Reports are out that Walmart is in talks or at in their research phase of buying Jet.com. Yep! Jet.com the retailer who has only been out for slightly over 1 year, and required users to pay $50 a year to gain access to their store. (That idea only lasted till October, 4 months).
How in the world is Jet worth 3 billion?
- Users report that the wrong items ship,
- Users report that items tend to be canceled for no reason,
- Their Customer Acquisition Cost is…. easily in the $30-$90 range, they currently are offering, 15% off your first 3 orders, and have been known to offer $10-$35 off of your orders. If you max your 15% discount on each of your first three orders, Jet spent at least $90 on you.
This does NOT sound like a 3 billion dollar startup. They are all over different advertising channels (TV, Web Ads, etc..) with their commercials, look at their twitter account as an example of their repeat customer base, their follower count is only is rocking 13K users.
I don’t care what their revenue is, their advertisement expenses, CAC is thru the roof. If Walmart was looking for a way to have an edge, just offer 15% off 3 orders, you’ll easily do the business that Jet does within the hour.