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What You Need to Know About Jet, Amazon's New Competitor

A primer on the deals site everyone's talking about.
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If you follow the retail business at all, you may have heard about a new site called, an Amazon competitor that launched Tuesday to an enormous amount of hype. That owes to the fact that it's already raised $225 million from investors despite being prepared to lose a lot of money as it gets off the ground. Steering the ship is a guy named Marc Lore, who spent time at Amazon after selling his previous company, Quidsi, to the retail giant for $545 million in 2010. So, Jet's entry into the e-commerce space is high drama and high stakes, to say the least.

Jet, in short, is a shopping club that's promising to deliver its members big savings and the lowest prices on the items they're after — even if that means going outside its retail partner network to buy a product, ship it directly to the customer and absorb the cost of shipping, along with the difference between the lowest price and whatever the retailer is charging. Jet does get a cut of each sale that goes through one of its official retail partners, but that money goes right back to the customer in the form of further savings. So as it stands, Jet's only guaranteed revenue stream is the $49.99 it charges for an annual membership fee, which only kicks in after a 90-day trial period. For Jet to start turning a profit, it's got to get to a massive scale, and it's hoping the allure of deep, deep savings will help it get there.

At the moment, Jet is doing all right in the beauty category, with a range of drugstore and higher-end brands available on its site: Philosophy, Aveeno, L'Occitane, Kate Somerville and Clinique, for starters. Unless you're one of those people who worships at the alter of Sephora's Beauty Insider program, it's a good deal. Two Fekkai hair products, a Benefit bronzer and a bottle of Calvin Klein Endless Euphoria cost $93.51 — about $41 dollars less than it otherwise would, once all of Jet's savings are piled on.

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Fashion is where things get more interesting, though. In that area, Jet is relatively unestablished, although we can assume its overall retail partner network will be growing quite a lot as it amps up its customer base. Searching "shoes" currently yields exactly zero search results. Most clothing shopping that you might now do through Jet takes place via "Jet Anywhere," an alternative way for retailers to pair with Jet. Jet Anywhere sends the customer to the retailer's own website — bringing in a stream of new traffic and shoppers — and Jet will give him or her a percentage of any purchases back as cash. (At the moment, Nike, Urban Outfitters, H&M and J.Crew are all on Jet Anywhere.) For fashion brands that are cagey about handing over the management of their image to an as-of-yet unproven discount site, it's a relatively low-risk way to start working with Jet.

Another particular concern within the fashion space is regulating counterfeit goods — or unauthorized parties selling legitimate items — which Scott Hilton, who manages Jet's retail partnerships, told Fashionista has already been an issue. 

"There's a lot of concern about resellers or people selling counterfeit goods," he said. "It's a challenge. Even some retailers get the wrong product, so we're working with the brands to take down or eliminate that problem." 

To build trust among fashion brands, Jet is clearly going to have to nail that down. Today's just Day 1 of the site's public life, so we'll keeping an eye on how it builds out its fashion game — and, to be honest, probably shopping for beauty products in the meantime.