stockrowWhat it does
Wayfair is a home-goods retailer based in Boston. Founded in 2002, it sells furniture, décor, housewares and home improvement products through websites, an app and physical stores. Co-founder Niraj Shah is its chief executive officer and president.
The company serves households shopping across a range of styles and budgets, as well as business customers ranging from startups to global enterprises. Its sites are designed for browsing: customers can explore product images, room ideas and personalized recommendations as well as search for specific items. Its mobile app includes a tool for viewing products in a room using augmented reality.
The Wayfair brand accounts for a significant majority of revenue. The company also operates specialty brands, including AllModern for modern styles, Joss & Main for home furnishings and Perigold for luxury home products. Wayfair Professional serves business customers. House brands organize selected products by style and price point.
Most products ship directly from suppliers, although an increasing share passes through Wayfair’s logistics network. Suppliers can position goods in CastleGate warehouses, and the Wayfair Delivery Network handles much of the large-parcel delivery process. Physical stores let customers see products in person and use in-store services alongside the online assortment.
How it makes money
Wayfair earns revenue primarily by selling home products to consumers and businesses. Its two reporting segments are the U.S. and International. In FY2025, U.S. revenue was $11.0 billion and International revenue was $1.5 billion. Net revenue increased by 5.1% in 2025 compared with 2024; in Q3 2026, revenue grew 9.7% year over year.
The company recognizes net revenue when an order is delivered. Results depend on both the number of orders delivered and average order value, which reflects product mix, promotions and customer purchasing behavior. In 2025, higher average order value, along with more orders, drove the revenue increase.
Wayfair uses advertising, product discovery tools and customer service to attract shoppers and encourage them to return. In 2025, 80.3% of orders came from repeat buyers. Wayfair Rewards offers cash back and other benefits, including free shipping and access to member-only sales; its credit cards also offer cash back rewards. Wayfair says loyalty members can generate more annual profit because the advertising cost associated with their revenue falls.
Suppliers can use Wayfair’s logistics, merchandising and media services, including sponsored content. Fees earned for supplier services are among the factors affecting cost of goods sold. Wayfair also prices and promotes products across a selection supplied by many vendors, with the aim of serving different budgets and shopping needs.
| Segment | Revenue, FY2025 | Share | Change on the year |
|---|---|---|---|
| U.S. | $11.0 billion | 88.1% | 5.78% |
| International | $1.5 billion | 11.9% | 0.41% |
Customers and how it sells
Wayfair serves individual households and business customers. Household incomes typically range from $25,000 to over $250,000, while business customers range from small startups to global enterprises. Wayfair Professional is its dedicated offering for professional buyers.
The company had 21 million active customers as of December 31, 2025. Active customers are people who purchased directly from its sites at least once during the preceding twelve months. In Q3 2026, active customers were up more than 4% and new-customer orders were up over 14% year over year.
The U.S. accounted for 88.1% of FY2025 revenue, and International accounted for 11.9%. Outside the U.S., the Wayfair brand operates in Canada, the United Kingdom and Ireland. Wayfair exited Germany in January 2025.
Customers can shop online or in stores. As of December 31, 2025, Wayfair operated 12 physical retail stores, excluding outlets, across 4 U.S. states. The company uses paid channels such as search, display and social advertising, as well as unpaid channels including search optimization, email and social media. It also says shoppers can discover its products through AI assistants and continue shopping on its site or app.
| Segment | Revenue, FY2025 | Share | Change on the year |
|---|---|---|---|
| U.S. | $11.0 billion | 88.1% | 5.78% |
| International | $1.5 billion | 11.9% | 0.41% |
Suppliers and costs
Wayfair offers over 40 million products from approximately 20 thousand suppliers. Many are small, family-run businesses without well-known brands or easy access to a large retail customer base. Wayfair provides supplier technology, demand and inventory information, merchandising services and access to its customers.
Its primary fulfillment method is drop-shipping: an order is sent to a supplier’s warehouse, and Wayfair arranges shipment to the customer. Suppliers can instead position inventory in CastleGate warehouses. CastleGate Forwarding provides inbound freight services, including for products coming from Asia. Wayfair says suppliers retain ownership of inventory in its stores.
Cost of goods sold varies with product mix, pricing, wholesale costs, shipping and fulfillment costs, customs duties and supplier-service fees. It was 69.8% of net revenue in 2025. Operating expenses include advertising, customer service, merchant fees, technology and administrative costs. Advertising was 11.4% of net revenue in 2025. Wayfair also relies on third-party carriers and contractors alongside its own logistics facilities.
