When you shop online at Wayfair.com, you pretty quickly see that, while having the hugest selection of home furnishings and décor, the prices are some of the lowest around.
From couches and sectionals to bathroom vanities and lighting, Wayfair has it all, and you could pay significantly less than at any other retailer.
But, why is Wayfair so cheap? Well, there are several reasons, and I will be talking about them in the article below, so keep reading!
Why Is Wayfair So Cheap?
10. Wayfair Has No Real Estate
Did you know that Wayfair is, for now, totally online?
Furthermore, the company that was founded by Steve Conine and Niraj Shah (who also serves as CEO) has zero brick-and-mortar stores.
So, with zero stores comes zero utilities and zero upkeep.
However, that will soon change, as there have been reports that Wayfair is opening a 100,000-square-foot retail space in the King of Prussia Mall, in Pennsylvania.
There is also a report that they are opening a 150,000-square-foot store in Wilmette, Ill.
Additionally, Wayfair has already opened an AllModern store, with plans to open another one and a Joss & Main (these brands are all owned by Wayfair) in the future.
9. Wayfair Hires No Salespeople
In keeping with the fact that there are no (or next to no) Wayfair stores, there are no salespeople.
Furthermore, with no salespeople means no salaries or wages to pay, which also helps keep costs down.
Of course, once Wayfair starts getting going with its brick-and-mortar locations, this could change.
8. Wayfair Is All Online
Furthermore, because they are all online, Wayfair doesn’t house much of the merchandise itself.
Instead, they have a network of 11,000 suppliers and merchandisers who house the products.
Additionally, this is how Wayfair operates totally – or at least, for the vast majority – online, and part of how they keep their prices so low.
Therefore, its website is like an online showroom for suppliers.
7. Wayfair Is Mostly Drop Shipping
When someone buys something off Wayfair, Wayfair then buys it off the supplier (for an agreed-upon rate), and the supplier ships it to the customer.
This method of doing things is known as drop shipping.
Furthermore, 70 to 80 percent of Wayfair’s merchandise is run through drop shipping channels.
Additionally, because Wayfair can promise to sell a lot of one item or another, they can negotiate a lower price for which to buy the item from the supplier.
This, in turn, allows Wayfair to charge less to the customer.
6. Wayfair Is Operating Castlegate
However, what about the other 20 to 30 percent of merchandise that Wayfair isn’t dropshipping?
Well, that passes through Wayfair’s in-house logistics company, CastleGate.
Furthermore, CastleGate is comprised of 18 fulfillment and 38 delivery centers in the U.S., Germany, and the UK.
Additionally, Wayfair found that when it comes to transport, shipping and delivery, they could cut costs (and keep tighter control) by managing it themselves.
Then, those cut costs get passed onto the customer.
5. Wayfair Is Always Running Sales And Deals
It is a rare day that you visit Wayfair’s website, and they aren’t running a deal or a sale.
Additionally, there are always three guaranteed ways to save: Warehouse clearouts, Closeout deals (discontinued products), and Open Box deals.
Furthermore, there is also the Way Day event, where you can save up to 80 percent off the suggested retail price on everything Wayfair sells.
This generally occurs at the end of April and lasts two days.
4. The Customer Assembles Most Items From Wayfair
When you stroll through a fancy furniture store and make a purchase, you are usually buying the item – a dresser, a nightstand – intact, with no assembly necessary.
With Wayfair, one of the ways they can offer such cheap prices is because the customer does some of the legwork – namely, assembling the item.
Of course, you can add on item assembly (for a hefty sum), and some items do come already assembled, though those tend to be more expensive.
However, for the most part, the customer saves because they are setting aside 20 minutes, an hour, or even two hours to put together the product.
3. You Can Get $40 Off When You Sign Up For The Wayfair Credit Card
To help customers save even more when you sign up for the Wayfair credit card and pick the five percent rewards back as your perk, you get $40 off your eligible order of $250 or more.
However, there are actually two different Wayfair cards: the Wayfair credit card that can only be used at Wayfair or its sister brands.
Then there’s the Wayfair Mastercard, which can be used anywhere that accepts Mastercard.
2. You Get Five Percent Rewards Back From The Wayfair Credit Card
To access the $40 off your first order of $250 or more, you do have to pick the five percent rewards perk (versus 24 months of interest-free billing).
However, the rewards – which are basically cash back – are an excellent way to spend and save.
Furthermore, if you’re furnishing/decorating in stages, for example, you can get $40 off your first purchase if you use the Wayfair credit card.
Then, five percent of whatever you spend gets put onto your account, like credits, for the next purchase.
1. Not Everything Is So Cheap From Wayfair
Unfortunately, not everything from Wayfair is so cheap…but most are.
Still, some items sell for thousands – sometimes tens of thousands – of dollars, like this area rug by Brayden Studio, which sells for $19,499.99 (and that’s on sale).
However, it just goes to show that Wayfair has something for everyone and every price point.
To know more, you can also read our posts on where the Wayfair store is, where Wayfair furniture is made, and whether Wayfair price matches.
Conclusion
There are many reasons why Wayfair is so cheap, from the lack of real estate to the CastleGate logistics in-house transportation company.
Furthermore, whether they’re running a sale or not, Wayfair likely has a product that works for you, at a price that can’t be beaten.
