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You Might Actually Want To Use Amazon Rival Jet.com Now

The Huffington Post The Huffington Post 7/10/2015 Jenny Che
JET © Alexander Kaufman/The Huffington Post JET

Jet.com has a bold idea for luring customers: getting rid of membership fees.

Yep, the discount retailer, which launched in July as a cheaper Amazon rival, is cutting its $50 subscription.

By promising that it would beat competitors' prices, Jet had relied on the Costco-style membership fee as a major source of revenue. But the rapid success of its Smart Cart program, which offers additional savings to people who place larger orders, convinced the company to forego the traditional membership route and instead bet big on drawing in more users to compensate for the slash.

Customers may feel a slight pinch on their wallets, though. Under the subscription model, Jet buyers saw average savings of around 10 to 12 percent compared to other retailers. Now, that number is dropping to between 7 and 9 percent; shoppers whose orders are shipped from nearby warehouses could end up saving even more.

"By enabling even more people to embrace this new way of shopping, we believe we can more fully realize our vision of a reshaped e-commerce landscape and deliver unprecedented value to consumers and retailers," CEO Marc Lore wrote in a post on Medium.

The decision suggests that Jet is confident about its ability to get customers to turn away from big online giants like Amazon, which offers its own $100 annual loyalty service, called Prime. And Jet has the funding to back up this confidence -- it raised $220 million earlier this year and will spend $100 million on marketing in its first 12 months, a huge figure for a startup. When Jet.com launched this summer, the company showered the media with branded swag.

But it ran into trouble with some retailers soon after it launched. Walmart, Gap and Macy's were among those that pulled their brands from the site after discovering that it had promised shoppers cash back for clicking on links to those companies' sites without permission from the sites.

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