The Two Sides of Jet.com--A Review by a Customer and a Seller's Agent

2015's most notable e-commerce story is Jet.com. Two days ago, New York Times ran a decent story about the startup's strategy. The company made headlines for 1) growing fast--it now has about 900 employees; 2) crossing the one-million-customers milestone in early November, five months after its launch, and 3) receiving a fresh funding of $350 million right before this year's Black Friday shopping extravaganza.

During the last month, I had an opportunity to be a Jet.com shopper, and at the same time, helped a client launch his store on jet.com. Seeing the both sides of the coin, I found the following:
  • As a jet.com shopper, I was extremely happy. For my first order, I not only got a welcome credit of $20, but also experienced its fast delivery service.  The shopping experience on Jet.com was smooth and when I received my order, it was nicely handled and wrapped (it was a piece of children's furniture).
  • Jet.com is good at affiliated marketing. Shopping on affiliated sites (called JetEverywhere program) can earn JetCash, a reward incentive calculated as a percentage of your order value based on which website/portal lists the product.
  • As a shopper, I wouldn't know which vendor actually sold me the product. Jet.com aggregates many sellers' info and its prices include shipping charges. Jet.com will act as a middleman to go between me, the shopper, and the seller, in case of product defect or return request.

This last point--the unique business model by Jet.com--is where the potential problem could arise.

 As a shopper, I can't review the seller's reputation before purchase. In contrast, Amazon.com has trained me to check a seller's reputation rating before clicking the buy button. It is a feature that successfully keep Amazon.com sellers honest/responsive and buyers feel comfortable. Only after purchase would the seller name on Jet.com is revealed. I was happy about my purchase, so it was not an issue. But what if I didn't like what I received? Would I have a second thought about why Jet.com hides seller's info before a completed transaction?

 When I worked on the other side of the coin--acting as agent for my client to manage his e-commerce store on Jet.com, Jet.com's rules are quite different from others', which I elaborate below.
  • First, its merchandise listing review process was not very transparent. Products that had been uploaded were taken down for further review without further explanation or a timeline for completion. Sellers are left in the dark about status.
  • Second, after a seller sets his price, jet.com will aggregate that info along with info from other suppliers of the same product. It then sets its own price, assumingly adding its own margin. When a shopper places an order, jet.com decides which supplier's product to ship and it is the seller of record. It may simplify shopper's choices, but creates poor visibility for sellers. As a seller, I wouldn't know who competes with me on what terms, and why my product is not chosen.
  • Lastly, when customers have complaints or want exchange or return, Jet.com got the first call, and unfortunately for the seller, jet.com holds the upper hand on whether to issue a refund or exchange. As a seller, this term forces us to take on more risk of merchandise returns, and in practice, a seller has to decide whether to eat that cost or compensate that risk with a higher price.

 All in all, Jet.com seems to be a good deal for shoppers. For sellers, Jet.com is a less friendly marketplace than Amazon's, at least for now.

 If you'd like more info about how we can help you launch your e-commerce store, please contact us at via our Twitter @Commerceprohelp

Comments

Post a Comment

Popular posts from this blog

eBay is beta testing its shopbot, so how is it?

Image
eBay unveiled its shopbot technology almost two months ago (Oct 18 to be exact). Of course, it is a beta version and naturally embedded in Facebook's Messenger app. As eBay admitted , it has plenty of features and functions still in development. The Beta version also serves the purpose of collecting user feedback, and "train" the shopbot to better interpret human intention thus offer better shopping experience. When at launch, the "bot" can only accept dialogues about six product categories: electronics, fashion, health & beauty, home & garden, toys & hobbies, and sporting goods. Though eBay claims that the shopbot is backed by artificial intelligence, it is clear the machine-learning algorithms are built on a decision-tree type of structure through which the bot guides a shopper to narrow down his choices until confirming what he wants. This linear conversational pattern doesn't sound fun or engaging and it may even kill the fun when peopl
Read more

Fake Reviews...Now a Headache for Amazon

Image
A recent Forbes' article highlights the latest headache that Amazon sellers have encountered: fake reviews that game Amazon's system by providing favorable visibility to those improperly-promoted products. The article is based on ReviewMeta 's findings, which show that the average review weight--a measure developed by the firm to calculate how trustworthy reviews are overall--has nearly halved during June, July and August of 2017, compared with those in October 2016. That month is particularly important because it was when Amazon banned the practice of incentivized reviews--people receive free products in exchange for writing reviews. Most such reviewers disclosed such "free for review" relationships in their reviews, but plenty didn't, which prompted Amazon to ultimately ban this practice. It is easy to reason that shrewd marketers now find another way to game Amazon's review system. How do they recruit reviewers? Simple, through Facebook groups.
Read more

Will Amazon's Exclusives Store Help Alleviate the "Commerce Pirates" Problem?

Image
In its most recent earnings report, Amazon.com for the first time shared the performance of its Exclusives store, a site where brands can test new products and buyers hoping for exclusive deals can find their likes. Amazon said that since launch early last year, the site has generated $50 million sales from about 120 brands that offer about 10,000 products in total. Amazon is apparently encouraged by this experiment, and plans to expand this store format. "We do expect the broadening of the product categories and geographical expansion," according to Peter Sauerborn, director of business development at Amazon who is in charge of this effort. It would be good news for retailers and small merchants that have truly unique merchandizes to sell. As the e-commerce market stands right now, the marketplace model opens up a great revenue opportunity for small and medium-sized retailers, but because a web store is so easy to set up, the marketplace model also invites what I c
Read more