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Amazon Rival Jet.com Nixes $50 Membership Fee

Amazon Rival Jet.com Nixes $50 Membership Fee

Jet.com, the e-commerce site positioned as an Amazon competitor, is overhauling its business model, barely three months after its debut. The company is doing away with its Amazon Prime-style membership fee, opening up its steep discounts to all shoppers. Jet was previously members-only and charged its clientele a yearly subscription fee of $50–half of what Amazon charges its Prime customers.

Re/code reports that this change is being made just before Jet’s first wave of users are finishing up their free trial. Up until now, CEO Marc Lore–best known for starting Diapers.com and selling it to Amazon–was touting membership fees as a potential source of profit for the company, a key revenue stream given that the site was offering lower prices than its rivals. Now that Jet is accessible to all shoppers, the site will match prices elsewhere; Jet is also banking on its “Smart Cart” feature, which gives customers additional discounts for ordering more products in one go.

Jet’s decision is likely a response to the sheer difficulty of establishing a foothold in the competitive e-commerce industry. The company made its public launch on July 21 and drew the ire of retailers less than a month later due to its affiliate link program, which listed links to other retail sites and offered customers cash back on Jet in exchange for making external purchases through those links.

[via Re/code]

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