MONTCLAIR, N.J., July 21 (UPI) -- Jet.com, a new e-commerce website, opened Tuesday aiming to undercut online giant Amazon's prices on products from toilet paper to Blu-ray players.
The site is the brainchild of enterpreneur Marc Lore, founder of Diapers.com which was bought out by Amazon. After a trial run involving 100,000 customers in limited markets and $225 million in funding, Lore says he wants to breathe new life into online shopping with Jet, adding that not much has changed since 1997, when Amazon became a public company.
Jet offers a $49.99 yearly membership that includes free shipping on orders over $35 and prices on a selection of goods that are 10 to 15 percent lower than Amazon's. Free return shipping is included, as well, though this can be waived in favor of lower purchase prices.
Like Costco, Jet offers a free trial membership. For 90 days, users may browse and purchase goods without fearing automatic enrollment at the end of the trial period.
The site shows about 90 percent of Jet's inventory alongside Amazon's lowest price for the same items.
Lore said Jet targets a segment of the market that prioritizes price. As shoppers add more items to their cart or select options that benefit Jet (such as choosing to pay with a debit card over a credit card), the final purchase price goes down.
Jet will rely on membership fees for future profits. For that model to work, it needs tens of millions of members.
If a shopper purchases an item that Jet does not physically have, a Jet employee will buy it from a retailer and ship it directly to the customer. Purchases made by the Wall Street Journal involving goods that Jet didn't have showed that Jet incurred a cost of $518.46 and earned only $242.91.
Lore says he's not aiming for Amazon Prime customers, who get faster shipping and video streaming as part of their $99 annual membership.
Lore worked at Amazon for a few years after his company Quidsi (which operates Diapers.com and Soap.com) was acquired by Amazon in 2010 for $550 million. He then left to begin work on Jet.