Jet.com cuts its yearly subscription fee

15 % fee

Its idea seemed simple: in return for an annual 50 dollar fee, American customers could buy products from Jet.com at lower prices than on Amazon. A week before the official launch, at the end of July, some 100,000 people had enrolled in the free trial period and the Amazon challenger boasted it would have some 15 million paying customers by 2020, which would result in a 750 million dollar turnover.

Not even three months later, management has now changed its course: the annual fee is gone as Jet.com will rather charge the retailers on its platform a 15 % fee. It may discount that fee on some occasions, because a household appliance worth more than 300 dollars will only carry an 8 % fee.

“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 and founder Marc Lore wrote on his blog.

Jet.com obviously hopes this will help boost its potential customer base, but analysts fear the new business model may in fact harm Jet.com’s biggest asset: lower prices. A small study on the first day showed that Jet.com was 9 % cheaper than Amazon and 6 % cheaper than Walmart. A 15 % fee will not really help increase or maintain that difference…