Meet Amazon's newest rival, Jet.com
A new online shopping site is hoping to take on Amazon and eBay with a simple approach - the more you spend, the more you save.
Jet.com launched Tuesday with the promise of much lower prices on everything from laundry detergent to computers to kitchen supplies. It is hoping to lure shoppers away from the big online retailers and stores like Costco with an offer of a $50 annual membership in exchange for club price savings on millions of items.
The company says it starts by searching the web for the best savings on a product. As you shop, the savings increase with such things as membership discounts and so-called "smart items" designated with blue dollar sign icons. The site also throws in other ways to save, if shoppers agree to waive returns and pay with their debit card.
"It's going against the grain of the normal e-commerce sort of business model," CNET's Jeff Bakalar told CBS News.
"What jet.com wants to do is sort of get you in on the small discounts you will find on their site as opposed to an Amazon website," he said. "Their mentality is let's show the customer how much they are saving constantly throughout the shopping experience."
Bakalar said the company had teamed up with "countless retailers and shippers" to allow for the discounts. It has also tested out the concept with consumers who reported real savings and could benefit at time when some consumers have questioned whether the big e-retailers are always offering the best prices.
"They are using the idea that combining shipping will give you an overall discount on your cart," he said. "By using that, they can be transparent to the consumer. The consumer sees that as their adding things to the cart. They have the idea they are saving all this money."
But Bakalar warned that consumers might not get as much choice as they would on other sites. "You will be able to get one type of ketchup as opposed to the whole gamut of ketchups," he said.
And for investors, they may have to wait a while before the company proves profitable because of all the early discounts.
"Jet will probably take a hit in the beginning. They are probably going to eat a little bit when they provide all these discounts," Bakalar said. "But on a long enough timeline, they will turn a profit."