Amazon competitor Jet.com drops $50 membership fee

SEATTLE - Jet. com - which took aim at e-commerce giant Amazon.com by offering a $50 membership fee that is half the cost of an Amazon Prime subscription - is eliminating the fee to attract shoppers just three months after its official opening.

The startup based in Hoboken, New Jersey, announced the change Wednesday in an email to customers. The company had been promoting its service with free trial memberships that were due to expire soon. Now shoppers can use Jet.com without a membership and the company is offering free shipping in two to five business days on orders of at least $35.

Amazon Prime, with an annual cost of $99, offers free two- day shipping with no minimum order, plus free same-day shipping on popular items in some big cities. The membership also includes video and music streaming.

Jet.com had planned to operate at a break-even on all sales, with membership fees providing its profit. Now it will have to make money on the goods it sells in the low-margin e- commerce business. Representatives from Jet.com couldn't immediately be reached for comment.

The company can introduce a fee in the future and wasn't charging anyone for a membership yet anyway, so its elimination isn't a huge change, said Sucharita Mulpuru, analyst at Forrester Research Inc.

"They're not in trouble yet," she said. "They can always introduce a fee later on and promise faster shipping."

Jet.com started in July following a trial period. The company drew $220 million in venture capital, promising a less- expensive alternative to Amazon Prime. Amazon dominates the U.S. Web-retail market, which will grow 14 percent to $349 billion this year, according to research firm eMarketer.

"Eliminating the entry barrier to the marketplace will only encourage consumers to explore the site," said David Spitz, chief executive officer of ChannelAdvisor Corp., which helps merchants sell goods online.