amazon-has-n...
Edit: I was asked why I think Jet paid full retail price... I can't know that for sure obviously. There was a packing slip that I didn't think to look at. In any case, the only way they don't lose money is if they bought it for close to 50% off. Seems unlikely to me.
No real damage done as it was still totally usable; thought I would let them know to help improve shipping methods. Within a few minutes a rep emailed with a personal story about how they had a cat too and would have been bummed about that too and then issued a refund.
I like that story and haven't really had a time to share before now :)
Nice way to step up the game... =)
NYT... what the hell. I guess it's remarkable you held out longer than the rest.
[0] http://paulgraham.com/submarine.html
I hate this anecdote. Just because he could not, on the spot, think of a project in which he was a "member of a team," he is unable to "play well with others"? What if at his previous company he was asked to work by himself for projects? Does that mean he can't work in a team if he was made to? Does that say he's not good at analytics and doesn't deserve the job? Or what if he couldn't think of a good example of a project involving teamwork? I really hope this anecdote is merely incomplete.
One gets to put out such puff PR pieces and be taken seriously if you're profitable, or even close to profitable. Then you're actually saying something. "Look at us, we run a great business and have happy employees." Otherwise, yes if you light mountains of money on fire some people will get a good ride out of it... until the cash is gone then it's a bloodbath.
Jet's business model is, well it seems they no longer have a business model other than seeing how fast they can burn cash. I wish them well, but seriously right now this company looks like a friggin' mess with no clear long term path forward.
Such a scenario wouldn't work out well for Jet employees in the current context either given the astronomical amounts of VC cash that were put on the table. Typically those VCs need to be made whole and then some before anyone else sees a dime. Given previous articles about Jet's fundraising challenges last go around and a market that's increasingly skeptical of lofty valuations with little substance it's not clear at all how this turns out well unless Jet can show it's a real business with real value long term and not just some crazy experiment in seeing how fast one can burn piles of cash.
The bigger issue: I uploaded my catalog 2 weeks ago, and all products are still "under Jet review". I emailed and they said some partners have waited over a month.
My anecdotal experience is that they have a smaller selection, worse fulfillment, and worse customer service than their obvious competitor, Amazon. Their site and product description pages leave a lot to be desired so even if they can undercut Amazon by a small amount, I'm going to order from Amazon instead because I have more confidence that I'll receive what I ordered, on-time, and have a better experience if I need to return anything.
Jet.com has a very large hill to climb here but I wish them well.
I wanted to try Jet, so I bought a monitor expecting 2 - 5 day delivery. 2 days after I placed the order, I got notification that the order had shipped.... but Fedex didn't actually scan the package until the end of the day after that. Then I discovered that it was sent as "Direct Signature Required", which means it has to be signed by me, not by a neighbor and not just signing a door tag, I had to be home to sign for it.
I contacted Jet to see if they could redirect it to my office, or remove the signature requirement, but they couldn't do anything since it was shipped by a partner.
Since I didn't want to wait another 5 days until a delivery attempt so I could pay Fedex to redirect it to my office, I placed an order from Amazon for the same monitor. 3 hours after I placed the order, Amazon sent a shipment confirmation, and 2 days later, the monitor was on my front porch, no signature required (for $7.99 they would have have it there the next day)
Fedex ended up delivering the monitor on a Saturday, 9 days after I placed the order (7 business days for their "2 - 5 day shipping"). I processed a return online (which was relatively easy and painless), and 2 weeks later I had a refund -- Amazon does returns better -- when I do Amazon returns, they credit me as soon as UPS has the package.
Jet has a long way to go before they can declare themselves an Amazon killer.
Maybe they're better for household goods than electronics, but every time I browse Jet, it feels like I'm going through the bargain bin. Odd prices and odd sorting don't make for a great experience. For example, a search for "iPhone" returns one result for something that looks like a fishing pole. There's no product description and I can't tell if it's so you can play fishing games on your phone or if it's to attach your phone to a pole. Either way, to see iPhone accessories, you need to click the tiny "Electronics (10,000+)" link at the top of the page.
Once you actually click into a product page, they seem really bare. Amazon offers some great tools to help make a purchase decision (ratings/reviews, category rankings, recommendations), which Jet doesn't (and can't) offer.
They're really pushing Jet Anywhere, but I can't see how that does anything other than lose them more money. Along with a $50 off first purchase coupon and $100 in Jet Cash I racked up, I gave Jet $150 to buy me a $300 PlayStation 4 from Newegg. I know I'm an extreme case, but $150 customer acquisition cost for someone who didn't particularly enjoy the experience and probably won't shop there again seems to fit with the narrative that they're burning through cash.