Amazon practically ran diapers.com out of business and bought them on the cheap. Those coupons were amazing for consumers, I got dozens of free cases of diapers.
That experience means that Jet is going to be a $20B company?
As the WSJ points out, they're going to need a crazy amount of people to buy paid memberships for their model to work. Sure seems like a long-shot to be around in 5 years to me.
I will argue that $550mm isn't cheap, and if he wasn't a real threat Amazon would've waited til he bled out. He learned from his previous business model, and went for one place where Amazon has never competed, and still won't compete. Cheap everyday items.
Jet offers no frills besides shopping for cheap (which is flawed until Conceirge is phased out) and can eventually make money off the membership (especially if they raise the cost). Amazon offers video streaming and expedited shipping on all orders, and doesn't make any money on membership. They will have to heavily subsidize Prime Pantry and sacrifice another few years of profitability if they decide to go head to head with Jet.
I am happy the consumer will win in the next few years no matter how this plays out.
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