Wayfair is commonly referred to as the “Amazon of the Furniture and Home Goods” industry. As of 2022, the company has 22 million active customers. While this may seem a small number compared to the number of people shopping at the likes of Amazon and Walmart, Wayfair is unique. The company has managed to retain its dominance in the Furniture and Home Goods category despite these massive competitors. In its latest financial results, the company brought in $3.17 billion in revenues.
The company’s business model is similarly unique. While Amazon has invested heavily in building its inhouse logistics network, and Walmart and Target are slowly growing eCommerce in addition to the brick and mortar channel that fueled their growth, Wayfair is different. The company relies heavily on a drop-shipping model. In this model, when Wayfair customers place orders, they are sent directly to sellers to be picked, packed and shipped. According to estimates, the company drop ships as much as 95% of the products that it sells to customers.
Given how top of mind it is to consumers looking for products in its focus category, Wayfair is an attractive channel for sellers and brands. In a channel where 95% of sellers are drop shipping, it becomes crucial to identify the right 3PL partner – one that can both help you scale revenues and delight customers.
Before we jump into finding a 3PL, it’s worth asking – why is selling on Wayfair great for sellers?
Why Selling on Wayfair is Great For eCommerce Merchants
Lesser Competition Than on Other Marketplaces
Wayfair sources its products only from 23,000 suppliers, which is miniscule compared to the 2.5 million 3rd party sellers on Amazon’s marketplace and still very low compared to the 150,000 on Walmart. This allows brands to be much more prominently featured and visible to customers, enabling increased sales and profitability.
No Marketplace Referral Fees
Wayfair buys products from its suppliers at wholesale prices, and then charges retail prices to its end customers. This can be a more attractive model to sellers, compared to the referral fee based model that Amazon operates on.
Wayfair Covers Shipping Fees
Like other marketplaces, Wayfair covers the cost of shipping for its sellers. All shipments are billed to Wayfair’s Small Parcel (FedEx), LTL or White Glove shipping accounts. Merchants can either choose to use prepaid shipping labels from Wayfair or print their own shipping labels and then bill Wayfair for the associated charges.
“Cahoot has a great app and tech platform for e-commerce and has been a great partner. I evaluated numerous competitors and they provided by far the most compelling combination of good pricing and service. Their people are top-notch and there to help you succeed as a partner.”
What Should You Look For in a Wayfair 3PL?
Automated Inventory Level Monitoring
Sellers on Wayfair are encouraged to send Inventory Feeds (updates on how much stock of product is available at warehouses) as frequently as possible. This is because Wayfair wants to ensure a good customer experience by only shipping products that are in-stock.
With traditional 3PLs, stock-keeping of inventory levels is often conducted on spreadsheets, or worse, by hand. These inefficient tools create many problems in staying on top of the inventory levels in your warehouses.
If you overcommit on orders you cannot actually fulfill, then you’re forced into cancellations that ruin your relationship with both Wayfair and your customers.
With Cahoot’s intelligent software, inventory is automatically decremented and you get color-coded alerts as you start running out of stock – this ensures you’re always proactively replenishing your inventory and boosting your sales, rather than scrambling to fix problems.
Ability to Offer Late Same Day Cut Offs
Wayfair encourages sellers to deliver a great experience to their customers by ensuring that cut-off and pickup times are set as late as possible, so that customers can experience fast shipping. This might also be Wayfair’s attempt to keep themselves competitive and relevant in the era of ultrafast fulfillment.
Most traditional 3PLs struggle to meet the demanding expectations from today’s customers. Cahoot is used to meeting expectations for late cutoffs, weekend pickups / deliveries through our expertise in helping Amazon sellers thrive on the Seller Fulfilled Prime (SFP) program. Through our network’s best-in-class fulfillment capabilities, you can meet and surpass the expectations of Wayfair customers.
Minimum Lead Time - Every SKU Ships Fast
If different SKUs will ship in different timelines, Wayfair expects merchants to proactively communicate that to customers. However, today’s demanding customer expects ultrafast order fulfillment across every SKU. To meet that, you need to ensure that your 3 PL deploys excellent pick-pack practices and has high quality order fulfillment operations in their warehouses.
Consider working with a partner like Cahoot – to fulfill orders for our sellers, a warehouse must pass a 44-point checklist. This ensures that only the very best fulfillment centers join our network. These fulfillment centers are well equipped to handle a variety of SKUs – small, light, slow and fast-moving, heavy, larger-sized and seasonal.
“I highly recommend Cahoot to anyone looking to outsource fulfillment for their business. They go above and beyond to help make sure your needs as a business are met. I reached out to 20 other 3PL’s, and fulfillment centers. Cahoot was the best option for business relations, services, and pricing by far.”
–GN Products LLC
Responsive, Reliable Customer Support
Needless to say, order fulfillment is a complex operation and things don’t always go to plan. When you run into issues, customers or Wayfair won’t blame your 3PL – it’s your relationship and brand equity that’s at stake with these key stakeholders. While things can go wrong, it is crucial to ensure that your 3PL offers responsive, reliable customer support to fix the problem and restore your operations to normalcy quickly.
Most traditional 3PLs lack personnel with either the experience or expertise required to quickly troubleshoot issues. It is essential that you identify 3PLs that have a dedicated and qualified support team, ready on hand to resolve problems and ensure you’re constantly selling more to your customers.
Cahoot - The Best 3PL for Wayfair
Cahoot’s peer-to-peer order fulfillment network is built for the future of eCommerce. Our network of warehouses is located at strategic locations across the US, enabling Wayfair merchants to offer their customers ultrafast shipping. Our fulfillment centers are well equipped to handle all types of SKUs – including heavier, seasonal, larger-sized and slow moving ones.
We are compliant with all expectations Wayfair has from its dropshippers. Our US based customer support team is always ready and responsive to ensure that your order fulfillment operations are running smoothly all the time.
Automated Inventory Level Monitoring
Ability to offer late same day cutoffs
Minimum Lead Time – Every SKU ships fast
Cahoot is committed to helping Wayfair sellers grow their businesses with fast and affordable ecommerce order fulfillment service.
If you’d like to find out how Cahoot can help your ecommerce business, please get in touch with us. We can’t wait to show you how Wayfair order fulfillment was meant to be.
If you are selling on multiple sales channels and are interested in 3PLs that can help you with fulfillment, you can read our other articles: