E-commerce startup Jet's logo and July launch-day graphic are reminiscent of The Jetsons — but whether the company is a whimsical fantasy or a contender in the online marketplace remains up in the air.
Last week Jet abandoned its $50 membership fee to compete with discount giants, said Ted Zoller, associate professor and director of the Center for Entrepreneurial Studies at UNC's business school.
“They’re trying to steal from Amazon customers, but I think they’re likely going to steal from Costco.com, Sam’s Club, Walmart and even Kmart,” he said.
Backed by millions of dollars from the likes of Google and Goldman Saachs, Jet blends business models from Amazon and Costco.com with novel bargain-hunting technologies. The company uses a bundling mechanism for products that eliminates attendant shipping costs.
Zoller said these features could appeal to retailers such as Google and Amazon, which might seek to acquire the startup.
“The main value is the algorithm technology they’ve developed to make distribution more efficient," he said. "Whereas now (merchandise) is being shipped in big containers on ships across the world, you’re going to see the source of products actually becoming more regional.”
Scott Rockart, assistant professor of strategy and entrepreneurship at Kenan-Flagler, said Jet might succeed as a company if it improves on Amazon's business model, which has maintained low profit margins since its inception.
“…I do think (Jet) may be able to carve out a valid business by targeting specific products that customers buy on a regular basis that may have higher margins.”
But Ashish Arora, professor of business administration at at Duke University's Fuqua School of Business, is skeptical Jet could contend with Amazon.