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Wayfair 2020 Earnings: What it Means for You


Have you heard of Wayfair? They may have found their way onto your TV, your social media and maybe your inbox but let’s go a bit deeper.

Coming out of their Feb 25th Q4 and full-year 2020 blockbuster earnings call, some of the data shared really struck us from a supplier perspective.

· Wayfair reports ~16,000 suppliers

· Showed revenue of $14.1 billion USD , up over +50% from 2019

· Reported gross margins of 29%

· No supplier represents more than 2% of revenue

Based on these numbers, supplier revenue was $10.01 Billion USD which works out to about $625,000 USD per supplier with the largest supplier being less than $200 Million.


We looked through our Looking Glass and applied some of our insight; ~70% of revenue is driven by ~30% of suppliers. When you put that lens on this data you get a picture that indicates that about 4,500 suppliers are selling about $7 billion to Wayfair or about $1.5 million each. The range in these "head" suppliers is still pretty wide as the ~$200 million sold by the largest supplier is still 129X the average "head" supplier but the average "tail supplier" (those in the 70% that drive only 30% of sales) is only about $260,000 USD or 16.7% of the average head supplier.


There are lots of reasons why a current supplier could be this much smaller, SKU count, pricing, merchandising, supply chain operations, marketing, relationship, the list goes on and on but If you are going to use Wayfair as a prime online sales channel the opportunity is there: be in the head and not the tail.