WASHINGTON – Jet.com, a new e-commerce site that promises lower prices than Amazon, debuts on Tuesday.
The site opens a three-month free trial on Tuesday, but the basic idea is that for a $50 annual membership fee, you’ll get prices lower than Amazon on more than 10 million items. Founder Marc Lore tells USA TODAY that the discounts grow the more you buy, and bigger savings can be had through such options as paying some way other than a credit card, or forgoing product return.
“It’s simply about undercutting everyone. We make money only on the memberships, so we can cut profit margins to zero,” Lore says.
He says Jet can also save money (and pass that savings on to customers) by operating similarly to a real-time trading site.
“On one Heinz ketchup bottle we could either lose 20 percent if it had to ship cross-country, or make 20 percent if it was near. So we thought, let’s give retailers the ability to compete for that ketchup depending on where the order comes from.”
Lore was the founder of Quidsi, the parent company of Diapers.com, Soap.com and other household-products sites. He sold Quidsi to Amazon in 2010 for $545 million.
So, does it work? USA TODAY tried it, comparing prices on a handful of products side-by-side with Jet and Amazon. It saved about 30 percent, but said Jet didn’t have some of the items it sought. On the other hand, Amazon Prime membership was required for some of the items.