- Revenue$12.5B
- Cost of revenue−$8.7B
- Selling, general and administrative−$3.2B
- Other operating costs−$547.0M
- Operating income$17.0M
Competitive position
Wayfair competes in a fragmented home-goods market against furniture stores, big-box retailers, department stores, specialty retailers and online marketplaces. Named competitors include Ashley Furniture and Rooms To Go in furniture; Home Depot, IKEA and Walmart among big-box retailers; and Amazon, eBay and Etsy online. Crate and Barrel and Williams Sonoma compete as specialty retailers. Argos, Canadian Tire and John Lewis are among its international competitors.
Wayfair identifies selection, browsing, product discovery, price, convenience, fulfillment speed and customer service as important competitive factors. Its platform offers products from many suppliers, while its custom-built technology supports merchandising, supplier integration, advertising and operations. Its warehouses and delivery network are designed for home goods, including heavy and bulky items.
Our reading: The breadth of Wayfair’s assortment and its supplier relationships give it a meaningful basis for competing in product discovery, but customers can also shop across many other retailers and marketplaces. Our reading: Its specialized logistics and technology can support the shopping and delivery experience, although the network requires continued operational execution and still uses third-party carriers. Our reading: Rewards and repeat purchasing may help customer retention, but the company continues to spend substantially on advertising.
| Competitor | Where they compete | Threat (our reading) |
|---|---|---|
| Ashley Furniture | Furniture stores | Medium |
| Rooms To Go | Furniture stores | Medium |
| Home Depot | Big-box home goods and improvement | Medium |
| IKEA | Big-box home goods and furniture | Medium |
| Walmart | Big-box home goods | Medium |
| Amazon | Online home goods and marketplace | Medium |
| Etsy | Online home goods marketplace | Medium |
| Williams Sonoma | Specialty home retail | Medium |
Growth opportunities
Wayfair’s growth strategy centers on acquiring customers, increasing repeat purchases and expanding the categories customers buy from its family of brands. It plans to invest in technology and AI, add physical stores, develop its loyalty program, improve delivery speed and grow in its existing international markets. It also says it may pursue acquisitions opportunistically.
In Q3 2026, orders rose 12% year over year. U.S. revenue increased 11.4%, while International revenue fell 2.3%. Wayfair says the home-furnishings categories in Canada and the U.K. continue to lag the U.S. market. The company launched its loyalty program in those international markets in spring 2026.
Wayfair is also developing ways for shoppers to find its products through AI services. Customers can purchase from Wayfair within Google’s AI experiences, and the company has launched a branded shopping agent in ChatGPT. Wayfair says most shoppers who discover it through AI tools continue their journey on its own site and app.
For its luxury brand Perigold, Wayfair estimates that high-income U.S. households spend more than $100 billion a year on their homes. The company has opened Perigold stores and plans to expand its physical presence across its brands. It also plans a full rollout of creator storefronts on its site and app in 2027.
- $13.7BFY2021
- $12.2BFY2022
- $12.0BFY2023
- $11.9BFY2024
- $12.5BFY2025
Structural risks
- Consumer spending and trade: Economic instability, inflation, interest rates and changes in trade policy can affect consumer behavior and Wayfair’s results. The company says the global trade environment remains uncertain.
- Competition and customer experience: Wayfair expects e-commerce competition to increase. Its ability to compete depends on factors including price, selection, customer service and delivery; delayed or damaged shipments and inconvenient returns can affect the experience.
- Suppliers and fulfillment: Wayfair must attract quality suppliers and offer them a cost-effective fulfillment process. Heavy and bulky home goods can be difficult to ship, and the company relies on suppliers and third parties as well as its own network.
- Operations and growth: Failure to manage growth and organizational change could lead to over- or under-investment, weaknesses in systems or controls, operational mistakes and reduced customer satisfaction.
- Debt and regulation: Outstanding or additional debt could limit operating flexibility. Evolving internet and e-commerce regulation, unfavorable changes or failure to comply could harm the business.
Leadership
Wayfair has a dual-class common-stock structure; co-founder Niraj Shah is co-chairman as well as chief executive.
| Name | Role | Since | Total pay, FY2025 |
|---|---|---|---|
| Niraj Shah, | Co-Founder, Chief Executive Officer and President, Director (Co-Chairman) | — | $280.8 million |
| Jon BlotnerPresident, Commercial and Operations | — | $8.1 million | |
| Kate Gulliver, | Chief Financial Officer and Chief Administrative Officer | — | $7.9 million |
| Fiona Tan, | Chief Technology Officer | — | $9.5 million |
Bottom line
Our reading
Our reading: Wayfair is a home-goods retailer built around a broad supplier assortment, online discovery and delivery of products that can be difficult to ship; repeat buyers and loyalty programs are important to its model. (item1, item7)
Our reading: Its growth opportunities include stores, new shopping channels and international markets, while its results remain exposed to U.S. consumer demand, competition and the cost and execution of fulfillment and advertising. (item1, item7, item1a, call_prepared)