How Does Jet.com Work? A Seller’s Guide
Updated on April 18, 2020
If you have been selling products online for any amount of time, you’ve probably heard of multichannel selling as a means to diversify. Not having all your eggs in one basket can be a good business strategy.
With the increased competition in the Fulfillment By Amazon (FBA) marketplace, sellers are looking for a way to eliminate their dependence on a single channel. However, multichannel selling comes with its own set of challenges, like more complicated logistics and inventory management, as well as a more complex customer query and return system.
Every seller has to decide for themselves if the additional overhead and complication is worth it, but if you’re looking for another ecommerce channel in which to build your business, you need one with the power to make a dent in the competitive, constantly evolving marketplace.
Enter Jet.
Jet went online in July 2015 and managed to raise over $820 million in investment capital before being bought out by Walmart for $3.3 billion. It has the financial backing to make it a viable competitor to Amazon.
If you’ve laid awake at night wondering if you are going to lose your business due to competition because most of your sales come from a single channel such as Amazon, diversifying by selling on Jet could be a viable alternative for you.
So what is Jet? Who are they, and why should we sell on their platform?
What Is Jet?
Jet is an online marketplace that caters to a variety of shoppers in the 48 contiguous U.S. states. Jet continues to grow at over 400,000 users a month, with it’s largest growing demographic the savvy urban millennial. It has more than 2,400 retailers and third-party sellers (referred to as partners) selling on its platform.
When Jet first launched in July 2015, it was a members-only shopping club. Instead of charging sellers a commission on every item sold like its competitors, it would charge an annual membership fee to customers. The idea behind this pricing model was that by removing the commission charge, Jet was able to pass on this saving to its customers, keeping prices on average 15 percent lower than other marketplaces.
However, the success of any online marketplace is largely dependent on getting as many buyers using it as possible. So in October 2015, Jet dropped the membership fee and opted to charge a variable commission rate on products. This change was to encourage more customers to adopt the platform and better retain existing users.
Jet was acquired by Walmart in August 2016, becoming a wholly owned subsidiary.
So how does Jet work, exactly, and what is different for sellers on this platform compared to Amazon’s FBA business model?
How Does Jet Work?
Jet’s key selling point is that it operates a fair marketplace by providing better prices for shoppers and higher profitability for sellers. Even though Jet doesn’t mention Amazon specifically, it’s clear they are having a dig at the online retail giant’s reputation for competing with its own sellers. Jet achieves this fair marketplace through their proprietary system, matching sellers and buyers based on a number of factors in order to keep costs as low as possible.
Jet operates using a product-oriented-catalog, which means there is only ever one listing for a product and it can be fulfilled by any number of retailers.
When you submit data on a product, it is compared against Jet’s database to see if it exactly matches an already listed product. If so, you can start selling that product immediately as long as you are an authorized seller.
However, if your product does not match an existing listing, then it is put in a queue for a member of the Jet team to manually review and approve or reject the product. If it’s approved, a new product listing will be created for you and added to the product catalog.
When you shop on Jet, you don’t select the seller you buy from. You choose the product you want, and Jet will select the seller they believe is the best fit on a number of factors, such as:
- The size of your customer basket (how many items you are ordering)
- Your location as a customer
- The location of the goods
- Whether the ordered products are all in the same warehouse or spread out across different locations
- Your choice of paying full price for a product with less service options or paying full price to get full returns service.
Having Jet select the seller means shoppers always get the best possible price based on their circumstances and needs.
For sellers, Jet offers what they call Order Profitability Control which allows sellers to offer customers different pricing using the Jet Rules Engine, such as:
- Customer order size (offer discount for bulk purchases)
- Distance from a fulfillment center (pass on shipping savings and “win” the sale over competitors that are further away)
- Item returnability (customers can choose to give up their ability to return an item for a lower price)
- The ability to give a discount if a customer opts-in to receive email marketing.
This flexibility is great for sellers as it allows them to incentivize customers to buy more product by offering bulk discounts, which can increase profits for a seller through volume. The optimized shipping is also great as it rewards sellers who have stock available in the closest distribution centers, keeping overall shipping costs down.
Sellers can give customers the option to waive free returns in exchange for a discount, though the small size of the discount (16 to 20 cents) may not inspire a great deal of use by customers.
Getting your customers emails’ is a big win for sellers on Jet. Unlike Amazon, where you never get your customers’ email information and are restricted to communicating via Amazon’s internal system, Jet allows you to build your email list. This feature gives you opportunities to remarket to your customers directly, potentially increasing your sales.
How to Manage Multichannel Selling
Selling your products across multiple channels reduces your dependence on a single marketplace, brick and mortar chain, online platform, or site. Plus it increases your customer reach through more exposure.
