Jet.com takes on Amazon, warehouse clubs

Jet.com CEO Marc Lore on the new online retailer's business model and the state of the U.S. consumer.

Jet.com CEO: We Are the Costco of Internet Retail

By Ecommerce FOXBusiness

Is Jet.com the next $3 billion dollar company? In an interview on FOX Business Network’s Mornings with Maria, CEO Marc Lore said his plan for the e-commerce startup is to “focus on innovating around price.”

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“It’s very simple you pay $50 a year for annual membership and you save hundreds of dollars,” Lore said.

Lore compares the e-commerce site to Costco and Sam’s Club with one main difference.

“The very big difference from Costco is… We will have millions of products for sale at Costco-type prices and you don’t have to buy the big bulk stuff, you can buy the small sizes too,” he said.

He argues his company’s non-traditional business model, which focuses on buying goods from other retailers, will be worthwhile.

“It doesn’t make sense in the short term, but we are basically working backwards from a value proposition and a business model that we know is viable in the future... We have to raise more money, no doubt -- but if you look at the money we need to raise and the value of the asset we can create with that money -- it’s [an] order of magnitude… a big return for investors,” he said.

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Lore believes once it becomes cheaper to purchase everyday goods online the industry will take off.

“The overall retail market is not growing anywhere near the rate of commerce it’s just shifting from offline to online… It’s still cheaper to buy your everyday essentials offline, going into brick and mortar stores, but over the next 5 to 10 years it’s going to be cheaper to get your everyday essentials delivered to your door. Once that happens I think you’re going to see an explosion,” he said.

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