Rafi Mohammed

The Problem with Jet.com's Pricing Model

Posted on July 22nd, 2015 (0 Comments)

As you likely heard, yesterday Jet.com opened its virtual retail doors with the pledge that its shoppers will save 10% - 15% over rival ecommerce sites. Pretty alluring, right? In addition, Jet is adopting the Costco two part pricing (member and product purchases) – Jet pledges to make no profit from product purchases and instead, profit will solely come from membership fees. Sounds great, right?

There are many problems with Jet’s pricing strategy – ranging from it’s hard to fathom that Jet can negotiate product prices as low as rivals such as Wal-Mart to the assumption that Amazon CEO Jeff Bezos is going to roll over and not compete against Jet on price.

Please check out my latest piece for the Harvard Business Review which discusses Jet’s pricing strategy. My advice is to sign up for Jet’s free 90 day membership trial and enjoy the rock bottom prices…while they last! 

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