Wayfair is an American e-commerce company dealing in furniture and home goods. Since its inception in 2002 by founder Neeraj Shah and Steve Conine, the company has grown its supply to almost fourteen million items and employed around seventeen thousand people. But no matter how big or popular a company is, Competition is inevitable in the market. The same is the case with Wayfair. Wayfair faces stiff competition from several companies that we are going to unveil in this article. But before that, let’s have a detailed look at Wayfair’s revenue model Then lets see about Wayfair competitors.
Wayfair’s revenue model:
Wayfair operates several e-commerce stores and sells various furniture items. But the amazing part about the company is that it does not store any stocks. The revenue model of the company is designed in such a way that independent sellers sign up on the platform and sell their products. This practice called dropshipping allows the company to avoid the problem of storage.
In this way, Wayfair acts as a middleman and sells the products directly from the manufacturer to the customer. But the focus is on furniture and home décor goods which are offered at affordable rates.
List of Wayfair competitors (Who are the major competitors of Wayfair?)
Amazon is one of the most popular and largest e-commerce websites. Owing to the popularity and rampant growth of Amazon, its CEO Jeff Bezos made it to the list of richest persons in the world. Since Wayfair is also an e-commerce site, it faces direct competition from Amazon. Amazon’s market share is so significant that Wayfair can’t pose a serious challenge to Amazon. But still, Wayfair can challenge the home goods and furniture segment of Amazon because of its focused approach.
Amazon was founded in 1994 by Jeff Bezos. The company has received the title of the most valuable retailer in the US and was listed as the fifth-largest company on the Fortune 500 list. Through its hard work and determination, it became a household name and registered almost 2.02 Billion Customer visits in a month. The company offers a variety of consumer products including electronics, food products, medicine, and much more. But still, there are some ways in which Wayfair has kept an edge over Amazon in terms of furniture and home goods products.
How Wayfair stays ahead of Amazon’s furniture and home goods segment?
- Wayfair is a comparatively more modern and sleek interface as compared to amazon’s boring interface.
- In terms of home goods, Wayfair has more popularity in North America and Europe and receives almost seventy-five million visits in a month.
- The website allows its customers to search specific products through categories.
Ways in which Amazon is ahead of Wayfair:
- Since Amazon has a good-looking organized website, it gives a tough fight concerning all the goods.
- Also, Amazon is much popular globally because of its good customer service and providing a variety of goods. Therefore it is expected to give a tough fight even in furniture and home décor goods.
- In terms of revenue and financial standing also, Amazon is far ahead of Wayfair because Amazon has total revenue of 386.06 Billion USD as compared to the 14.14 Billion USD revenue of Wayfair.
- The symbol of Wayfair in the New York Stock Exchange is W while amazon with a symbol of AMZN in NASDAQ.
The next on the list of top competitors of Wayfair is IKEA. IKEA, a foreign-based multinational group, deals in high quality, affordable, and easy to assemble home furniture, kitchen products, and home décor goods. IKEA, which is originally a Swedish company, has gained a global presence through its high-quality furniture goods that are available both online and in-stores. The foundation stone of IKEA was laid in 1943 by Ingvar Kamprad but the title of the world’s largest furniture seller was gained by it in the year 2008.
IKEA manages to stay ahead of its competitors because of its almost 400 furniture stores and a robust online presence. Owing to its revenue of almost 45.4 Billion USD, it can pose a serious and direct competition to Wayfair.
Ways in which IKEA has gained an edge over Wayfair:
- Timely delivery of easy to assemble furniture products to all its customers.
- A top position in furniture and home décor goods.
- Operates both online and offline stores that help it to gain the benefit of both traditional and modern approaches.
- Premium quality products
- Affordable prices without compromising on quality.
How Wayfair is trying to tackle the competition posed by IKEA:
- To compete with IKEA, Wayfair has also started its range of furniture.
- Besides this, it also signed several exclusive deals with the manufacturers to offer a dropshipping service. In this way, it manages to take the commission from already established manufacturers.
eBay is considered one of the first e-commerce websites in the world. But being old does not mean that it has lost its charm and popularity. eBay with its ability to give stiff competition to Wayfair manages to stay on the list. The foundation stone of eBay was laid in the year 1995 by founder Pierre Omidyar. The company is also similar to Wayfair in terms of dropshipping business. The company’s popularity can be ascertained from the fact that it has still maintained its position in the fortune 500 lists.
eBay does not pose major competition to Wayfair because other e-commerce websites like Amazon are taking the lead. Also, since it deals in a wider range of products, it does not pose a major threat in terms of furniture goods. The website has a different style of auction in which the highest bidder of the goods wins. But there is a shift now because consumers can now list the items for sale at a particular price.
Ways in which Wayfair has outpaced eBay:
- eBay enters into partnership with the sellers of various products which means that it does not have a focused approach. On the other hand, Wayfair deals in only home décor and furniture goods thereby ensuring a focused approach.
