Jet

Jet.com, Inc. was an American e-commerce company headquartered in Hoboken, New Jersey, co-founded in April 2014 by Marc Lore, Mike Hanrahan and Nate Faust. The site operated primarily as an online marketplace connecting members to third-party merchant partners rather than selling most goods itself, and launched formally on July 21, 2015 after a beta period. Its defining feature was a real-time pricing algorithm that adjusted item prices according to the marginal cost of fulfilling an order: buying multiple items shipped from the same distribution center, waiving free-return rights, or paying with a lower-cost payment method such as a debit card all reduced the price shown to the shopper.

The company initially planned a Costco- or Sam's Club-style paid membership model, announcing a $50 annual fee after a 90-day free trial, with merchandise sold at break-even prices and the membership fee intended as the sole source of profit. That fee-based model was dropped in October 2015. Adjacent programs included Jet Insider, a pre-launch referral campaign that had signed up roughly 352,000 users by February 2015, and Jet Anywhere, which let users earn "JetCash" by spending at partner sites such as Ann Taylor, Bloomingdale's, Hotels.com and Nike; Jet Anywhere ended in March 2017.

Jet.com raised $820 million across four venture rounds from investors including GV, Goldman Sachs, Bain Capital Ventures, Accel Partners, Alibaba Group and Fidelity. Walmart agreed to acquire the company in August 2016 and Jet became a Walmart subsidiary in September 2016. In December 2016 Jet.com completed the acquisition of ShoeBuy from IAC, which was rebranded as Shoes.com. After post-acquisition sales slumped, most Jet staff were moved onto Walmart.com in June 2019 and Jet president Simon Belsham stepped down; Walmart announced the shutdown of Jet.com on May 19, 2020 and closed the site on June 4, 2020.

Founding story

After selling Diapers.com to Amazon in November 2010, Marc Lore reasoned that shoppers might accept longer delivery waits in return for savings, arguing existing internet retailers served wealthier customers who valued convenience over value. He conceived a fee-based membership site combining Costco/Sam's Club economics with broad general e-commerce selection, and was promised $1 million in seed capital by a partner at Accel after a lunch meeting. To avoid salary negotiations he instituted a 10-tier salary and title system for recruits. The company was co-founded in April 2014 with Mike Hanrahan and Nate Faust, who had previously worked with Lore at Quidsi, the parent of Diapers.com, Soap.com and Wag.com.

Business model

Jet.com operated an online marketplace intended chiefly to give members access to offerings from third-party merchant partners rather than selling goods directly itself. At launch it planned to sell merchandise at break-even prices and derive profit solely from a $50 annual membership fee charged after a 90-day free trial; this membership model was abandoned in October 2015. The company worked with a select group of more than 2,400 retailer and brand partners.

Originally a paid-membership model ($50 per year after a 90-day free trial) with goods sold at break-even prices, described by co-founder Marc Lore as passing transaction economics back to the consumer; the membership fee was dropped in October 2015, after which the site operated without a subscription requirement.

Traction

By February 2015 about 352,000 users had signed up through the Jet Insider pre-launch program. As of July 2015 the site listed 4.5 million products. By August 2016 Walmart reported Jet had reached $1 billion run-rate GMV, offered 12 million SKUs, added more than 400,000 new shoppers per month, processed an average of 25,000 orders daily, and had more than 2,400 retailer and brand partners. Wikipedia lists 1,000–5,000 employees as of July 2016.

Latest developments

Walmart announced on May 19, 2020 that it would discontinue Jet.com and phase out the brand, citing the strength of the Walmart.com brand; CEO Doug McMillon said no significant accounting charge was anticipated and that most employees had already moved to Walmart-branded roles. He defended the deal publicly, saying he would make the $3.3 billion acquisition again, citing acquired talent (Marc Lore, who went on to lead Walmart's US e-commerce) and fulfillment centers. The site closed on June 4, 2020 and jet.com now redirects to Walmart.com.