However, setting up a multichannel retailing system takes more planning and work than running your sales through a single channel. You have to consider how you will manage your inventory and the best way to fulfill your orders.
If you are already an Amazon FBA seller, you can use Amazon’s Multi-Channel Fulfillment Service to also sell on Jet. Your inventory is served from the same distribution houses, and you can track your inventory in one place, while still getting the benefit of selling on two platforms. However, be aware that costs can be potentially higher using Amazon’s fulfillment centers when shipping to other centers, which could make it harder to be competitive with sellers who use an alternative fulfillment service for their products on Jet. This means you could buy amazon fba business and then expand your sales channels through Jet with minimal time investment.
Sellers must have their inventory system integrated with Jet’s system through their Application Programming Interface (API). If you decide to use Amazon’s Multi-Channel Fulfillment, you can use a service like Zentail to integrate your Amazon inventory with Jet.
Ultimately you will need to decide if it is more beneficial for you to run a separate inventory management system and distribute through an alternative fulfillment service to Jet, or pay the higher shipping costs from Amazon for a simpler all in one solution.
Another thing to bear in mind is that just because you sell certain products on Amazon (or another channel) doesn’t mean you’ll be able to sell them on Jet — some products are prohibited, so it is important to check Jet’s product guidelines to ensure it’s a viable channel for your business.
Now that you know what Jet is and you’ve decided how to fulfill your orders, it’s time to start the application process for your Jet account.
How to Apply for Your Jet Account
So now that you’ve weighed your options and decided you want to give selling on Jet a try, you’re probably asking, “How do I get started?” First, there are a few things you need to know before you begin your application.
Getting Approved on Jet
Getting approved as a partner (seller) on Jet requires the following:
- Agree to and abide by the Jet Partner terms and conditions.
- Must be an authorized reseller of approved Jet products (no used or refurbished items or certain prohibited products).
- Able to fulfill orders from fulfillment locations within the contiguous 48 United States. (no Alaska or Hawaii and no international sales at this stage).
- Have a valid, 9-digit United States Business Tax Identification Number. (Sole proprietors can provide their social security number in place of a tax ID.)
- Must be capable of fulfilling orders to Jet Members within five business days of purchase.
- Required to connect with Jet via an API integration. You cannot integrate manually via spreadsheet upload at this time.
A couple of other things to note. The email you supply in your application will become the account email and cannot be changed later, so make sure you create a business-appropriate email (if you don’t already have one) or use the correct business email when submitting your application.
Let’s get started with the application.
Step 1- Go to the Partner Page
First, navigate to the Jet Partner Page. Here you will find the details about what the Jet partner program offers and the guidelines you have to meet to be eligible. If you need more information on requirements or what the partner program offers, check out their help page.
Step 2 – Fill Out Your Personal Information
Once you’ve read through the supplied information, scroll to the bottom of the page and click the applications link, or go directly to the Application page.
Here you will need to fill out your personal information and contact details, your legal business name (the name that appears on your tax return), and your Tax ID number.
Step 3 – Fill Out Your Business Information
Once you’ve submitted the form, the next step is to fill out the details of your business.
Here, Jet will ask you about what type of seller you are, how many products (commonly referred to as SKUs) are in your catalog, your primary merchandise category, whether you adhere to Minimum Advertised Pricing (MAP), and how you fulfill your products.
Step 4 – Wait for Approval
Once you’ve submitted your application information, you’re done! Now you just sit back and wait for approval from the Jet team.
The review process is supposed to take from 4-6 weeks, but some people have reported waiting as long as three months. If you are approved to sell on Jet, you will receive an email from their team with the next steps to finalizing and setting up your Jet Partner account.
Is Jet Right for You?
Selling your products on Jet could benefit your ecommerce business by giving you an alternative market to the major players like Amazon and eBay. Giving sellers the ability to customize their product offerings based on quantity and service levels is a nice touch. And the ability to capture emails from your customers is another boon.
However, Jet is not for everyone. It’s limited to selling only in the 48 contiguous U.S. states. There are limitations on the types of products they will approve, so it may not be suitable for your business. To top it off, you need to have your own inventory management in place which ties into their system via an API. Plus, the length of the review process is also another aspect that could turn people away from the platform.
If you are accustomed to Amazon’s platform as a, FBA seller, this process will come across as unnecessarily complicated and an additional expense for your business.
While Jet is just one option among many alternatives for multichannel selling, their focus on benefiting both their customers and sellers for a mutually beneficial shopping experience makes it stand apart from Amazon (whose primary focus has always been its customers above all else, sometimes to the detriment of sellers).
If you want to try your hand at multichannel selling, are interested in building your own inventory management back end, and are interested in a platform that allows you to easily build an email list you can market to, then Jet may be for you.
Photo credit: Marc van der Chijs