I have to hand it to Marc Lore. Two spectacularly unprofitable businesses, with two spectacularly large exits. If this guy had been doing startups in the late 90's, he'd probably be the worlds first trillionaire by now.
He'd be yuge.
Wal-Mart in Talks to Buy Web Retailer Jet.com for $3B
51–60 of 196 posts
Re: Wal-Mart in Talks to Buy Web Retailer Jet.com for $3B
#52Earlier quoted context omitted.
Just got a flyer in the mail offering $10 off my next 3 purchases. That's not cheap.
Yeah, I even remember a rumor going around that they were dropshipping for some items. If something was out of stock they would get it from newegg or amazon and send it to you.
That's no rumor, it's actually what they do. https://hbr.org/2015/07/the-problems-with-jet-coms-pricing-m...
Re: Wal-Mart in Talks to Buy Web Retailer Jet.com for $3B
#53Note Alibaba is the main investor. Ali wants to use Jet.com to compete with amazon in US market.
Re: Wal-Mart in Talks to Buy Web Retailer Jet.com for $3B
#54Jet.com was founded in 2014. How did they get enough traction to be viable when there are so many other online retailers like Amazon, and all the other brick and mortar retailers that also have large online presence.
They raise about $820 million and just spent virtually all of it, outside of operating expenses on marketing. For almost a year, they were advertising everywhere before they had even launched. If i am not mistaken, i think they were boasting of the highest number of pre-launch signups for any company. So that already gave them a huge valuation and potential traction. They eventually launched, with a mixed reception,…
[deleted]
Re: Wal-Mart in Talks to Buy Web Retailer Jet.com for $3B
#55This buyout is based on FUD, and FUD-based investment is a recipe for disaster.
From the OP:
>But for both Jet and Wal-Mart, Amazon’s frenzy of warehouse construction and fast delivery—as quickly as one-hour—have proved formidable. The retailer has logged three straight quarters of record profit while locking in an estimated 60 million members to its $99-per-year Prime service, cultivating a loyal customer base and giving consumers fewer reasons to shop at traditional stores.
The answer is not buying a unicorn startup with seemingly no fundamental advantage over Amazon. If I were Wal-Mart, I would take the $3B and try to build a great technology organization and/or fund Wal-Mart Labs more. So much of what makes Amazon better is the data accrued over the last 18 years and the insight mined from them by their super-talented team.
And Jet.com is definitely not going to give that to Wal-Mart overnight. If I were them, I'd focus on long-term viability, not a short-term hack to placate shareholders.
Re: Wal-Mart in Talks to Buy Web Retailer Jet.com for $3B
#56Jet.com was founded in 2014. How did they get enough traction to be viable when there are so many other online retailers like Amazon, and all the other brick and mortar retailers that also have large online presence.
I think they've been spending a lot of money getting new users. They've been offering new accounts discounts, I think you can get 15% to 20% off right now. They've had a bunch of items show up on some discount shopping forums like slickdeals. I think they've lost money on some purchases.
15% off first 3 purchases, no exceptions. You can get the discount on electronic items that never go on sale. Plus free shipping and return shipping.
They're probably loss leading on almost every product sold right now.
Re: Wal-Mart in Talks to Buy Web Retailer Jet.com for $3B
#57When the article says Wal-Mart is closing stores, how does it count when they close a normal store and open a super store? Also, at this point I feel safer buying cables and chargers from Wal-Mart. I now worry about any retailer doing fulfillment for other sellers.
Unfortunately Walmart.com is now selling stuff from third party sellers.
dammit..... so is NewEgg
Is someone actually not doing this?
Re: Wal-Mart in Talks to Buy Web Retailer Jet.com for $3B
#58Earlier quoted context omitted.
Just got a flyer in the mail offering $10 off my next 3 purchases. That's not cheap.
Yeah, I even remember a rumor going around that they were dropshipping for some items. If something was out of stock they would get it from newegg or amazon and send it to you.
I have a theory about this, it happened to us when we bought some childrens books on Jet. They came in the mail from Barnes and Noble with a packing slip that had a price higher than we paid included with it.
It doesn't explain the Amazon example you mentioned, but I was under the impression they have special affiliate arrangements with 3rd party retailers and that they were somehow being allowed to invest their affiliate commissions into the consumer (which is typically not allowed).
So if they're making 15% affiliate commissions from B&N they're able to drop the consumer price 10%. They've been focused on scale more than margin since day 1, so it would make sense that they would just operate on something razor thin and continue to drive home that they have unbeatable prices.
For the 3rd party retailers it's a way to compete with AMZN on price without actually having to drop their prices and I can see how that would be attractive to a retailer that's losing market share.
No basis for this, just one man's theory.
Re: Wal-Mart in Talks to Buy Web Retailer Jet.com for $3B
#59Earlier quoted context omitted.
When you are an investor and have tens or possible hundreds of investments, 3x will not cover much. You need one to leave orbit in order to stay in the game.
You can have 1 leave the orbit or 25% of them triple your money.
25% of them making money is very unrealistic.
Re: Wal-Mart in Talks to Buy Web Retailer Jet.com for $3B
#60When the article says Wal-Mart is closing stores, how does it count when they close a normal store and open a super store? Also, at this point I feel safer buying cables and chargers from Wal-Mart. I now worry about any retailer doing fulfillment for other sellers.
Walmart has been offering 3rd party sellers/products for more than a few months now, if I had to guess. I bought a USB cable from Cable Matters, but the names of some of the companies/sellers on Walmart's website also lead me to believe they are selling products which aren't certified and have the correct components to be safe with our devices.
Well, guess I'm going to have to find someone else to order from next time. This is just so disappointing, its like the retail version of flash ads.