They'll still lose. Amazon has Prime. They have the fastest shipping in the world. Fuck, they practically invented Just-In-Time warehouses. Amazon is diverse too; they have one of the largest clouds in the world. People know about Amazon. Amazon has tons of reviews on products too, so I know if a product is shitty or not.
I order online like 3 or 4 times a year, I'm not going to pay $50 to shave a few percentage points off my total bill.
They'll still lose...I order online like 3 or 4 times a year.
For someone with the online buying habits of a typical consumer from 1999, you sure seem to have a strong opinion about the state of online commerce in 2015.
Yeah it really doesn't make sense to me. Amazon is already working hard to reduce the price of shipping, which seems to be the biggest thing jet.com is attempting to leverage to lower prices:
- They'll combine different orders automatically into one package
- They routinely use multiple different shippers to send packages (I've seen UPS, USPS, Fedex, Ontrac and Amazon themselves) presumably to find the best rate
- They are investing in advanced future technologies (drones, high-tech warehouses near cities, etc)
- They give you free digital money if you opt into super-slow shipping
And if you look into the future, I don't think people are going to be willing to exchange lower prices for slower shipping. I think people will want faster and faster shipping and somebody is going to have to figure out how to do that cheaply.
As for bulk orders, Amazon already gives discounts for bulk orders (and subscription orders), and are far better positioned to do that more aggressively than any newcomer.
Do you have kids? Are you a middle-class homeowner?
Because I think that's where the real money is and who these guys are really targeting.
Costco did not launch thirty-plus years after WalMart.
"THE HISTORY OF COSTCO
"The company's first location, opened in 1976 under the Price Club name, was in a converted airplane hangar on Morena Boulevard in San Diego. Originally serving only small businesses, the company found it could achieve far greater buying clout by also serving a selected audience of non-business members. With that change, the growth of the warehouse club industry was off and running. In 1983, the first Costco warehouse location was opened in Seattle. Costco became the first company ever to grow from zero to $3 billion in sales in less than six years. When Costco and Price Club merged in 1993, the combined company, operating under the name PriceCostco, had 206 locations generating $16 billion in annual sales."
I have four children (three still living at home in my care, one grown up) and am solidly part of the United States middle-income category. We don't own a house however, but rent a townhouse. I have lived longer at this address than at any other I have lived at in my whole lifetime. I am a member of Amazon Prime, of Costco, and of Sam's Club. I buy different things at different stores. (I buy a lot more at Sam's Club than at Costco mostly because our local Sam's Club is much more on my way to and from other destinations than the local Costco is.) I don't see anything about the new Jet business venture that appeals to me, but I'll listen to my Facebook friends, other middle-aged parents like me, and see what they think about it. I often talk about deals I've found on Amazon to my friends on Facebook. I hardly ever talk up Costco or Sam's Club.
"Costco launched in 1980, 30+ years after Wal Mart, and won by offering less selection and lower prices. I believe there's a real opportunity here."
A website, such as jet.com is out of "sight out of mind". Unless it becomes a habit (like Amazon has for many people including me).
Costco has several advantages over a jet.com. And the Devil is in the details in terms of what made Costco a success.
1) It's not out of site in any way. You can't miss Costco if there is one in your neighborhood. You can easily miss jet.com or not think about it unless it becomes a habit.
2) Costco succeeds also by doing what Walmart does in part. Once you are in the store they get you to buy things that you didn't think that you needed. And more of it then you thought you needed. This was the concept behind Makro Self Service Wholesale in the 80's (the place that Tom Stemberg of Staples interviewed at and got the idea for Staples for. [1] (Ntim, I was at that store when it opened..)
3) Employee culture. Can be done (Zappos) online but I would say more of a benefit in a physical store (my weakest point I will agree). [2]
#2 and #3 are explicitly points being addressed by jet.com.
Re #2: The entire Jet model is the more you buy the more you save. Taking the baseball example, it's pretty easy to infer when they see you are buying cleats and a glove that they will up-sell you with a bat as well and call out the bundle discount you will receive.
Re #3: The article explicitly discusses that the founder is trying to create an "anti-Amazon" culture that values people and relationships. You can agree or disagree with this approach, but you can;t deny they are actively trying to promote a great culture to work in (no performance reviews, for example).
This is not to say that Jet.com is going to nail it, but you can't dismiss Jet.com's efforts here out of hand either.
> Once you are in the store they get you to buy things that you didn't think that you needed.
Yup, I typically got to Costco with one maybe two things in mind, and rarely leave with less than $250 in my cart, and I'm usually one of the lightest carts I see checking out. And it's not things you need, it's things you want. I love Costco.
