Archives for October 2015

Updated. Here are some quick deals for some free Starwood Preferred Guest (SPG) points. I’ll try to update this post instead of making new ones in the future. These are handy for extending the expiration of all your points, which otherwise may be lost after 12 months of inactivity. Also, they’ll get me a tiny bit closer to a Heavenly Bed in some foreign country. 😉

• 150 SPG Points for Security Questions. Starwood wants to improve their security with a set of questions. The questions try to be clever and I had trouble answering them, but I’ll do it for the free points (and then copy the answers in my password manager). Visit this link, answer the four questions before 10/31/15, and you’ll get 150 points. Don’t use Chrome browser for iOS.
   
  There is no indication of promo on the page. See this FT thread by an official Starwood representative for proof this is legit. Selected fine print:

  *Bonus offer: Member can earn a onetime bonus of 150 Starpoints after selecting and answering four (4) security questions on spg.com from October 8, 2015, through October 31, 2015 (the “promotion period”). This promotion is not transferable. Offer available to existing SPG members only (as of 10/8/15). Bonus Starpoints will be credited to the member’s account within 2–4 weeks of the close of the promotion on October 31, 2015.

• 200 SPG Points for E-Statements. First, make sure you are not signed up for Starwood Preferred Guest E-statements. Log into your online account and go to Manage My Account > My Profile > Communications Preferences and make sure the box is unchecked. You should get an e-mail confirmation of any saved changes.

  

  Next, either make sure you are logged out of your account or open a new Incognito window. Now visit this SPG Dashboard link and look for this offer at the bottom of the page. Click both checkboxes and Update Your Account. You should probably also register for the promo on the right as well.

  

  Don’t unsubscribe from these e-mail newsletters until your points post in 2-4 weeks. See selected fine print:

  An eligible member can earn 200 bonus Starpoints for opting in to the email subscription(s) in the form field on the SPG Dashboard and clicking “Update Your Account.” A member can only earn the bonus once during the offer earn window, which ends Nov-24-2015. A member must subscribe to all of the displayed email subscription(s) using the form field on the SPG Dashboard for the Starpoints to be earned.  Bonus Starpoints can take up to 2 to 4 weeks to post to your account after confirmation that you have successfully subscribed.

I always make sure my wife’s SPG account also does these deals, as it extends her account activity and you can transfer points over within the same household (with same physical address).

Update October 2015. CEO Marc Lore just announced that Jet is dropping its membership fee for everyone. They’ve only been live for a few months, so most customers are still on a free trial anyway.

This was surprising for many because Jet was supposed to be following the “Costco model” – sell you things at thin profit margins and make their money on the $50 annual membership fee. However, recall that Costco also makes a lot of money on Executive members who earn 2% back on all purchases. If you spend over $5,500 a year at Costco, you effectively don’t pay any membership fee. The margins are thin, but the numbers still work for Costco if you spend enough.

Jet has a “Smart Cart” feature that lowers your unit pricing based on volume and shipping efficiency, so the goal appears to be to encourage high-volume shopping. I’ve read reports that the average Amazon Prime customer spends about $1,000 a year at Amazon. Is that enough? Shrug, I’ll leave the profitability issue to their management and investors.

Jet does have good prices on some things, so depending on what you like to buy they may save you some money. Get $10 off your first order of $35+ with code TENBUCKSNOW. Even better, the competition is forcing Amazon to lower their prices, so you can benefit without ever shopping at Jet. Let some of that venture capital flow into your wallet. 🙂

Original post from July 2015:

Jet.com has officially launched its attempt to bring the Costco model to online shopping. That is, they plan on selling you things at near-zero profit margins and make their money on the annual $49.99 membership fee. The more stuff you add your cart, the lower the total cost. The more you buy from the same warehouse, the lower your total cost. Free shipping on orders of $35 or more.

This supposedly means prices that are 10% to 15% lower than Amazon on average, even listing the Amazon price right on their page for instant comparisons. How they show savings is a little confusing… things make more sense after adding it to your cart.

For example, this pack of toilet paper shows $21.05, the same price as Amazon. But I can save $9.06 by actually adding it to my cart, which brings the actual price to $11.99, much cheaper than Amazon. If I buy *two* packs, then my sub total is $42.10 which breaks the $35 barrier and gets me free shipping. But my actual total due is only $22.74, less than $35. Confusing, but hey it works out in my favor so I’m cool with it.

However, this model only works at a certain scale, and this WSJ article points out that they are often buying stuff from other competitors when they don’t have the item in their own inventory:

The Hoboken, N.J., company is absorbing steep losses on many orders filled as part of a trial run that began in March, largely because Jet hasn’t signed up enough partner merchants or opened enough warehouses to directly sell much of the merchandise shown on its website.

When a Jet customer buys items that aren’t in its inventory or available from partner merchants, a Jet employee buys the items from another website and has them shipped directly to the customer. That is expensive for Jet because the company often pays high shipping costs plus any difference between its advertised price and the amount charged by the outside website.

For example, The Wall Street Journal recently bought 22 items from Jet. Twelve were shipped to the Journal by retailers such as Wal-Mart Stores Inc., J.C. Penney Co. and Nordstrom Inc., according to sales receipts.

Jet’s prices for the same 12 items added up to $275.55, an average discount of about 11% from the prices Jet paid for those items on other retailers’ websites. Jet’s total cost, which also includes estimated shipping and taxes, was $518.46.

So in other words, the 11% pricing discount above is not due to an awesome business model yet. They are being artificially suppressed with investor money. Now, spending venture capital funds in the search for rapid growth is common for internet start-ups, but I don’t remember any of my early Amazon orders coming in a Barnes & Noble box.

As a consumer, I suppose the best thing to do is simply enjoy the loss-leader savings during your free trial and then decide if it’s worth $50 a year. Costco is highly profitable but even they offer their $4.99 rotisserie chickens as a loss-leader, missing out on $40 million a year in order to keep people coming in the door.