Wayfair does One Billion in Sales using Drop Ship Suppliers

The owner of Way Fair first started from his living room. He relied on dropship suppliers, and he had websites in several different niches. He then took all of his 200 niche stores and merged them into one big store called Wayfair. Wayfair deals with thousands of dropship suppliers, all of whom drop ship 95% of the products that Wayfair sells on their website. Wayfair sold over a billion dollars worth of products last year. How is it possible for Way Fair to succeed while so many in the drop ship business fail?

Yes, there is something they know that you dont. There are several critical points that must be addressed that is out of the control of your software provider, and that is

a) Product Selection 10%

b) Product Price 20%

c) Inventory Levels 35%

d) Profit Margin 35%

e) Leverage the Risk of Advertising Your Bet

f) Get Traffic to your Website Your Result

Before you read on, I want to emphasize on one point, if you get B, C or D wrong you will most likely fail. If you load products on your website without knowing the inventory levels, you are relying on a chance to succeed in your business. Let me give you a formula to follow to succeed.

If your a (product selection) is greater than 20,000 and your b (Product Price) is the same as your biggest competitor (ex: Amazon) and your supplier has good c (Inventory Levels), then you have a high chance to succeeding.

You need to make sure that you only display and sell what your supplier has in their inventory, remove everything else (Shopping Cart Elite can automate this).

The final step is implementing d, e and f. You can implement Google Shopping or another organic source of traffic to run a test. You can also consider using eBay Terapeak to get your result. The result your looking for is to get a sales conversion percentage for your business. Sales conversion is how many visitors browse your website versus how many visitors will buy something from your website. So if, 200 visitors came to your website and only two bought something, this means you have a one percent sales conversion. You can try to improve your sales conversion by implementing my strategies here http://www.youtube.com/playlist?list=PL51E2669965FA77F1&feature=plcp

Once you get your final sales conversion number, you need to implement e and f. Take your d (Profit Margin) and divide it by half to see what you can do with e (Leverage the Risk of Advertising) in order to gain at least 200 new visitors for f (Get Traffic to your Website).

For example if you make twenty dollars in net profit for every 200 visitors that browse your website, then you want to find a way to get your next 200 visitors for ten dollars so you can make ten dollars in net profit after advertising.

Believe me, when I say that it is all a numbers game. Its been and always will be a numbers game. Its just a bit more complex for an average Joe, which is why if you get it right you can be all the way on the top of the pyramid counting cards without anyone ever knowing how you do it.

Once you do your math, and you realize that you cant make any money, you will know what you need to focus on. Maybe you will need to find a new product, new supplier or new niche. If you run your business like a statistic, instead of wishful thinking, you will succeed. See whose doing very well in the market right now, check their prices, work your numbers and see where you need to be to make your business work. The second you work your business as a hobby, experiment or wishful thinking you are leaving it up to chance to succeed and thats a very risky way of playing the game where the super majority of entrepreneurs fail.

Wayfair made it because they got their formula perfect. They have the product selection, price, inventory and profit. Then they just invest their profits in a very careful and calculated way on advertising to gain more customers, more sales and more revenue.