Amazon is being challenged to make money, and they are doing that by slashing the expensive part of prime (shipping) and throwing in plums like streaming media and cloud storage.
I order online from Amazon 5-6 times a month. I've had more shipping delays and misses over the last three months than I've had in the last 3 years. IMO, Prime is dying -- they wouldn't be talking about entering capital intensive businesses like shipping if it were sustainable.
Me too -- I've had stuff from prime not even ship for a week more than once recently. Amazon is losing their focus, edge or whatever. I don't care about prime movies, prime music, or prime anything other than prime reliable fast shipping.
I'm open to using something else. Both myself and my partner have abandoned Amazon as we no longer get items successfully delivered within a few days, usually it takes around a week... and we were both Prime members, living in West London.
Where Amazon screwed up is the home delivery network. It's terrible. I'm sure they pay their drivers by number of attempted deliveries per hour rather than number of successful deliveries. We live in a block of flats, and we just never manage to get a delivery within several days. Eventually the home delivery people figure out we have a 24/7 365 concierge, but that still adds another day to the actual delivery whilst we wait to be notified by the concierge.
This isn't even a once or twice thing. My partner is an academic and researcher and is ordering 2-3 books per week and 1-2 DVDs per week. Nothing got delivered within a few days of ordering, over a many month period. We have lost faith in Amazon so totally, that we no longer go to them for books, let alone anything else.
If Amazon offered Royal Mail, standard post... we'd both return.
As it stands, using Amazon is absolutely useless for us, nothing arrives when we need things and it's better to use almost any other supplier. Any supplier that uses Royal Mail gets a successful delivery within 1-2 working days.
How bad is Amazon home delivery in West London? Put it like this, Christmas 2013 we bought all our gifts from Amazon, Christmas 2014 we didn't purchase a single item from Amazon.
I don't believe we're a freak exception, so there's got to be a large market of people like us who will use anything other than Amazon if the shipper will just use the postal system.
There's always room for competition, which, at the end of the day, is good for consumers. Their service(s) might not appeal to you, but it might appeal to the next guy.
Recall what the mobile OS space was when Google launched Android in late 2007? Yep, even Ballmer made fun of the new OS. Today does anybody care about a mobile OS from Microsoft? Sure, we're not talking about the same type of business, but the key is competition, choice.
I remember when Cisco networking devices were virtually the only game in town. Then along came Juniper Networks. Today, Juniper is doing mighty good.
The key to success in a business that's dominated by the proverbial 800-pound gorilla is to find a niche and step in.
Once I sign up, some of the resources return 403 (IP is blocked by geoblocker ...). Went through a US proxy and can see what it's supposed to look like. The funny part is that first message that is supposed to say "Thanks! You're Jet Insider No. XXX,XXXX Share to move up the ranks" instead says:
Thanks!
You're Jet Insider
No."
I could not figure out what the hell that was supposed to mean.
I guess this is just some launch last minute scrambling or something? Might not have been the best choice, anyone outside the US or wherever is being blocked has the first impression "Ah, they are going to take on Amazon and can't get a signup flow to work ... right".
The whole sentence reads You're Jet Insider No. 100,000 (or whatever your number is). The number probably loads from a separate service, there is a noticeable delay before it renders.
There is a number that comes after "No." which shows your spot in line. It took a few seconds after the page was rendered to show up. Also, that entire circle is in flash. That may explain why you had that kind of experience
"We're basically not making a dime on any of the transactions."
- If that's how you really feel then take the word basically out. You are making money off transactions but you would very much like to give the impression you aren't.
Their example of "How Jet Works" involves supposedly wholesale prices that somehow get magically discounted and a shipping arrangement that somehow magically works that, if you pay with a debit card, saves you $6 off your contrived amazon order...
Then it goes into a story about the guy who's starting jet and how he is and always has been a money hungry, cut-throat business man looking to make millions and then sell. Nothing about his "bio" sounds very consumer focused.
Exerpt from the site:
"Refer friends to boost your Insider rank. The more friends you refer, the more perks you unlock."
Yeah, no thanks. Costco is consumer focused, amazon is consumer focused, this is money focused and the businessweek piece is a complete puff job.
Isn't this just the same as, "share with your friends to get a better place in our waiting list" that others have employed. I remember Robinhood doing this and wondered if it really moved my place or was simply a growth hack lie.
Amazon will kick their ass on logistics. Amazon already does most of the bundling, dynamic pricing, discounts for slower shipping and other tricks that jet.com mentions. Amazon will also kick their ass in pricing (that's what they did to diapers.com).
They only real viable option is to have products that Amazon doesn't have, but citing Sears as a key early partner doesn't really bode much hope in that dept.
