Wayfair...Living In An Amazon World
Wayfair Inc. engages in the e-commerce business in the United States, Europe, and internationally. The company offers approximately 10 million products for the home sector under various brands. It offers a selection of furniture, décor, decorative accents, housewares, seasonal décor, and other home goods through its sites, such as Wayfair, Joss & Main, AllModern, DwellStudio, Perigold, and Birch Lane.
Over the past almost 20 years, Conine has become one of the largest online sellers of home goods, offering more than 10 million products from more than 10,000 suppliers. But lets face it, Wayfair lives in an Amazon world.
In 2017, Amazon launched two private labels that focus on the furniture category: Rivet, a midcentury modern line aimed at millennials, and Stone & Beam, a pricier country-modern brand targeting families. Both private labels off sofas, chairs, loveseats, side tables, lamps, and wall art and if you are an Amazon Primer member, shipping is free.
Amazon has since opened several new warehouses to store and ship furniture as well as expanding its inventory of furniture and home goods. And this is where Amazon is able to flex its mucles. Wayfair relies on drop-shippers to ship items to their warehouses, then to the customer. Because Wayfair doesn’t own the product or control the delivery of the product to your home, this puts Wayfair at a huge disadvantage relative to Amazon. And when it comes to price, well from my own experience, very few companies beat Amazon on price.
Wayfair (W - Get Report) , the online home-furnishings specialist, was initiated sell at Berenberg, where analyst Graham Renwick said that while it has disrupted the industry the company's "first-mover advantages are being eroded as competition intensifies."
"In the home and living market, players must lead on price, choice or convenience," Renwick said in a report. The Boston company "does not differentiate on any of those factors."
Further, the "majority of Wayfair's bestsellers can be found at competitors, where are they are often cheaper -- in particular at Amazon (AMZN - Get Report) ," he wrote.
"Increasing online price comparability will erode brand loyalty, with clear negative implications for Wayfair's profitability," he wrote.
Wayfair also is increasingly unprofitable, on the back of capital-spending requirements and outlays for fulfillment and to acquire customers, Renwick wrote.
When looking at the monthly chart, I see a broken chart.
The broken chart has been confirmed by price breaching the $143 level on the weekly chart.
Thus, the chart suggests, to go short on the pull back to the daily supply at $148 with a target at the daily demand at $87.
This post is my personal opinion. I’m not a financial advisor, this isn't financial advise. Do your own research before making investment decisions.