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Jet.com Takes On Amazon For E-Commerce Top Spot!

Posted by: on May 27, 2015 | No Comments

Have you heard of the new online store called Jet.com that has plans to give Amazon a run for their money? No, well the scrappy startup raised an insane amount of VC funding at the tune of $220 million with an estimated crazy valuation of $600 million. The startup has some heavy hitters when it comes to investors too, Google Ventures, NEA, Accel Partners, Bain Capital Ventures, Golden Sachs, northwest Venture Partners and Coatue Management. It’s clear that Jet.com has the funding to get things moving but can this underdog startup dethrone Amazon? The co-founder Marc Lore, Nate Faust and Mike Hanrahan think they have a chance to be the top e-commerce website online. Marc already has found success in business with his early startup Diapers.com. Marc sold Diapers.com to Amazon in 2011 for $545 million. He even worked for the e-commerce giant Amazon for two years before heading up Jet.com.

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Jet.com has a simple business model, offer an annual fee of $49.99 to access the lowest of items on their site using their custom algorithm engine. Jet does not make any money from the 10 million items they sell on the site. All their revenue comes from the annual $49.99 fee. Jet promise to save consumers money by not taking a cut from the items they sell. Interesting model but will it work? Some early beta invite only members think so. The site has plans to open the doors to the service to the public in July 2015. The service is not flawless based on some reports from beta testers. Testers agree Jet.com does save money but has longer shipping delivers for some items. I really don’t see that as an issue because as the system scale and more users use the service 99% of these issues will be irrelevant. Only time will tell if Jet.com can overcome Amazon and become the number one e-commerce website on the web. Share your thoughts on Jet.com in the comments.

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