They'll also need to burn insane amounts of cash on marketing and customer acquisition to get people to pay for subscriptions (which they say is their only source of revenue). This at a time when VCs appetite for startups burning cash like crazy is starting to come back to reality...
If there are investors are willing to set piles of cash on fire poke Amazon in the side then I'm happy to watch such a blood sport, but the business plan and concept at this point seems rather weak.
How is a bunch of disparate geographically disjointed retailers going to out-price one massive local Amazon warehouse doing a large volume of local deliveries? Plus I'm already paying prime, which is > $50 membership fee Jet is charging.
Lore and Baharara are quite a team. When they were Diapers.com they went down kicking and biting against Amazon. I hope a book gets written about these guys, they are incredibly inspiring.
Finally! If Jet.com doesn't charge amazon style fees this means I can mark my products down by 25-50% ! and still make the same profit as I do on Amazon. Amazon fees are massive even without the penny pricing snag. Here's mine: http://i3.minus.com/i0tJucuLy5zPB.jpg
When Jet opens up to small sellers I'll be the first in line. Hopefully consumers will notice the big price differences and buy a membership.
At first it sounded like a better version of online Costco, which sounds awesome since Costco's selection is limited. But after reading how it really works I'm not so sure this will be that competitive vs. Amazon. There's a dependency on other merchants it sounds like?
over 40% of Amazon sales are from their 3rd party marketplace which relies on third party merchants. If those merchants were allowed to sell without paying Amazon 15% commissions and without competing directly with Amazon's first party sales, you would imagine they could become even more competitive on price. there is no reason Jet will not be consistently lower than Amazon on price especially since they take on no infrastructure costs.
I see. As a prime member my perspective only shows me how I use Amazon. I always use the Prime filter and try to buy things that are Shipped from and Sold from Amazon. For 3rd party merchants than this definitely sounds impactful.
I wonder if there's any room for Jet to satisfy those who seek impulse buys, convenience, and speed.
From the article, it seems like you still can, you'll just pay a higher price. If you want next day shipping on one item, you can do that; you just won't reap the benefits of their bundling idea.
These "share your link to move up in line" things are a fun mechanic, and seem to work well for virality, but the way they're currently being implemented is embarrassingly easy to gamify.
In a line of curl and about ten minutes, I went from ~130,000 to #2 (proof: https://twitter.com/cgenco/status/553651179779940352). Anyone with an elementary knowledge of the Chrome web inspector and bash could do the same.
This could be halfway patched by only counting verified accounts. ie: send a verification email to everyone who signs up, and only count them if they click the link. It could still be "hacked," but it would be more tedious and require sufficiently more resources. If you're thinking about doing something like this for your startup launch, please at least verify email addresses.
A full solution would have to depend on something that could verify that an account has one-and-only-one real person behind it. Perhaps linking a credit card, making a purchase, or shipping to a unique address.
I'm really interested in jet as a service, and very excited for the launch, but I'd be incredibly disappointed if my ~5k fake entries aren't discovered before the end of this competition.
As an aside: this website has really confusing UX:
1. Why does practically everything on the page flip over if I hover for ~1000ms? Things should either flip over immediately on mouse hover (which still isn't fantastic - what do you do on mobile?), or after a button press.
2. "Click to copy your unique link" doesn't work (Retina MBP OS X 10.10 Chrome 39.0.2171.95 64-bit), and only shows a pointer cursor the first time you hover over it.
3. "Click here to check your Jet Insider rank" in the welcome email doesn't have an href attribute, so the link doesn't work.
like you say, email verification can be hacked just as easily. best answer is to use some authenticated id like facebook/twitter. regardless, why would someone bother....their terms have all sorts of stuff about securits laws, signing consulting agreements with jet etc...they must be auditing anyone in the running for stock.
I'd bet that's only there to verify granting of stock options: manually going through the top ten isn't that labor intensive. There's still an advantage to getting free service for a year.
Re flash: unfortunately that's the state of the art for cross platform copying to the clipboard. Their implementation just seems broken.
Other than having more tiers how is this any different then sign up incentives any number of other sites offer? When Uber gives you free rides for signing up other users is that a ponzi-style scheme as well?
Saying that Amazon is an e-commerce provider is like saying Microsoft is a hardware company because it sells (good) keyboards. Amazon is positioned to become the biggest distributor of computing power to leverage you to sell a good that Amazon's army of distribution centers and local courier agreements can get to you in as little as a few hours.
Yet-Another-Hyperbole-Filled-Buying-Club is not something I believe Bezos would be scared of. If anyone should be scared, it should be UPS, FedEx, and the USPS. Amazon is much more likely to be coming for them.
I order online like 3 or 4 times a year, I'm not going to pay $50 to shave a few percentage points off my total bill.