There’s a new game in town when it comes to selling online – Jet.com. Started by Diapers.com founder and former Amazonian Marc Lore, the eCommerce site aims to take on Amazon by offering “Smart Carts” with lower prices available to those who are willing to wait. Jet, which until just today charged buyers for an annual “membership,” has been likened to a virtual Costco.
Rumor has it that Jet is going after Amazon Prime and the big warehouse stores, and competing on price. So what does this mean for online sellers?
Jet and Online Sellers
Online sellers who want to try this new marketplace can sign up to sell on Jet. For now, all sales you make on Jet are merchant fulfilled. There’s no “FBJ” (Fulfilled-by-Jet) just yet (though you can find out more about drop shipping to Jet customers here.)
We’ve talked to a handful of sellers who’ve started selling on the platform on our Facebook group and elsewhere, and so far sentiment has been fairly neutral. (Which isn’t uncommon for a new marketplace.) Except about one thing…
Jet Sales Tax
…Sales tax! Unlike Amazon (either merchant fulfilled or fulfilled by Amazon) Jet has declared that it’s the “seller of record” for buyers.
What does that mean for sellers? No collecting sales tax from Jet customers! Here’s what Jet has to say about it’s sales tax policy:
Jet will purchase product from you and resell product to Jet Members. Jet will provide to you a resale exemption certificate, and in return you agree not to charge Jet any taxes on the sale of product to Jet. Jet will be responsible for collection of tax on sales of product to Jet Members. All fees payable by you to Jet under this Agreement are exclusive of any applicable taxes.
For purposes of this Agreement, the term “taxes” means all sales taxes, taxes on goods and services, value added and consumption taxes, use taxes, excise taxes, import and export fees, regulatory fees, levies or similar charges and duties assessed or required to be collected or paid for any reason in connection with the promotion, offer, sale or fulfillment of any products by you in connection with the Jet Marketplace.
According to Bloomberg BNA, Jet may end up with a sales tax struggle of it’s own. But for sellers, avoiding one more sales tax headache might look very tempting.
The Difference Between Jet and Amazon FBA
Jet may end up looking especially tempting to current FBA sellers. While Jet won’t require sellers to collect sales tax from buyers, Amazon FBA creates sales tax nexus for sellers in multiple states, and requires them to collect, report and remit sales tax. At this early date, though, we don’t foresee any successful FBA sellers leaving Amazon for Jet just because the sales tax burden is much lighter. But if Jet has it’s way and becomes the next eCommerce powerhouse, who knows?
How about you? Are you going to sell on Jet? We’d love to hear about your experiences so far in the comments!