Is Walmart Making a Play for Jet.com?

Jet.comWalmart is in talks to buy ecommerce marketplace startup Jet.com, according to an article published today by The Wall Street Journal.

And the price tag is not a Rollback deal: According to the article, sourced say Walmart is willing to pay $3 billion to acquire Jet.com, which went live as a competitor to Amazon just over a year ago.

Walmart already has a marketplace built seamlessly into its ecommerce site. On its Marketplace page, Walmart says its sellers are selected based on reputation, sales projections and alignment with Walmart’s values. Marketplace sellers’ products are sold alongside the Walmart products and are exposed to over 80 million unique visitors shop on Walmart.com every month.

Walmart’s marketplace sellers ship directly to the customer and handle inquiries and returns of their own goods.

In theory, owning Jet.com will expand Walmart’s already massive reach, and help attract more marketplace sellers. By September 2015, just two months after its public launch, Jet.com was ChannelAdvisor’s number-4 marketplace by GMV.

“That means that just a month after its public debut, it’s already bigger for ChannelAdvisor than incumbents like Sears, Best Buy, Newegg, Tesco and Rakuten — marketplaces that have been operating for years,” wrote ChannelAdvisor CEO David Spitz in a blog post. “It’s not out of the realm of possibility that in 2016 it will be our number 3 marketplace, after Amazon and eBay.”

ChannelAdvisor reported that just a few weeks after officially launching, the average Jet.com seller GMV was twice that of seller GMV on Sears or Newegg.

Jet.com was founded by Marc Lore, who started Quidsi – the parent of Diapers.com and Soap.com – and sold it to Amazon in 2010 for $550 million.

Jet.com was originally built on a built on a subscription model like Costco or Sam’s Club, charging consumers $49 a year to belong after a 90-day trial. However, Jet.com abandoned the subscription model because of its early sales success, and never collected any of the fees.

Jet.com’s hook is allowing its members to save through actions like sourcing items from nearby merchants, enabling bigger baskets from the same merchant, tweaking return policies and opting for different payment methods or longer shipping times. Jet.com’s model allows sellers to offer prices that are 10% to 15% lower than anywhere else online.

In addition, Jet.com offers free shipping on orders of $35 or more, and 2-day delivery on orders that are placed before 2 p.m.

Tim Parry is Multichannel Merchant’s Managing Editor, and the lead programmer for Growing Global.

Partner Content

3 Critical Components to Achieving the Perfect Order - NetSuite
Explore the 3 critical components to delivering the perfect order.
Streamlining Unified Commerce Complexity - NetSuite
Explore how consolidating multiple systems through a cloud-based commerce platform provides a seamless experience for both you, and your customer.
Build the Foundation for Great Customer Experiences - NetSuite
Understand how consistent, timely, relevant and personalized experiences are enabled by having the right technology foundation in place.
Strategies for Maximizing Mobile Point-of-Sale Technology - NetSuite
Learn the top five innovative ways to utilize your mobile POS technology to drive customer engagement, increase sales and elevate your brand.