- The revenue of eBay is 10.8 billion USD while Wayfair’s revenue is slightly more i.e. 14.14 Billion USD.
- The operating costs of Wayfair are 360.35 Million USD which is less than the operating costs of eBay that stand at 2.32 Billion USD.
- Wayfair enjoys more reputation and is preferred over eBay because of its focused approach and high-quality products.
Walmart is one of the oldest competitors of Wayfair. The company was started in 1962 by Sam Walton and presently it has established almost 11484 stores globally. The company has established itself as one of the largest private employers and the world’s largest companies in terms of revenue. The company secured the first rank in the Fortune 500 list of 2019. In this way, Walmart poses a challenge to Wayfair.
The home Depot:
Another popular company that poses stiff competition to Wayfair is Home depot. The company is one of the largest US home goods retailers. The company was founded in 1978 by Bernard Marcus, Arthur Blank, Ron Brill, and Pat Farrah and presently it has several departmental stores all over the USA. The company’s dominance can be ascertained from the fact that it secured a twenty-seventh place in Fortune 500 list.
Ways in which home depot is ahead of Wayfair:
- Home Depot uses great strategies that help it achieve better growth and customer base in the furniture and home goods sector.
- The efficiency of their work has also helped them stay ahead of the competitors
- The special point about home depot is that they earn more per square foot even after having small storage spaces.
- The company has also created a monopoly by partnering with exclusive brands. These brands are not on Wayfair’s website. As a result, the site lags in some aspects.
How Wayfair still keeps its position intact:
Despite the above-mentioned points in favor of Home Depot, Wayfair has managed to achieve greater recognition because
- They have partnered with more reputed brands which help in creating reliability and trust.
- You will find more coupons, promotions, discounts, and other such marketing strategies on Wayfair which helps it in attracting customers.
- The payment options at Wayfair are of a wide range which is not the case with Home depot. You will get an option to pay with debit and prepaid cards on Wayfair but not on home depot.
- Wayfair also offers a money-back guarantee which is absent in Home depot. By giving assurance to its customer, it can hold a firm position.
Costco wholesale is an American MNC and stands as a rival to Wayfair, indirectly. The company deals in organic foods like meat, chicken, prime beef, etc, and operates various warehouses all over the world. The company is also famous for employing a large number of people. It stands in competition with Wayfair in terms of revenue and growth, although the field of the two companies is different.
Although Costco Wholesale has a lead in consumable foods and other products, Wayfair through its furniture and home décor goods has given a tough fight. Wayfair overpowers Costco wholesale products in terms of superior products, good deals, the expertise of the market, etc. Also, Wayfair has been able to achieve a growth of 34% in its sales. This figure is far more than Costco’s 18.6% sale figure.
Best buy was started as an audio specialty store. But now it has diversified into electronic and technological devices, house brand products, etc. The company was initially founded by James Wheeler and Richard M. Schulze in 1966. Later it got the name ‘Sound of Music’ in 1983. The company is proud to gain the title of one of the most sustainable US companies.
The company is also an e-commerce site and poses some form of competition to Wayfair. Best Buy created goodwill by using environment-friendly methods like using e-waste recycling to create its appliances, reducing carbon emissions by 51%, etc. It also provided bonuses to its employees. Through its e-commerce website, the company has been able to earn forty-three billion USD.
Despite all the positive points about best buy, Wayfair manages to gain an edge over it. This is because Wayfair is far more popular than best buy among customers. Due to more experience, credits, and better recognition, Wayfair does not let best buy give a tough fight to it.
Macy’s is a popular retailer store in the USA and it also poses some form of competition to Wayfair. Macy’s which is considered one of the oldest retailer stores in the US was started by Rowland Hussey Macy in the year 1858. The company made great strides by opening almost 551 stores in different parts of the USA. It gives a tough fight to its competitors in terms of staff count (18000 employees), and overall retail sales. With a revenue of 25 Billion USD, the company also made it to the fortune 500 lists. Through its innovative ideas like researching local stores, it is trying to expand itself.
Despite all these factors, Wayfair can stay ahead by providing better work culture, perks and benefits, professional development, employee diversity, and much more. In terms of the use of technology for the growth of the business, Wayfair is far more ahead of Macy’s. Thus even without comparing the business statistics of the two companies, it can be said that Wayfair has successfully maintained its dominant position in the market.
Etsy is an American e-commerce website dedicated to handmade, vintage items and craft products. The uniqueness of the business model and focus on a specific niche helps them to gain success. The e-commerce platform was started by Robert Kalin, Christ Maguire, and Haim Schoppik (former employees of Schoppik) in the year 2005.
The company becomes a competitor to Wayfair because it also operates on a similar dropshipping model where it does not sell anything. Rather it facilitates the meeting of retailers and customers. The employee count in Etsy is also kept less intentionally to cut out the costs. The success of Etsy can be calculated from the fact that it registered over 60 million products on its websites and earned almost 3.93 Billion USD.
