Jet.com Raises Prices Slightly, Drops $50 Membership Fee

Just three months after launching, e-commerce startup Jet is already shifting its business model as it attempts to grab just a bit of Amazon’s (AMZN – Get Report) market share. The move will allow the startup to reach more consumers, he said. Chief Customer Officer Liza Landsman said the move also gives Jet the ability to add a membership fee later for access to additional perks, without making the fee too high for most people.

On top of that, Jet customers also earned the Smart Cart savings by building bigger orders that are more efficient for Jet’s partners to fulfill – either because they contain multiple items located in the same warehouse or in a warehouse close to the shopper.

“When we launched Jet, we envisioned a shopping club that would empower both consumers and retailers by exposing embedded costs and creating new ways to eliminate them”.

Jet.com had planned to operate at a break-even on all sales, with membership fees providing its profit.

The firm can bring a payment very soon and wasn’t expensive anyone for getting a account even so anyway, consequently its exclusion isn’t a massive adjust, said Sucharita Mulpuru, observer at Forrester Research Inc.

Jet.com has only been around for three months and claimed that it would offer prices up to 15% lower than Amazon’s. Profitero reported in July that the average price of goods sold on Jet was 9% lower than Amazon and 6% lower than Walmart.com.

“It turns out 4 to 5 percent is enough of a discount for shoppers”, Lore told Re/code’s Jason Del Rey.

Mr. Lore declined to comment for this story. Of the seven product categories analyzed by Profitero, pet supplies, including food and toys, afforded the biggest savings.

The change will likely attract more customers, but it means Jet is losing what it expected to be its main source of profit.

Numerous retailers were unaware their merchandise, photos and product descriptions, in a few cases, were being listed on Jet’s site. The total cost of the items was about $276. “The starting price for certain items may have increased as a result, but you can still expect the overall Jet savings you’re used to”.

Customers may feel a slight pinch on their wallets, though.

For what it’s worth, no customers were paying for Jet.com at this point, the company tells us, because everyone was still participating in the free trial that Jet offered when it first launched. Jet still touted the service on its site Wednesday, though only for items “no longer available” after an order is placed.