For any online retailer, the first and foremost thing is how to generate business by giving a tough fight to the leader in the space, Amazon.com, Inc. (NASDAQ:AMZN). A startup Jet.com raised $225 million and its objective is to earn its slice of pie from the online retail shopping. The company is ready to stick to basics without disturbing the set up to win customers by providing savings to them.
Online Marketplace
The startup is unveiling its online marketplace with a promise to get the best price for its customers for any product that the customers want to buy. Jet.com’s wants to ensure that it is a place where the customers think first on their requirements. That included everyday stuff like toilet paper, a new speaker, toothpaste, and anything.
The company is trying to attract customers with a $50 membership fee for every year to gain access to its goods. That will ensure lower prices, as well as, savings. The company claimed that members could save an average $150 every year. It might have been similar to that of others providing plenty of options. It remains to be seen as to how this will wean away customers from Amazon.com, Inc. (NASDAQ:AMZN) or Wal-Mart Stores, Inc. (NYSE:WMT), and Target Corporation (NYSE:TGT).
Trying To Do Different
Jet.com believes that it can change the way the retailers are currently working. The company’s EVP and Chief Customer Officer, Liza Landsman, said that the company was trying to do things differently. That is everything that the customer wants to buy, be it TVs or toilet paper. The registered customers would get 10 – 15% discount on what the customers spend without spending anything else except visiting its site and become a member.
However, it will not be easy for Jet to succeed since Amazon.com, Inc. (NASDAQ:AMZN) or Wal-Mart Stores, Inc. (NYSE:WMT) will not sit idle to allow it a free run. The startup should also be ready to suffer losses for several years. That will force the company to struggle for funds to survive.
Amazon.com, Inc. (Amazon.com), incorporated on May 28, 1996, is an e-commerce company. The Company offers a range of products and services through its Websites. The Company’s products, offered through consumer-facing Websites, include merchandise and content that the Company purchases for resale from vendors and those offered by third-party sellers. The Company offers its own products as well as third-party products across various categories, through its retail Websites and through its mobile Websites and applications. It also manufactures and sells electronic devices, including Kindle e-readers, Fire tablets, Fire TVs, Echo and Fire phones.
The Company offers programs that enable sellers to sell their products and fulfill orders through the Company’s Websites and the sellers’ own Websites. It serves developers and enterprises of various sizes through Amazon Web Services (AWS), which offers a set of global compute, storage, database, analytics, applications and deployment services. It serves authors and independent publishers with Kindle Direct Publishing, which is an online platform that lets independent authors and publishers choose a 70% royalty option and make their books available in the Kindle Store, along with Amazon’s own publishing arm, Amazon Publishing. It also offers programs that allow authors, musicians, filmmakers, application developers and others to publish and market content.
Amazon.com operates in two segments: North America and International. The North America segment of the Company focuses on retail sales earned through North America-focused Websites. The International segment focuses on the Company’s operations done through its international Websites. The Company’s retail Websites include www.amazon.com, www.amazon.co.uk, www.amazon.de, www.amazon.co.jp, www.amazon.fr, www.amazon.ca, www.amazon.cn, www.amazon.it, www.amazon.es, www.amazon.com.br and www.amazon.mx. The Company through its Websites offers products under various categories, including instant videos, digital music, Appstore for Android, Amazon Cloud Drive, Kindle E-readers and books, FIRE tablets, FIRE TV, FIRE phone, books and audible, movies, music and games, electronics and computers, home, garden and tools, beauty, health and grocery, toys, kids and baby, clothing, shoes and jewelry, sports and outdoors, automotive and industrial, and credit and payment products.
North America
The North America segment of the Company is engaged in the retail sale of consumer products, including from sellers.Amazon.com also offers digital content subscriptions through North America-focused Websites, such as www.amazon.com and www.amazon.ca. The segment also includes the operations of AWS. The North America segment includes export sales from www.amazon.com and www.amazon.ca.
International
The International segment of the Company is engaged in the retail sale of consumer products and digital content subscriptions through internationally focused Websites. The International segment includes export sales from these internationally based Websites (including export sales from these sites to customers in the United States and Canada).
Shayne Heffernan Ph.D.Economist/Hedge Fund Manager
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