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Facing Cash Crunch, Retailer Jet.com Racing to Complete Funding Round

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Re: Facing Cash Crunch, Retailer Jet.com Racing to Complete Funding Round

#71

Post by HillRat »

unclebucknasty wrote: post #2

Jet.com doesn't seem to understand that Amazon can take losses in retail because they have margin from other sources--like AWS--as well as an overall ecosystem. And now, Amazon shows quarterly profits. They can go even deeper with discounts in retail. Jet is just not going to win by simply undercutting Amazon as a pure retail play. They're just adding to the already exorbitant burn rate generated by their marketing t…

Specifically, Amazon's marketplace subsidizes everything Amazon sells itself. That 15% cut for listing and checkout is a hell of a rentier model, and makes up for their losses in things like warehousing and shipping actual goods. If you want to compete with Amazon as a virtual big box, you're just doubling down on a model that doesn't even work for them.

Re: Facing Cash Crunch, Retailer Jet.com Racing to Complete Funding Round

#72

Post by darksaints »

dewitt wrote: post #13

I put in an order when Jet launched. No joke, from the best I can tell, they sent someone to a physical Walmart, where they purchased the product at full retail, for more than they charged me , packaged it up, and shipped it to me with free two-day delivery. But they'll make it up on volume, right? Smart people have said, "do things that don't scale." I guess Jet took that at face value.

There are stories at Amazon from the old timers about the good old days when they would make shopping trips to B&N or Borders to buy books that they listed as in stock but never actually had in stock. When I first started working there, I felt like it was a cool story about how scrappy and hard working they were. In retrospect, I think it was more likely just a terrible waste of time and cash.

Re: Facing Cash Crunch, Retailer Jet.com Racing to Complete Funding Round

#73

Post by saosebastiao »

princeb wrote: post #29
bsdpython wrote: post #23

Earlier quoted context omitted.

That's exactly what Marc Lore did to start his previous company: https://en.wikipedia.org/wiki/Diapers.com

diapers.com sounded like a silly pets.com kind of business - turns out amazon bought it together a few sibling companies like soap.com for $550m. so this guy seems like he could actually make it work.

Except it isn't actually working. Maybe they still have a little bit banked, but from the sounds of it, they have burned about $200M in about a year and a half. Nobody survives that kind of cash flow burn.

Re: Facing Cash Crunch, Retailer Jet.com Racing to Complete Funding Round

#74

Post by jsprogrammer »

dangrossman wrote: post #14
dewitt wrote: post #13

I put in an order when Jet launched. No joke, from the best I can tell, they sent someone to a physical Walmart, where they purchased the product at full retail, for more than they charged me , packaged it up, and shipped it to me with free two-day delivery. But they'll make it up on volume, right? Smart people have said, "do things that don't scale." I guess Jet took that at face value.

I ordered a wireless router from Jet. They filled my order by ordering it on Newegg and having it shipped to me. If they don't have stock of something on their website, they'll buy it somewhere else rather than lose the sale.

Subsidized, out-of-stock products for everybody!

Re: Facing Cash Crunch, Retailer Jet.com Racing to Complete Funding Round

#76

Post by bondibox »

A couple points that have been missed in the comments. #1 Amazon is just now starting to turn a profit. That's 20 years of losses. #2 Amazon seller's fees are huge, especially for items less than $10. I can sell Samsung 18650 batteries in my online store for less than Samsung sells the same battery for on Amazon. Customer demand is only one side of the coin, there is also vendor demand to consider.

Re: Facing Cash Crunch, Retailer Jet.com Racing to Complete Funding Round

#77

Post by baddox »

MichaelGG wrote: post #47
dayaz36 wrote: post #43

Earlier quoted context omitted.

Actually most stores now do price matches to Amazon (including best buy and target among others), so there is no use for Amazon for me now. I used to go to best buy just to test the equipment before buying on Amazon, now I just show them the Amazon price on my phone and they match it. No shipping fee no waiting and cheaper. I think I'm going to have to try Jet.com now that Amazon is worthless

I guess you're one of the folks that would not pay a premium to simply not deal with ever having to set foot in a Best Buy. Returns? Gotta go to the store. Want a sightly different model (for instance the newer Canon Powershots are a downgrade) - wait for them to get stock. Plus the obnoxiousness of going to those stores. It's great you like getting out, dealing with retail and advertisements. But I think you aren't…

I would gladly pay 20% markup to not have to go into a brick and mortar store for pretty much all products I buy.

Re: Facing Cash Crunch, Retailer Jet.com Racing to Complete Funding Round

#80

Post by icebraining »

mrdrozdov wrote: post #57

Is Jet doing anything exciting on the Software Engineering side of things?

Apparently, they have a pretty large stream of real-time price updates, powered by F# on Azure. Hanselminutes had an episode with (one of?) their senior software engineers recently[1]. According to the podcast, they're calculating prices based on a lot of factors, then sending them so fast to Google (Shopping, I suppose?) that Google's API was the bottleneck.

[1] http://hanselminutes.com/494/jetcom-scales-with-azure-f-and-...

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