It’s easy to look at a big company and think of them as always being a big company. This image is further reinforced by stories of businesses that have been labeled an ‘overnight success,’ thus appearing to have never been in that infant stage where everything is smaller and there is only one or two people who are responsible for wearing many hats.
However, any honest entrepreneur will tell you that there is no such thing as making it big overnight. And even though it may seem like a particular business may have blossomed over the course of just 24 hours, growing from being a relative unknown into a million-dollar product or service provider in a blink of an eye, the reality is much different.
In fact, a number of today’s big-name companies have been years (if not decades) in the making. One good example of this is Wayfair as this company, which technically wasn’t even in existence eight years ago, has now become a dropshipping empire. But how did it begin? Rather humbly.
Wayfair’s humble beginnings
Wayfair’s beginnings date back to 2002, when two high school students, Steve Conine and Niraj Shah, met during a Cornell University summer program. Both wound up attending the university upon graduation, where they took a class on entrepreneurism, a class which inspired a business idea they knew they had to try out.
Conine and Shah decided that they wanted to create a business that capitalised on what appeared to them to be a huge market opportunity. Operating out of a spare bedroom in Conine’s house, the duo decided that their big idea would involve selling stereo stands and racks to consumers on the internet.
They were right and, after they got up and running, business started booming. However, in time, their product offerings expanded to other items in the home goods space, growing their initial business venture from being one single website to more than 250 online stores.
Tech Crunch shares that the initial company that housed these individual retail spaces was known as CSN Stores. But after all of these sites were consolidated in 2011, almost a decade after they first started, the company rebranded and the site we know today as Wayfair.com was born.
Since that time, Statista reports that Wayfair’s revenues have grown steadily, with the company earning just over $601 million in 2012 to annual revenues of $4.72 billion in 2017, sometimes more than doubling from one year to the next. The staff roster has grown as well, increasing from just the two founders to now over 3,800 employees companywide.
In fact, by 2017, Wayfair.com had become the fourth most popular online store in the furniture and appliance segment, with $2.64 billion in revenue that year. Beat out only by Amazon ($7.39 billion), Home Depot ($3.79 billion), and Walmart ($3.38 billion), Wayfair sold more that year than many other big names, like Lowe’s ($1.36 billion), Kohl’s ($1.08 billion), and QVC ($996 million), just to name a few.
Part of this growth is obviously attributable to offering customers more than just stereo stands and racks as, according to Wayfair, they now sell more than 10 million products in total, delivering approximately 9.2 million different orders per year. How? This is where dropshipping comes in.
Dropshipping’s role in the process
Shopify shares that Wayfair’s sole delivery method is dropshipping. If you’re unfamiliar, dropshipping involves selling products that are delivered from a manufacturer or wholesaler direct to the consumer, essentially cutting out the middle man.
One huge benefit of this method of delivery involves not having to purchase the products before they’re ordered, a savings in both up-front costs and reduced inventory expenses. But how did Wayfair create a successful dropshipping business which encompasses more than 10,000 suppliers and five different brands?
The key to making this type of high level ecommerce business work, especially when there is a bunch of moving parts, involves selecting drop ship suppliers that offer both you and your customers top quality service. This means not always going for the lowest price and choosing suppliers with Positive Feedback Rates.
Where will this dropshipping giant go in the future? Who knows. But it will definitely be fun to find out.