But still, Wayfair is far more ahead of Etsy in the sale of vintage products as well. The popularity of Wayfair over Etsy can be accrued to the product quality, wider reach, better-registered products, more familiarity with customers, etc.
The next on the list of competitors is the popular retail company, Lowe’s. It was started in 1921 by Lucius Smith Lowe. From its initial offering of the grocery store, the company has now registered itself as a major hardware chain. It also specializes in home improvement products. The company with a revenue of almost 17.39 Billion USD gained 25th rank in Fortune 500 list.
If we compare Lowe’s and Wayfair we can see significant differences. Firstly, Lowe’s deals majorly in hardware while Wayfair has a monopoly in furniture and home décor goods. Also, Lowe’s tried to serve casual buyers by emphasizing more on DIY products, but Wayfair serves every type of customer. Wayfair’s more strategic approach has helped it to stay ahead of e-commerce retailers like Lowe’s.
1stdibs is also an e-commerce company that acts as an online marketplace for luxurious furniture and art pieces. It was started in the year 2001 and works in the retail distribution of fashion products, furniture, jewelry, watches, and other such luxurious items. The headquarters of the company is in New York, USA.
The company does not pose major competition to Wayfair in terms of revenue (which is 250 million USD) and employee count (309).
Overstock which was started in the year 1997 is also a popular name in the online furniture industry. It can help you find various affordable furniture pieces for your home like living room sets, bedroom furniture, kitchen, dining, set, and much more. =The company has popularity not only in the USA but in the global arena because it ships thousands of goods to various international destinations. The company is headquartered in Utah, USA.
Joss & main:
Joss & main is also an online furniture retailer. You can find various amazing deals on beds, decoration items, branded furniture, and much more on the platform. It was founded in 2006 and is headquartered in Boston. The company is no longer a competitor of Wayfair because it is now owned and operated by Wayfair.
The next on the list of the competitors of Wayfair is Hayneedle. The company is considered to be one of the fastest-growing online furniture shopping stores. It was founded in the year 2002 and is operated by Jet.com. It deals in both indoor and outdoor furniture, kitchen and dining accessories, furniture for pets, kids, etc.
How does Wayfair manage to stay ahead of stiff competition?
Although Wayfair faces stiff competition from several popular companies, it has managed to earn good revenue and make its presence felt. Now we have looked at the major competitors of Wayfair. So, let’s analyze how Wayfair has managed to keep its position intact even in such stiff competition.
- Dropshipping model: The first factor that helps Wayfair is the dropshipping operating model. Under this model, Wayfair does not produce its furniture and home décor goods. Rather it enters into partnership with existing furniture sellers to ship the goods to the client. In this way, it saves a lot of operative costs. Therefore it gains a competitive advantage.
- Extra money for spending on marketing: Since Wayfair manages to save a good deal of costs due to the dropshipping model, it can divert funds on marketing. Due to these savings, the company offers several discounts, coupons, cashback, and money-back guarantees, etc. which are missing in competitors’ strategies. In this way, through good marketing, it can enhance brand visibility, gain new customers, grow its business and increase revenue.
- Wide range of options to customers at affordable prices:
Another thing that helps Wayfair in staying competitive is the wide range of options. Since Wayfair has a partnership with various companies and allows different sellers to sell on its website, it attracts several customers due to its wide range of goods. Also, the customers can get the desired products at affordable prices. So when customers are getting quality and affordable prices together, they are likely to come to the website when they want to buy furniture for their home.
- Focused approach:
We all know that Wayfair only operates in furniture and home décor goods. This helps the company focus on one niche only. As a result, it can attract a wide range of customers. This focused approach helps the company to develop a specialized marketing model for its promotion. In this way, focus on a single niche has helped the company to stay ahead of competitors.
Competition is indeed an inevitable part of business and Wayfair does face stiff competition from various leading players. But rather than taking the competition negatively, the company acknowledged it and worked on its positive points to stay ahead. Through all its strategies, it has developed itself into a brand and is well known globally. The company inspires us to learn from the leading players and overcome all lacunas to become excellent in our field.
FAQs (Frequently Asked Questions):
Ques1: What are some of the best alternatives to Wayfair in the USA?
Ans: One of the best alternatives to Wayfair in the USA is Pier 1. It offers unique seasonal decorations. You can get various imported furniture items on this website at affordable prices. Besides this, you can consider west elm to purchase modern furniture in the USA. If you want huge discounts, Zulily is worth considering.
Ques 2: What are some of the other companies that are owned by Wayfair and deal in furniture and home décor goods?
Ans: Some of the companies dealing in home décor and furniture, owned by Wayfair include Joss & Main, Allmodern, birch lane, perigold. Besides these, several other small sites dealing in specialized merchandise are owned by Wayfair. In this way, the company earns significantly from the shares and stocks of these companies.