Marc Lore, the Bucknell grad who cofounded Diapers.com/Qdisi and sold it to Amazon.com for $500 million in 2010, has another fat payday: He and partners Matt Hanrahan and Jake Faust have sold their Hoboken company, Jet.com, its high-tech warehouse in Swedesboro (in South Jersey near the Barry Bridge) and other sites in Ireland, Kansas, Nevada and Utah, to Walmart for $3 billion in cash plus $300 million in stock, payable in installments.

With client sales of $1 billion a year from clients including Barnes & Noble (books), GNC (non-FDA-approved pills), Toys R Us, Sports Authority (now in 
bankruptcy), and hundreds more, Jet grew fast, but remains far short of displacing Amazon as the dominant online retailer.

It will now help Walmart, the largest retail store chain, try and catch up to Amazon's long lead in warehouse direct sales.

Walmart wants Jet for the company's "dynamic pricing and sourcing," said Stefan Weitz, chief product and strategy officer at Radial (formerly eBay Enterprise), a retail-sales service  in King of Prussia.

"One of Jet.com’s value propositions is that they are able to reprice items in your basket, based on the other items you buy," Weitz told me. "Jet is able to do this because they are constantly repricing their goods based on the (profit) margins they’ve decided they need to hit.  When you order two things that happen to ship from the same warehouse, they can combine shipping of the items, reducing their (costs) and therefore enabling them to reduce the price they charge to the consumer," without cutting profitability.

The software needed to match profit targets to inventory and location and quickly adjust prices -- and still deliver on time -- "
is a phenomenally complex computer science task" -- with special resonance for Walmart, Weitz added: Jet's approach neatly recalls Walmart's former Rollback in-store price-cut strategy, which relied on old-fashioned inventory and sales tracking.

By bringing back similar price cuts, based on instant digital calculations, Jet.com makes Walmart more appealing to longtime customers as they move online, to get them to buy more and keep coming back, Weitz concluded. 

Jet founders and investors will be richly paid: The firm raised at least $470 million from investors including Boston's Fidelity and Bain investment firms, Philadelphia-based MentorTech, Silicon Valley-based Accel Partners and Google Ventures, Washington-based New Enterprise Associates, New York-based Goldman Sachs, and others, mostly in 2014.

"The transaction is well within Walmart's financial resources," wrote Diya G. Iyer, analyst at Standard & Poor's credit rating agency in a report to clients this morning. Jet "has the potential to accelerate Wal-Mart's e-commerce growth
and enhance capabilities to compete more effectively against Amazon.com
through Jet.com's pricing algorithms and unique fulfillment approach."

But that doesn't guarantee Walmart will be able to rapidly boost online sales, which accounted for only about 3% of Wal-Mart purchases last year, a fraction of online sales at more tech-friendly companies like Philadelphia-based Urban Outfitters. total company sales last year.  

"Walmart has already invested billions of dollars in its Wal-Mart Pay mobile
app, Amazon Prime rival Shipping Pass and various other digital efforts in
recent years," but "it continues to face challenges in competing with
Amazon, which has more than seven times the sales including its Web-service
business," Iyer concluded.