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Jet.com CEO: We May Have the Lowest Prices, but Many Shoppers Can't Figure That Out

Some brands have asked Jet not to show fully discounted prices. That has led to shopper confusion.

Jet.com

Jet.com may have the lowest prices on the Web, but a lot of people who visit the site still don’t realize it.

That is something CEO Marc Lore acknowledged when asked about confusion among people who hear about Jet.com’s low prices but don’t see them displayed clearly when they visit a Jet.com product page.

“Believe me, we have this discussion every single day,” Lore said in an interview Thursday evening. “We keep tweaking the [user experience] to make it more clear and are bringing in research groups. But you’re right, it’s still frustrating to [some].”

Before we get to the confusion, a reminder about how Jet works: Jet marks down most of the products it sells below the lowest price elsewhere on the Web. How? The retailers that sell goods through Jet give Jet a fee for each sale, but Jet doesn’t pocket that fee, as competing online marketplaces do. Instead, it gives a large portion of it back to shoppers in the form of discounts on each item they buy.

Lore has said the company will simply break even on the actual sale of goods, and then generate a profit through the $50 membership fee Jet shoppers have to pay each year. (Many smart people in the industry are skeptical that Jet can become big enough to make this model work.)

The confusion among potential shoppers stems from how Jet displays these discounted prices. Here’s what a Jet product page looks like.

Jet displays the TV’s price as $1,597.99. If you were to click on the “check” link below it to check Amazon’s price*, you would see that Amazon’s price is the same. But Jet is offering the shopper an additional “extra savings” of “34.12 off,” meaning the actual price a Jet shopper will pay for the TV is $1,563.87. But Jet doesn’t display that $1,563.87 price. Hence the confusion.

Lore said the reason it doesn’t show the fully discounted price is straightforward: Some of the product brands that sell on Jet have asked Jet not to display the discounted price because it is angering other retailers they sell their products to. Lore didn’t name these brands, but said the company wanted to do good by them even if it led to some short-term confusion among shoppers. For now, Jet has opted for a uniform design strategy even though it has only heard complaints from some of the brands they sell. That said, Jet is considering making a change so that the fully discounted price will be shown for brands that don’t object and leave the pricing display as is for the brands that do, Lore said. Lore is waiting for a recommendation from his team on what to do.

Other people are confused by the + sign that Jet shows between the product price and the discount it is offering. Lore said Jet execs have gone back and forth internally about whether to use a + sign or a – sign, but that more people in focus groups have said the + sign is less confusing. For the record, the + means that Jet is providing shoppers with an additional discount on top of the displayed price.

“In either case, people are confused,” he said. “I think we’ll figure it out.”

Jet has raised more than $200 million in equity and debt financing, largely on the back of Lore’s vision and background. He’s the co-founder and former CEO of Diapers.com parent company Quidsi. Amazon acquired Quidsi for $550 million in 2011 after waging a diaper pricing war. Lore then spent a couple of years at Amazon before leaving to create Jet.

* When Jet launched last month, it was showing Amazon’s competing price front and center, but Lore said on Thursday that that confused shoppers, too. One could be skeptical of that explanation, except Jet’s prices do indeed often beat Amazon’s so it doesn’t necessarily help Jet to make Amazon’s price harder to discover.

This article originally appeared on Recode.net.