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Man Sells Business to Amazon. Then takes the Biggest Gamble within the History of Commerce

Marc Lore is somewhat of a notable figure within the world of commerce. Not only has he sold his previous business to the corporate giant that is Amazon, but moreover he’s now taking a sizeable step that may be thought of as the biggest gamble within the history of business.

Marc Lore: A previously fallen man

It’s fair to say that Marc Lore fell from a rather a great height due to Amazon. For Amazon was the company who categorically targeted his super

successful online parenting website (which was, at the time, turning over $300 million annually) through selling loss leading diapers. So loss leading where these sales that it was calculated that Amazon lost $100 million over just 3 months; however, the end goal of forcing Lore’s hand in selling his business to Amazon was achieved and in 2010 the deal was done.

Jet.com: The biggest gamble in commercial history?

Marc Lore has been busy. In the past five years he’s focussed his efforts on Jet.com: a super-sized start up with a seriously novel way of doing business. Based in Montclair, New Jersey, this company is offering up a shopping site that will be a Costco/mall hybrid. This entire website additionally features a distinct air of being anti-Amazon… and Marc Lore thinks that this is the future of online retail.

Jet.com will position itself as a price leader, which is far from a small feat given that Amazon is a world leader in what is still an innovative model for business pricing. However Lore is very much focussed in on redefining the entire wholesale shopping club model and with stock including clothes, books, and electronics to baby goods and athletic gear he will indeed be going head to head with Amazon.

“If someone is unhappy here and doesn’t see an opportunity for growth, OK, good luck, go to Wal-Mart”.

Jet.com will primarily work upon a membership basis and following an initial free period of 90 days each member will then be asked to pay the $49.99 charge for a year’s worth of access. And the incentive for paying this subscription? Well Lore proclaims that this will be access to online prices that are between 10% and 15% lower than anywhere else found online… tall claims indeed, but are they achievable?

“We’re basically not making a dime on any of the transactions. We’re passing it all back to the consumer”.

Key to Lore’s business model, and the pricing that it will offer, is the membership fee feature and the fact that this will serve as essential to providing industry beating prices. As well as this the merchant type basis that is seen on Amazon, eBay and Alibaba, will encourage further competitiveness. This is then all finished off with a unique approach to delivery and if customers can cope with awaiting their items then they’ll benefit further from cheaper charges as Jet.com package deliveries together in shipments.

What might Jet.com mean for the competitive landscape?

It’s difficult to judge what the future may hold for Jet.com, let alone the online retail environment that surrounds it. One thing is for certain however, even if half of Lore’s predicted achievements are realised it may well be time for Amazon to take a fresh look at what had served as a world conquering business pricing model.