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.

The company is burning cash like crazy, they totally threw their business plan (to only make money via membership fees) out the window within a few weeks of launching and now they've slashed their originally proposed valuation by 50% in what would seem like a desperate move to get some cash in to keep the fire burning.

All for what? To try and compete with the likes of Amazon and Wall-Mart on price and logistics!?!?! Call me pessimistic, but this looks like its going to end in an expensive train wreck.

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 team.

Unless there's something yet-to-be-publicized about their model, participants in this round are just adding their cash to the bonfire.

What does jet do, exactly? Going to jet.com seems to suggest that they sell laundry detergent and laptops...but this honestly just looks like every other "build yer own ecommerce" website that is just an amazon webstore.

Like...why would they be getting a $500M investment?

Say what you want about Jet in particular but there's a real market opportunity here. Nobody but Amazon has much of a business in the "everything store" category, and Amazon's prices have gotten high.

Compare almost anything there to the price at your local Wal-Mart, Target, etc. and there's a significant gap. Significant enough that you could buy it at retail prices, sell it at Amazon prices, ship it from UPS, and still break even.

If nothing else we need a solid competitor to keep them honest.

Not knowing much about the company's internals, my guess is this will end badly.

Consider:

* Fidelity is supposedly leading the investment in Jet.com -- not exactly a leading VC or PE investor.

* The investment totals $500 million -- not exactly a small one-off deal that flies under the radar.

* Jet.com is on track to burn all that cash in a year or so -- not exactly a lot of runway.

--

Edit: added "or PE" to first bullet point in response to comment below.

I honestly want a list of Jet.com's newest investors so I can remember to never do business with them. This is the most obvious tire fire of an investment I've ever seen in my life (I missed seeing the late 90s dot-com bubble in person).

The brand is completely irrelevant, they only have sales because they're losing money on each unit, they're losing $50 million per month and plan to keep losing that much ... what exactly is supposed to be good about this model/company?

Whoever designed their color scheme was nuts. The hue of their purple is incredibly nauseating, at least to me.

Oh man. You'd have to be seriously high on jet fumes to throw more money into the this sinkhole. I don't see this playing out well.

Jet is starting to look like yet-another-startup run by a rich guy who thinks throwing exhorbent amounts of money at a problem solves everything

The first I heard about jet.com was through this hanselminutes podcast - http://hanselminutes.com/494/jetcom-scales-with-azure-f-and-....

Their tech stack looks interesting and despite the anecdotes from this thread and the fact that I haven't ordered anything from them yet (I am outside the U.S), I am inclined to give them the benefit of the doubt.

The Amazon monopoly needs some competition and better it come from a company that's innovating with a better tech stack. I am confused about why they decided to get off a membership model, though...

Jet.com's strategy is to get large enough that the brands have to list on their site (like they do an all major marketplaces). Many of the larger brands are currently sitting on the sidelines "seeing how it goes". You can think of their current strategy as "buying one side of a two sided marketplace". This may or may not work, but calling the strategy stupid just demonstrates a lack of familiarity with ecommerce marketpaces.

If Jet.com's strategy does work then its cemented itself as a multi-billion $ marketplace. In an era of near-zero % interest rates, funds are willing to take that risk for the potential return.

Earlier this year the CEO said “I don’t have any more plans to raise more capital.” And at the time there he downplayed the size of the investment given that it was before the product was released. Back then it was implied that it would help ensure that they'd not have to raise money for quite a while.

I wonder what happened to that plan.

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.

As somebody who works in ecommerce, I don't see the upside for a merchant to list there. The omnichannel solutions pushed pretty hard to onboard merchants to it.

Maybe somebody could persuade me

Also, where are they spending this much on marketing, they've got almost no marketing presence imo?

I had never heard of them until now. I don't think this is going to have a happy ending.

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

Jet.com is going to flame out so quickly, and fairly predictably as well to a lot of outsiders. I wonder what the Jet.com investors were smoking, must have been some good stuff.

Arg paywall! Clicking through from this link goes under it to full story: http://www.techmeme.com/151104/p16#a151104p16

Without any paywall - http://pastebin.com/17fwFaut

> If nothing else we need a solid competitor to keep them honest.

I completely agree which is why I've been trying to support Jet by buying "house supplies" through them instead of Amazon.

Maybe I'm full of FUD, but I just see a day in the not-too-distant-future where are only option is Amazon.

I'm curious to see what items this applies to. I buy most things from Amazon, and when I comparison shop the prime shipping usually negates any price difference with other online retailers, and the price is very rarely beat by any in store prices where I live. Anecdotal to be sure, and I stick to items fulfilled by Amazon or direct from Amazon (mostly due to prime), but I see a lot of savings this way. And that doesn't include my time savings which has a measureable value top.

> Say what you want about Jet in particular but there's a real market opportunity here. Nobody but Amazon has much of a business in the "everything store" category, and Amazon's prices have gotten high.

But, on the things I just spot checked, still the same or lower than Jet.com has for the same items.

> Compare almost anything there to the price at your local Wal-Mart, Target, etc. and there's a significant gap. Significant enough that you could buy it at retail prices, sell it at Amazon prices, ship it from UPS, and still break even.

IME, even recently, when I've checked Amazon prices online while standing in the stores, the gap usually went in the other direction.

Amazon doesn't want to compete on price. They want to compete on value.