Amazon + Costco = Marc Lore's Jet.com

by Dan Wearsch

I worked for a big warehouse club chain for almost nine years, and I think they may be about to get schooled by a startup.

I just finished reading this article, and it seems Marc Lore has a really good shot at making a huge impact in retail. Lore ran a few startups before his Diapers.com parent company was bought by Amazon in 2010, and he stayed with the Bezos gang for a couple years after the deal. Now he’s back on his own and going after membership-based retail in the form of Jet.com. The idea behind Jet is as old as Sol Price’s original concept for the club channel.

In its purest form, the club model is:

  1. Members pay to shop and the company makes all its profit from those paid memberships.
  2. Items for sale only have to be priced high enough to cover the costs of operating the business, so prices will be lower than non-club competitors who are pricing to make a profit from each individual item sold.
  3. Low prices attract more members, GOTO Step 1.

Brick and mortar clubs like Costco, Sam’s Club, and BJ’s have strayed from the pure model, supplementing profits with add-on services and ancillary businesses, not to mention the upward pressure of ever-increasing costs inherent in maintaining a physical presence for members. While Costco is well known for holding the line on markups, Sam’s Club and BJ’s have taken some additional profit in recent years by letting prices creep up or letting quality slip in categories where members are less likely to notice.

More importantly, Lore has realized something all three traditional clubs have failed to execute well. Online sales offer an even greater opportunity to minimize the cost of goods, offer even lower prices, and drive greater membership sales as a result.

How? In addition to the classic e-commerce advantages of reduced overhead, more efficient shipment practices mean lower costs, so Jet will focus on providing a platform, connecting members to regional or even local merchants who can offer better pricing thanks to lower delivery costs, as well as discounts for add-on items or product bundles. None of the traditional warehouse clubs have truly cracked online sales, so the door for Jet is wide open. If you need to see for yourself, simply visit any of them. As a charter member of Amazon Prime, I’ve been waiting years for Amazon to flex their muscle and give the old school clubs a run for their money. I’m guessing Lore learned more than a little about selling and renewing memberships during his time in the jungle.

One final way Jet is besting traditional clubs is by offering three months of free membership for everyone who wants to give it a try, and they’re extending that to six months for “Jet Insiders” (aka anyone with an email address) who sign up by February 6th. Combine that with a clever social media referral strategy[1] they are calling ‘Shares for Shares’ that rewards the top insider with 100,000 stock options, and you have a big carrot that only a wild and crazy startup would offer. That’s a hell of a lot more incentive than either Costco or Sam’s Club have ever given me to refer others to sign up.


  1. My referral link is right here if you’re curious.  ↩

My Favorite Moments of John Siracusa's Epic Yosemite Review

by Dan Wearsch

As he has done for every major release of OS X, John Siracusa has taken the last few months to create an amazingly thorough, detailed, and useful review of Apple's latest desktop operating system.

John's own post-mortem on the review can be found here, along with links to all your reading options and the author's explanation of their differences.

In addition to the epic nature of these highly-detailed reviews, John also takes the time to inject humor, both overtly in standard joke form and often by way of cultural references, both popular (Back to the Future, The Godfather, Oprah) and niche (Kiki's Delivery Service, 20-year-old less popular U2 lyrics).

I grabbed screenshots of my favorite moments while reading the review this weekend. Please forgive the changing backgrounds, I obviously don't have the same iBooks settings on my iPad and iPhone.

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An Update on How I Use IFTTT

by Dan Wearsch

I've written a fair amount about IFTTT in the last couple years, but I've made a lot of changes lately thanks to some great improvements to the service. I just added all the Boxcar stuff today, so if all goes well, I'll probably change most of the SMS actions over soon. I really hope the team at IFTTT figures out how to make money soon, because I'd rather be paying them than have to go back to life before IFTTT.

Below is a summary of how I currently use IFTTT, grouped by destination.

App.net

(A short message service like Twitter)

  • New Posts from Nerd.is RSS feed

Bit.ly

(The triggers below create a new short URL using my own custom domain)

  • New Shared IFTTT Recipe
  • New files added to my Public Dropbox folder
  • New Pinboard bookmarks
  • New Starred items in Feedly
  • New Posts from Nerd.is RSS feed

Boxcar 2

(Boxcar is a push notification service, so these items send push alerts to my phone)

  • Withings Pulse Less than 8000 steps yesterday
  • Withings Pulse More than 10000 steps yesterday
  • Reminders near the end of my workday on the days I need to wrap up and get to the gym
  • A bunch of different reminders tied to my daughter's sleep schedule
  • Any articles about my employer in The New York Times
  • Stock market closing prices on select stocks
  • Breaking News from ESPN about the Cleveland Browns
  • Each morning, a recommended recipe from IFTTT

Dropbox

  • Select photos from my phone move to a specified subfolder

Email

  • IFTTT Updates (new channels and other info)

Flickr

  • My Instagram Posts

Gmail

  • If I Beat My Weight Loss Goal, Email my Wife

Google Drive

  • Withings Scale Weigh-in Details to Spreadsheet

LinkedIn

  • Share Feedly Articles tagged with 'linkedin'

Pinboard

(Pinboard is the greatest bookmarking service)

  • Last.fm Loved Tracks
  • Vimeo Likes
  • Soundcloud Faves
  • Soundcloud Posts
  • Flickr Faves
  • Evernote Shared Items
  • YouTube Faves
  • Pocket Faves
  • Reddit Saves

Pocket

(Pocket is a Read Later service)

  • Vimeo Watch Later
  • YouTube Watch Later

SMS

(The following items trigger text messages to my phone)

  • The President signs a new law
  • New measurement from Withings scale
  • Arkansas Razorback football news
  • Cleveland Browns kickoff reminder
  • Cleveland Indians final scores
  • Current weather at my house is rain or snow

Soundcloud

  • Call IFTTT and leave a voicemail

Tumblr

Twitter

  • Location based trigger DMs my wife to let her know I'm headed home