For the past year marketplace startup Jet.com has been touted as a serious rival to Amazon (with cheaper prices, to boot), but the month since its public launch has shown that Jet.com is only a threat to itself.
The WSJ reports that Jet.com is catching flack from other retailers for its mishandling of its affiliate program, while at the same time I have a couple reports from customers that the experience of shopping at Jet.com more closely resembles the Spruce Goose than the Concorde.
One reader has privately recounted a tale similar to a public comment left last week:
I had placed my first order with jet.com and here is my short experience
1. After 4 days I received an email that they cancelled the most expensive item on my order – Steam Mop – because the listing was incorrect and they could not find it. Well whose mistake is this? And why should I suffer? PLUS after 4 days when you are expecting that item… Come on Jet.
2. After 6 days I receive an email saying some of the items on my order will be delayed. The email did not have details about what items were those. So Pathetic. Now I will have to wait for the order to find out which item I need to order again from some other seller.
3. After 11 days of my order, I receive another email saying one more item is cancelled because of unavailability. This is not acceptable at all. At least not something you expect from other online sellers – and not in the first order. Pity on you – Jet.
So after this experience, I don’t think I am going to trust Jet.com at all for any of my future order. Long live Amazon – Short live Jet.
Oh and did I forget to mention… they issued me a $2 credit for all this non-sense. Feel good now?
It would be ludicrous to predict the demise of Jet.com based on two negative comments, so I won't go there.
But I will note that I've checked past coverage of Jet.com. After scanning the comment sections of a dozen articles on major news sites, I could only find two other commenters who had done business with the startup (this, in spite of a year of gushing press coverage).
Perhaps consumers find Jet.com's service less appealing than the startup's "partners" find its business practices.
The WSJ reported on Thursday that the marketplace had been hit by a hailstorm of criticism from retailers. It seems that many did not appreciate the way that Jet.com used their logos to lend gravitas to its affiliate/cashback program:
Dozens of the nation’s largest retailers including Macy’s, Amazon.com, and Home Depot have quickly moved to disassociate themselves from new discount retail website Jet.com.
The retailers complained to Jet after discovering it had placed links to their sites without permission, promising its own members cash back for making purchases after clicking the links.
A comparison of Jet’s website on July 1 and on Tuesday reveals that more than 100 brands owned by at least 70 different companies have been removed, most in the week after the company’s July 21 launch.
Companies with multiple brands whose links have been withdrawn from Jet include heavyweights Wal-Mart Stores, Gap, Walgreens, Williams-Sonoma and L’Oréal SA. “If someone is using our brand without our permission, there are a multitude of concerns, and we’re not going to allow it,” said a Home Depot spokesman, who added that Jet was cooperative in removing his company’s logo after being asked to do so.
Jet.com would not be the first retailer to set up or participate in an affiliate program, but the way this startup went about it rubbed retailers the wrong way.
Rather than sign deals with each of the retailers mentioned above, Jet.com took a shortcut. It signed up with Viglink, which offers an affiliate service where non-retail sites (such as this blog) can earn a referral fee when they send consumers to retailers.
That service is funded by the retailers which pay the sites for the referrals, so you can understand how they would feel about paying a competitor for the customers it sends in their direction. And just as importantly, the retailers did not appreciate their logos being used to promote a competitor's service.
Jet.com first started getting attention in May 2015, but it only really became the press's darling a year ago when Diapers.com co-founder Marc Lore announced that his new startup had raised $55 million and planned to compete with Amazon. the company then went through a Series B funding round in February which raised $140 million, bringing Jet.com's total capital to $220 million (including $25 million in debt).
Jet.com's claim to fame is a $50 membership program that offers access to a marketplace where consumers are supposed to be able to find great deals. The startup had also talked about offering better deals to consumers who were willing to forego certain privileges, like paying with a credit card, but it's not clear how many of those special offers have been launched.