Jet Membership Fees Goes Away For Good

But just as the e-commerce site’s free trial is set to end, company officials have chose to ditch the fee model that was to be its prime revenue generator.

We may be dropping the membership fee, but our promise to our customers will remain in place: the ability to save money by placing bigger, smarter orders; 24/7 support from the Jet Heads, our world-class customer service team; free shipping on orders over $35; free returns within 30 days; and the opportunity to earn savings at Jet by shopping on other great sites via the Jet Anywhere program. His credentials and vision for Jet helped him raise 0 million in funding before the site even launched, as investors expressed conviction in Lore’s ability to mastermind another massive success.

On top of discounts on all products, Jet.com’s pricing engine is created to bring consumers more savings when they are willing to play along during the ordering process by building a so-called Smart Cart. Now that it’s dropping the membership fee, the company will try to make profit on each sale.

Jet.com had planned to operate at a break-even on all sales, with membership fees providing its profit. He promised prices up to 15% lower than Amazon’s by plowing the commissions back into prices, as well as rewarding customers for combining orders so that vendors could cut shipping prices.

This means customers won’t have to pay anything up front to shop on Jet, which increases the pool of potential shoppers. Empowering our partners is central to Jet’s mission, and appealing to a wider customer base will enable us to do even more. Originally, products started about 8% cheaper than could be found elsewhere, and the Smart Cart savings would knock off another 4% or 5%.

If Mr. Lore had carried through with his original plan, he would have faced an uphill battle because Jet would need to constantly add new customers to grow revenue with the membership fees. Lore insists this isn’t the case, noting that customers bought $10 million worth of goods through Jet in August and $20 million in September, exceeding Jet’s goals. However unlike Amazon which allows everyone to purchase products through its website without necessarily signing up for Amazon Prime, Jet required everyone to purchase a membership which cost $50. A few retailers asked Jet to exclude them from the program. And raising prices would make it harder for the company to compete against the likes Wal-Mart and Amazon.com for discount shoppers. It also lets brands control which sellers can sell their goods on Jet and what the minimum price is – a control most other big marketplaces either don’t offer or don’t actively enforce. “Retailers told us that if the play is to slash a starting price of an item, that’s less interesting for us”. “We really want to build a community around this brand”, says Landsman.