Jet Online Retailer Ipo

Jet online retailer ipo

Jet online retailer ipo is an American e-commerce company headquartered in Hoboken, New Jersey. The company was co-founded in 2014 by Marc Lore (who had previously sold to, along with Mike Hanrahan and Nate Faust. raised $820 million over four venture rounds from Google Ventures, Goldman Sachs, Bain Capital Ventures, Accel Partners, Alibaba Group, and Fidelity.[4] The website was formally launched in July 2015.[5][6] In Fall 2016, it became a subsidiary of Walmart.[7]

In June 2019, in the wake of slumping sales through the site in the period since the acquisition,[8] all employees were transferred to work on the site and Simon Belsham, the president of, stepped down.[9]


After Marc Lore sold to Amazon in November 2010, he speculated that users may be willing to accept longer wait times on obtaining online-purchased goods if they can save money on their purchases.

He said that existing Internet retailers were catering only to wealthier customers "who care more about convenience than value".[10] Lore initially set out to create a site that would use a fee-based membership model like Costco and Sam's Club and combine this with the broad selection of a general e-commerce retailer, somewhat like Amazon Prime but emphasizing reduced product prices for members rather than fast free shipping.

He began to peddle the idea, and after lunch with a partner at Accel Ventures, Lore was promised $1 million in seed capital to start a new site. To create transparency and reduce squabbling over salaries, Lore created a 10-tier salary and title system.

Jetcom Inc.

Recruits were assigned to one of the levels based on experience, thus eliminating salary negotiations.[11]

A prominent feature of the site is its pricing scheme. Pricing adjustments are offered to encourage users to buy more items at once and to purchase items that are located in the same distribution center, thus making the purchases less expensive for the company to collect and ship. As users add items to their virtual shopping cart, they are encouraged to select additional items using pricing incentives.

Pricing options are also offered during the check-out process, such as having the user opt out of the ability to return merchandise for free in exchange for a reduced price.

It was initially announced that the site would charge users a $50 annual membership fee[12][13] after a 90-day free trial period, and that the membership fee would be the only source of profit for the company – so the merchandise would be sold at break-even prices by[10][14] Lore said "The bottom line is, we're basically not making a dime on any of the transactions.

We're passing it all back to the consumer."[10] It was also announced that the site was planned to primarily function as a marketplace for members to access offerings from third-party merchant partners rather than having selling goods itself directly.[10]

The site was launched with an initiative called Jet Insider, which was a campaign to spread the word about the company before its official public launch.

Users who signed up were offered six months of site membership for free and a link to use to refer friends and family to sign up. Referrers were given prizes such as lifetime memberships or five year memberships, and the top 10 referrers were given stock options.[citation needed] By February 2015, about 352,000 users had signed up and the early membership program was closed.[12] Beta testers reported mixed reviews on the site's benefits.[5]

As of July 2015, the site had 4.5 million products available for sale.[13] After the beta period, the site was officially launched on July 21, 2015.[5] The plan to use a fee-based membership model was dropped in October 2015.[15] In November 2015, was rumored to be raising $500 million, but ended up raising $350 million in venture capital led by Fidelity.[6]

In May 2016, was reported to have been valued at $1.3 billion in its latest funding round and had launched a pilot program for a grocery delivery service similar to AmazonFresh.

However, the site was also reported to be "bleeding money".[16]

In August 2016, The Wall Street Journal reported that Walmart was in talks with to acquire the company.[17] It was announced on August 8, 2016, that Walmart would acquire for $3.3 billion ($3 billion in cash and up to $300 million in stock paid out over time to the founders and other selected individuals at the company).[18][19][20][21] In December 2016, completed the acquisition of ShoeBuy from IAC.[22] ShoeBuy was re-branded as shortly after the acquisition closed.[23]


One of core features of Jet is the "realtime pricing algorithm", which, according to cofounder Marc Lore, aims to gauge "the true marginal cost of getting that product to [customers]".[24] Items are priced based on their locations in distribution centers.

If, for example, a user purchases several items that are all located in the same distribution center, their price would be lower than if they are located in separate centers.[24] If the user waives their right to return an item, the item decreases in price.

Paying by a less expensive form of payment, for example by using a debit card rather than a credit card, will also decrease the price. The site is also linked with partner sites such as and the Sony Store.[12]

Jet Anywhere was a program that allowed Jet users to spend money at other venues and earn "JetCash", which could be spent on the actual Jet site. Partner sites in the program included Ann Taylor, Bloomingdale's,, and Nike.[25] Jet Anywhere was ended in March 2017.

Jet ran into some backlash in August 2015 after displaying some links to other websites as if they were partnering sites, when in fact they were not.[26] Businesses such as Macy's, Walmart, and Home Depot detached themselves from Jet because of the incident. Jet removed all the links to sites of businesses that requested removal.

Jet's chief customer officer stated that the businesses that wished to be removed viewed Jet as a competitor.[26]

Business model[edit]

Prices are generated by the pricing algorithm that adjusts the price of the contents in the cart based on distribution centers the items come from.

The Wall Street Journal reported in July 2015 that in a test purchase on the site, Jet had sold the newspaper 12 items for $275.55 that had cost the site $518.46 – losing $242.91 on the transaction.[13]

The Jet Partner program allows companies to sell their products on Jet's site by registering for an account and integrating application programming interface (API) components into their systems.[27]

See also[edit]


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  9. ^Peterson, Hayley; Green, Dennis (June 12, 2019).

    Belajar Saham : IPO (Initial Public Offering)

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  10. ^ abcdStone, Brad (January 7, 2015). "Amazon Bought This Man's Company. Now He's Coming for Them".

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  11. ^Shontell, Alyson (2015-01-12). "Top Startup CEO Uses 10-Tier Plan To Keep Employees From Fighting Over Salaries And Demanding Raises".

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  12. ^ abcMac, Ryan (February 11, 2015).

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  13. ^ abcWinkler, Rolfe (July 20, 2015).

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  14. ^Mac, Ryan (January 9, 2015).

    "'s Mark Lore on Coexisting with Amazon and Why One-Hour Delivery is Overrated". Forbes. Retrieved July 27, 2016.

  15. ^della Cava, Marco (October 7, 2015). " grounds its $50 annual membership".

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  16. ^Rao, Leena (May 11, 2016). "Jet Takes Its Fight With Amazon to New Turf: Grocery Delivery".


  17. ^Bensinger, Greg; Nassauer, Sarah (2016-08-03).

    In the blog

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  18. ^Rey, Jason Del (2016-08-08).

    Online Retailer Wayfair Leads List Of 6 IPOs Thursday

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  19. ^Malcolm, Hadley (2016-08-08). "Why Walmart is spending $3B for online seller". USA Today. Retrieved 2016-08-11.
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  21. ^Dignan, Larry (2016-08-08).

    Video: New online retailer Jet takes on Amazon

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  22. ^Levy, Nat (2017-01-06). "Walmart buys Zappos competitor ShoeBuy for $70M to help battle Amazon in online apparel".

    GeekWire. Retrieved 2017-01-09.

  23. ^Carlock, Catherine (23 May 2017). " planning to double HQ size, hire 90 with move to Charlestown".

    Providing buyers with initial capital gain ipo underpriced

    Boston Business Journal. Retrieved 21 December 2017.

  24. ^ abHarpaz, Joe (August 5, 2015). "Will's Smart Cart Disrupt Ecommerce?". Forbes.

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  26. ^ abWinkler, Rolfe (August 6, 2015).

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  27. ^"Jet Partner Portal".

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