(WWBT) - There have been several ads on TV. Jet.com is a new online retailer offering savings on millions of items.
"Jet.com is here," the ads say. Jet's bigger than credit cards. All you do is sign, and "poof," the consumer's heads explode, as though their minds are blown.
Jet.com is a new online retailer trying to beat Amazon at its own game. It's like an online version of Costco or Sam's Club. However, Jet has now dropped its $50 dollar membership fee, and you don't have to buy in bulk, they do.
"So now you can buy human size things at teeny tiny prices," a jet spokesperson explains in a video on Jet's YouTube page.
Jet's website says that rather than asking shoppers to select a retailer, like Amazon does, Jet selects the optimal retailer, such as the one with the nearest distribution center, to offer lower prices. Jet says it uses an algorithm to lower prices. The more products you order from the same distribution center, waive your right to return an item, or use a debit card rather than credit, prices will go down, the site explains.
Jet declined to have an interview. So University of Richmond business professor Tom Arnold weighed in on Jet's business model. "I think the decision for the consumer is going to be weighing how much money can I save using Jet.com versus Amazon," Arnold says.
So is Jet cheaper? CNET bought the same items on Jet and Amazon and posted a video on its YouTube page. "My total price came to about $31, which was cheaper than picking out the exact same items from Amazon," says the CNET reporter, showing a savings of about $10.
Jet's site says orders over $35 dollars are shipped free. Amazon Prime, which has a $99 membership fee, offers free delivery. However, you may wait a few days longer for delivery on some items from Jet than with Amazon Prime's one to two day delivery.
Jet also just needed an infusion of $350 million in November, according to the Wall Street Journal. So will Jet take off or crash? "It's losing money with some orders because it doesn't carry many items yet," says the CNET video, which was posted in July when Jet launched.
"If they're going to lose money to satisfy a consumer, and that person tells another person and it creates volume that way, then it might actually be more of an investment than a loss," Dr. Arnold counters.
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