Jet publicly launched last month with a pretty clear goal: to take on online retail's Goliath, Amazon, by providing lower prices and multiple ways to save. But less than a month later, the membership-based e-retailer has angered hundreds of retailers, and is in danger of losing one of its biggest incentives for consumers.
Drawing Customers — And Membership Fees — With Rewards
As we mentioned in our initial review, Jet claims that it doesn't make money on its transactions, instead hoping to profit solely from its $49.99 a year membership fee. As a result, it offers its members various ways to save money, hoping to entice users to the service.
Among these incentives is a rewards-based shopping portal called Jet Anywhere. Jet Anywhere works similarly to eBates: It rewards customers for clicking through the links of the stores listed on Jet's site, and spending money on those affiliate sites (since Jet in turn earns commission for these purchases). However, rather than earn money, customers earn JetCash which they can then use as credits on their everyday Jet purchases.
Stores Claim Jet Didn't Have Permission for These Links
At launch, Jet claimed to have over 700 brands in its affiliate program. The problem, however, is that Jet didn't obtain direct permission from those retailers to use their links. Instead they used a third party service that itself had established partnerships with those stores; many retailers that have since pulled out said they weren't even aware Jet featured these links.
Now, according to the Wall Street Journal, more than 100 brands have pulled out of Jet's program. While such affiliate programs are well-established, many of these stores have lamented that Jet should have negotiated direct relationships (perhaps to establish better terms for them), or flat out felt it was inappropriate as they considered Jet a competitor.
Jet Anywhere was an easy way for customers to rack up discount points toward their Jet purchases, and without it, earning credits could become much harder.
Only time will tell if any of the merchants who have pulled out will return. In the meantime, is this something that will keep you from shopping at Jet.com? Let us know in the comments below.