Lore: Unlimited online shelf space makes subsidizing loss-leaders viable
Marc Lore · Diapers.com & Jet.com: Marc Lore · May 17, 2021 · at 28:05
Marc Lore, co-founder of Diapers.com and Jet.com, details the core economic thesis behind launching an online diaper delivery company.
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“Online, the difference between a brick and mortar and online is online, you can sell so many more things because the unlimited shelf space. So we thought, okay, great. So let's drive people, you know, we're going to lose more money than a brick and mortar does in diapers because we have to pay for shipping, but that's okay. We can sell even more products and more high margin products than stores can.”
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Lore: Quidsi rejected a competing buyout offer $100M higher after Amazon threats
“Yeah, it's even, even worse that we got a higher offer that we didn't take.”
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“They said, well, yeah, we're gonna take the price of diapers to zero, and we're gonna, you know, and they made some analogies to some other, used explicit language, and it was pretty scary stuff.”
Quidsi rejected a $100M higher buyout offer due to Amazon retaliation threats
“Because Amazon very clearly stated that if we took that offer, they would do even more to harm the business.”
Amazon explicitly threatened to price diapers at zero to force Quidsi sale
“They said, well, yeah, we're gonna take the price of diapers to zero, and we're gonna, you know, and they made some analogies to some other, used explicit language, and it was pretty scary stuff. I'll just leave it at that.”
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“I told the investors we needed, we were gonna lose three billion dollars.”
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“But the real key was raising, we did a six hundred and eighteen million dollar Series A. So we'd raised some money before that, and then we had the six hundred million Series A. That was a really tough round to get done. That was, at that time, we had negative…”