Amazon "Competitor" Jet.com is Often Cheaper, Study Finds
Earlier today the WSJ reported that someone is already comparing prices between the two sites. Jet.com may still be in beta and offer a more limited selection (5 million items vs 300 million items on Amazon) but that hasn’t stopped data pricing startup Boomerang Commerce from crunching the numbers.
But the research by Boomerang, which was granted early access to Jet.com, does provide a window into how the startup aims to price its products. The study, which looked at 200 products across a handful of categories, found that 188 items sold by both Jet and Amazon were less expensive on the former.
On the whole, Boomerang found that Jet.com was cheaper than Amazon by 27% in its sample. Among goods that are “shipped and sold by Amazon” — those that aren’t offered by third-party merchants — Jet was 17% cheaper. It also found that Amazon was 28% less expensive for items offered under its private-label Basics brand than equivalent products on Jet.
While I think it’s a little crazy to compare prices in a store which isn’t even open yet, this study has me paying close attention. I like low prices as much as the next person, and it looks like the folks behind Jet.com think they can really go toe-to-toe with their much larger competitor.
Jet.com has certainly convinced its investors; the startup has raised $220 million on the best that it can grow a business on a $50 a year shopping club membership while still matching Amazon on price.
I’m not yet convinced that Jet.com’s plan to trade discounts in exchange for using debit cards or waiving returns prove practical.
But Jet.com thinks it can pull it off. "Jet is clearly waging a pricing war with Amazon," said Boomerang CEO Guru Hariharan told the WSJ in an interview. "There are some early indications that Jet is leading on price, but there is still good value in Prime," he said.
I should say so.
If Jet.com is going to require both the $50 a year membership and a minimum order for free shipping then Prime, at $99 a year, is the better value. Amazon Prime has no minimum order size for its free shipping option (on a limited number of eligible items, though).
The nice thing about Prime (besides the free digital streaming) is the fact that I can buy a single item and get free shipping. That is a convenience which Jet.com might not be able to match.
Let’s see what happens when Jet.com flips the switch.