Jet.com

Jet.com
Company type	Subsidiary (2016–2020)
Industry	E-commerce
Founded	2014; 12 years ago
Founder	Marc Lore, Mike Hanrahan, Nate Faust
Defunct	June 4, 2020
Fate	Discontinued and integrated into Walmart.com
Successor	Walmart.com
Headquarters	Hoboken, New Jersey, United States
Area served	United States
Key people	Marc Lore (co-founder), Simon Belsham (former president)
Products	Online retail marketplace
Owner	Walmart (2016–2020)
Number of employees	Majority transitioned to Walmart.com in 2019 (2019)
Parent	Walmart

Jet.com was a United States-based e-commerce enterprise headquartered in Hoboken, New Jersey, established in 2014 by co-founders Marc Lore (previously founder of Diapers.com), Mike Hanrahan, and Nate Faust. The company raised a total of $820 million through four separate funding rounds, attracting investments from GV, Goldman Sachs, Bain Capital Ventures, Accel Partners, Alibaba Group, and Fidelity. The service officially launched in July 2015. By September 2016, Jet.com had become a Walmart subsidiary.

After experiencing a downturn in sales following the acquisition, the majority of Jet.com’s workforce transitioned to roles within Walmart.com in June 2019, coinciding with the exit of Jet.com's president, Simon Belsham. Walmart formally discontinued Jet.com on June 4, 2020, redirecting its web traffic to Walmart.com.

History

Following the sale of Diapers.com to Amazon in 2010, Marc Lore hypothesized that consumers might tolerate longer delivery windows if it meant saving money on purchases. He noted that most existing online retailers predominantly catered to affluent shoppers who valued convenience above cost savings. Lore’s vision was to develop a platform combining a membership-based pricing model inspired by Costco with the extensive product variety typical of large-scale e-commerce sites like Amazon Prime, but with an emphasis on affordability rather than expedited shipping. After presenting this concept, Accel Ventures contributed $1 million as seed funding. To promote fairness and minimize compensation conflicts, Lore introduced a structured 10-level salary and title framework assigning new hires according to their experience.

A central innovation was a dynamic pricing mechanism encouraging customers to buy in bulk and select products from the same distribution center to lower fulfillment expenses. As shoppers added items to their carts, they benefited from incremental price reductions and could choose to waive free returns at checkout for additional discounts.

Initially, Jet.com planned to charge a $50 yearly membership fee following a 90-day trial period, deriving profits solely from memberships rather than product markups, which were sold at cost. The platform primarily aimed to function as a marketplace hosting third-party sellers instead of directly managing inventory.

Prior to launch, the company ran Jet Insider—a referral initiative offering six months of free membership along with incentives like lifetime memberships and equity grants for top referrers. By February 2015, this program had attracted 352,000 participants and was subsequently closed. Feedback from beta users on the benefits was mixed.

By July 2015, Jet.com featured approximately 4.5 million products and officially went live on July 21. The membership fee was eliminated in October 2015. In November of the same year, Jet secured $350 million in venture capital funding led by Fidelity amid speculation of a $500 million raise. By May 2016, its valuation had climbed to $1.3 billion as it trialed a grocery delivery service akin to AmazonFresh, though it continued to incur financial losses.

In August 2016, The Wall Street Journal disclosed Walmart’s negotiations to acquire Jet.com. The transaction concluded on August 8 with Walmart paying $3.3 billion—$3 billion in cash plus up to $300 million in stock distributed over time to founders and selected employees. In December 2016, Jet expanded by acquiring ShoeBuy from IAC, subsequently rebranding it as Shoes.com.

Features

One of Jet's standout innovations was its real-time pricing algorithm, which cofounder Marc Lore described as a system to calculate "the true marginal cost of delivering that product to [customers]." Prices were dynamically set according to the distribution center location of each item; buying several products from the same warehouse resulted in lower costs compared to purchasing from multiple centers. Additionally, prices could be reduced if customers opted out of returns or selected more economical payment options, such as using debit cards instead of credit cards. The platform also partnered with retailers including TigerDirect.com and the Sony Store for integrated offerings.

The Jet Anywhere program allowed shoppers to accumulate "JetCash" rewards by making purchases at partner stores like Ann Taylor, Bloomingdale's, Hotels.com, and Nike, which could then be redeemed on Jet.com. This rewards initiative concluded in March 2017.

In August 2015, Jet encountered criticism after listing retailers such as Macy's, Walmart, and Home Depot as partners without obtaining their approval. These companies viewed Jet as a rival and consequently ended their affiliations. Following their requests, Jet promptly removed all contested partner links.

Business model

Jet’s pricing mechanism tailored cart totals based on the locations of item distribution centers. A trial conducted in July 2015 by The Wall Street Journal demonstrated that Jet sold 12 products for $275.55, although their combined cost was $518.46, resulting in a loss of $242.91 on that order.

Through the Jet Partner program, businesses could list merchandise on Jet by creating accounts and implementing API integrations within their operations, enabling efficient inventory tracking and order processing.

History

Features

Business model

See also