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Wayfair the furniture giant - Did you know that the Wayfair sells over 14 million products on five different websites? It also has 80 “private brands”, which are not really brands but act as a way to categorize and market products in certain decor aesthetics. It does not manufacture any of the products it sells, instead using the drop shipping model. When customers place an order, Wayfair buys the item from one of its 11,000 suppliers, then ships it to the customer.
In 2018, it sold nearly $7 billion worth of products, making about $1.5 billion in gross profit. But the company is unprofitable as it has spent $2 billion in operating costs (more than a third of that in marketing) on servicing new customers and retaining existing ones. Still, her sales are growing every year and she is gaining repeat customers.
The affordable furniture and decor market is limited to a few platforms, and in the age of Instagram, decor trends change faster than you can tell. Shoppers have come to trust retailers with large selections like Amazon, Overstock, Houzz and Wayfair for home decor and, increasingly, large furniture as expectations of fast delivery become even more normal. Wayfair has become the behemoth it is now due to the dot-com boom in the early 2000s, the changing nature of internet shopping and an increasingly global supply chain, it has emerged as a leader among its competitors.