Jet Would Like to Bite Off Just a Bit of Amazon's Massive Market

NEW YORK ( TheStreet) -- After raising $220 million in funding before even launching a product, the e-commerce site Jet.com is finally rolling out to a select number of consumers. Jet has been labeled as the newest company to take on Amazon (AMZN), with its promise of lowest prices and an easy-to-use Web site.

"We're trying to create the most transparent e-commerce site out there for both our merchants and consumers," Jet founder Marc Lore told TheStreet in a phone interview.

Jet is branding itself as Costco (COST)-meets-Amazon, whereby consumers pay $50 a year to have access to low-priced products ranging from food to shoes to sporting equipment. The company estimates its members will save as much as 15% on an average transaction by cutting back on logistics costs.

While the e-commerce industry remains competitive, Lore enters the field with prior experience, having founded Diapers.com, a specialty retailer for baby products, whose parent company Quidsi was acquired by Amazon for about $550 million in 2010.

"Marc Lore is a genius in terms of customer service, and that's what made Diapers work," Piper Jaffray analyst Gene Munster said in an earlier interview with TheStreet. "I'm sure that's going to be part of [Jet too]. It's going to be some wicked good customer experience. If anyone can compete with Amazon, it's Marc Lore -- because he's done it before."

Lore would like nothing better than to cut into Amazon's 2014 revenue of $89 billion. Toward that end, he's using many of Amazon's tactics.

While at Quidsi, Lore said he learned "the power of treating customers really well" and the importance of getting them attached to your brand, which is why Jet is investing a lot of money in branding and engaging consumers. Lore said the company is going to be aggressive in advertising, looking into TV commercials and the like to draw in loyal members.

For now, Jet is slowly rolling out its service to roughly 10,000 users, part of a trial period designed to generate feedback. Jet plans to go fully operational later this spring.

Despite the fact that Jet has been largely seen as a competitor to Amazon, Lore is quick to deny that he's directly taking on Amazon, explaining that there's plenty of room for both Jet and Amazon to coexist side by side.

"I see a $300 billion market in the U.S., and we've come up with really cool innovation that can bring lower prices to consumers," he said. "Our model is very different [with] a very different value prop. There's going to be a large percentage of people interested in that, but not necessarily the same people who shop on Amazon."

Jet is also taking a somewhat novel approach in the tech world by opening up a shop in Hoboken, N.J., far, far away from the West Coast. "I definitely see ourselves as a tech company, no question," Lore said. "[But] the pool of talent in the New York metro area is very strong, and we've been able to recruit amazingly talented people, so I never even considered starting Jet out west."

As of now, Jet has 250 employees, and it will be moving into the Hoboken office in two weeks. And while things are just starting to roll, Lore's confidence in Jet is already overwhelming. He has already pledged to reach $20 billion in annual gross merchandise volume by 2020.

"Many might say, 'Why would you share that with the press,' and it's really just about being open with information, we believe that's empowering," he said. "The more information you give people the better decisions they'll make."

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