Jet.com vs. Amazon - What does it mean for E-Commerce

Jet.com vs. Amazon: What Do the Numbers Mean for E-Commerce?

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Jet.com is a new competitor for Amazon and is coming out guns a blazin’,  touting cheaper prices for commodity items and giving Amazon a run for its money.

Related Posts: Why is Amazon so successful?Amazon Statistics + Infographic

Here’s what we know about the numbers so far for Jet.com in its early stages.

  • Jet.com raised $350 million in the end of 2015
  • In the fall of 2015, Jet.com was valued at $1.3 billion
  • Its original premise was allowing people to pay a $50 membership to get rock-bottom prices where they made no profit on transaction
  • Not long after launching, Jet dropped the $50 membership fee citing that “people don’t mind paying a little more for items,” as long as it’s even the slightest bit cheaper than the competitor Amazon.

Jet’s overall premise is founded similarly to Amazon in that it doesn’t expect to make a large profit for a long time, and instead is intent on increasing its value and market share. 

Five more fast facts to help you understand the market that Jet.com is going after:

  • According to the Wall Street Journal, “Jet plans to spend $1.5 billion over the next five years to obtain 15 million customers”
  • Jet ended 2015 on track to have $500 million in transactions for goods annually
  • Jet is making acquisitions, including the purchase of a 14-year-old’s furniture company for $90 million. The reason? “Buying revenue,” as the company Hayneedle is doing $350 million in online sales every year
  • “Because we had such meteoric growth in the first couple of months, we’re trying to grow smoothly and responsibly,” Liza Landsman Jet’s marketing chief said in an article for the New York Post
  • A couple innovations for users Jet plans to capitalize on are a smart cart that applies discounts when visitors add more than one item to their cart and, originally. significantly cheaper prices for a membership fee

Although Jet.com has since revoked the membership fee and some of the savings, as it realized the market didn’t require that from them, the competition seems to be revving up between them and Amazon as they will start to potentially compete for prices and put a strain on manufacturers and suppliers to the delight of customers everywhere.

What does this mean for e-commerce elsewhere on the web?

The commodities market is getting hot and heavy for these “Walmarts of the web,” but the opportunities for handmade and artisan goods, smart objects and devices, and more curated specialized items still remain strong on the web.

The beauty of selling these kinds of items on your own e-commerce website is that you can make a customized pitch that sets the tone and sells the story to set your products apart from your competitors. So the Jet.com vs. Amazon battle is bad for the paper towel companies, but it’s hard to really tell the story of more specialized products on these sites and for that reason there is still opportunity.

 


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