Business sold just a couple years after it acquired Jet.com domain name.
A little over two years after Igloo brokered the sale of the Jet.com domain name, the company using the domain is going to be acquired by WalMart for $3 billion according to Re/Code.
As a domain guy, I could easily say that the Jet.com domain name should be credited for whatever Jet.com’s success has been so far. But that would be silly; it’s spending something like $25 million a month on advertising.
Instead, I want to point out how trivial a six- or seven- figure domain name purchase is to a company that planned to raise hundreds of millions to take on Amazon. It’s small potatoes.
Jet.com started with a membership model similar to Costco or Sam’s Club. You paid an annual fee and it sold products to you at what appeared to be below Jet.com’s cost.
It quickly scratched the membership model and then raised its prices.
I purchased from Jet.com a few times to try it out. Honestly, I can’t figure out why anyone would buy something from Jet.com rather than Amazon.com. After the memberships were scratched, its prices were no better than Amazon and its selection was lacking. And, according to Re/Code, it was spending something like $20-$25 million a month in advertising. It wasn’t profitable, and I don’t think there was a path to profitability.
I don’t see what way out Jet.com had other than being acquired.
Domain investor Garry Chernoff sold the domain name to Jet.com.
John says
I’ll bet this guy is happy: http://www.businessinsider.com/jet-insiders-referral-program-winner-2015-2.
Yeah, I felt bad for it. Not long ago I was checking it out, but it just didn’t grab me enough to make an order.
Any info on what the domain sold for? Anything like what is reported for “PrivateJet.com”?
Nick says
overpaid
Ivan Rasskazov says
There was much debate on this among finance folks. $3b for Walmart is not a big risk and their technology side needs a significant boost. We live in an era of low interest rates where capital is cheap to raise. This is similar to the new NBA contracts, while expensive historically, they must be evaluated within the current environment.
Walmart will get out of this purchase what they put into it in terms of development and branding.
Andrew Allemann says
WalMart certainly needs to do something for its eCommerce efforts. Its website sucks compared to Amazon.
Ivan Rasskazov says
Amazon is already thinking ahead of the present model with nTLDs.
Personal shopping – have your own brand TLD website that knows your favorites, habits and can customize advertising to each specific user on that personal website, and perhaps even re-order automatically based on what the IoT appliances show?
The mind wanders…
Mike S. says
As a direct marketing guy- totally agree with Andrew that the name for 7 figures is nothing compared to $20+ Million in marketing monthly- wow.
I, too, got their mailed piece to my house- just was not compelled enough to make a purchase given I have Prime and the pricing/selection was nothing special.
Awesome name aside- it was always tough to see them winning against amazon with no real strategic advantage. I guess Walmart needs help with e-commerce and maybe having a secondary brand helps- don’t really see it making too much of a dent into Amazon.
Nick says
He never said it sold for 7 figures, he said it sold for 10 figures. Billion, not Million
Andrew Allemann says
Nick, he’s talking about when the company bought the Jet.com domain name. I don’t know the exact price. Might have been six or seven figures.
John says
Given that PrivateJet.com is reported to have sold for $30 milllion, why not 8 figures for Jet.com?
Ari says
I sell on a number of ecommerce channels including Amazon, and as of yesterday jet.com. Comparing the backend of Amazon to Jet is like comparing the rigidity of steel to …Laffy Taffy. I have never had a harder time connecting to a sales channel, and the partner site crashes on a mac every 30 minutes.
LEXV says
I don’t know about this deal, I think is overpriced, 3.3 bill,..they got warehouses full of detergent, and toilet paper, the executive team, an algorithm “very high tech”(their website is ok), and the name jet.com, there already several online retailers with the name jet, jet is a very common name, therefore it’s been used a lot for several things, ijet.com, ejet.com, jetblue.com, jetsshop.com, jetstar.com,and so on… and thats only in .com.. I think they will loose a lot of customers compare to AMAZON…jet.com is definitely an 8 figure domain name, BUT to take over Amazon, i don’t see that happening…