First things first. I am not a Wall Street analyst. I am neither long nor short Wayfair or hold any direct equity position in a comparable company that trades in the Wayfair competitive set. Lastly, for this post, I did my best to make some educated assumptions about the Wayfair business that have not been publically made available by the company. If there are any meaningful data inaccuracies, please know that they are not with specific intent.
- Company: Wayfair Inc.
- Founded: 2002
- Location: Boston, MA
- Employees: 2,104 FTEs w/ 125 open positions
- Leadership: Niraj Shah (CEO, co-founder), Steve Conine (CTO, co-founder). 3.1 of 5 stars and 80% approval via Glassdoor Ratings)
- Investors: Battery Ventures, Spark Capital, Great Hill Partners, HarbourVest Partners and T-Rowe Price.
- Revenue: My estimate is $1.325B for calendar 2014
- Market Cap: $2.8B (at $35/share)
- Ticket Symbol: $W (great ticker symbol!)
- Expected IPO Trading Date: Now trading.
Business and Category Overview:
Wayfair is an incredible ecommerce story. The business was founded in 2002 by Niraj Shah and Steve Conine in Boston as a website called RacksAndStands.com (yes, they started by selling speaker stands and TV stands online). Eventually, the business became known as CSN Stores which was a collection of ~240 niche commerce sites focused on furniture, home furnishings, decor and goods with web domains that included porchgrills.com, bathmats.com and bedrooms.com. Wayfair was bootstrapped until 2011, with business growing to >$500 million in sales. At that time the still founder led ecommerce pioneer took its first outside capital and made the strategic decision to rebrand and permanently redirect all of the sites into Wayfair.com. Leading to what is today Wayfair, a billion dollar plus pure-play ecommerce business with a collection of five home related sites — pretty much a one-stop shop for furniture, home furnishings, decor and goods.
Wayfair offers the world’s largest collection of online selections of furniture, home furnishings, décor and goods. I would best describe Wayfair as an ‘inventory lite’, Amazon like, online seller of home related goods connecting 7,000 third-party suppliers representing 7 million products with millions of buyers. Wayfair’s has built two clear “unfair advantages” relative to the competition that have enable them to have great success.
1) Complex and sophisticated supply chain, operations and production capability which can efficiently and effectively coordinate the listing, production, presentation, transaction, fulfillment and support for what are literally thousands upon thousands of smallish sellers who have millions of product type available for sale. As you can guess, logistics, fulfillment and customer support for home goods products are challenging given the various categories, shapes, sizes, weights and price points in the home market. Large bulky items, such as living room sofas, dining
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