Couch Ouch: The High Price of Free Delivery

The New York Times: “Most major furniture retailers will charge at least $130 to deliver a couch. But Wayfair will ship or deliver any purchases costing $49 or more for free, bringing large pieces of furniture into the entrance of your home. (Taking the item to a specific room or assembling it costs extra.) And if the order is damaged or if the customer simply doesn’t like the color, Wayfair says, it will take the item back.”

“To help customers wade through its virtual bazaar, Wayfair has some of its 1,000 software engineers constantly developing new features for its app. One allows consumers to snap a photo of an item, a couch or chair, that Wayfair then matches with products on its website. Another recently released feature produces a 3-D image of the Wayfair product, allowing consumers to see how a piece looks in a room and, perhaps more important, whether it will fit the room’s dimensions.”

“But the big question hovering over Wayfair is whether the company can ever make money by delivering bulk furniture virtually for free. The company is expected to lose nearly $200 million this year and has been a favorite of short sellers, betting that the company’s stock price will fall … Wayfair argues that the margins of its competitors, like Restoration Hardware or Williams-Sonoma, are higher because they are building extra profit into their pricing. A sofa from another company may start at $1,000, but Wayfair sells its sofas at an average price of $600, a spokeswoman said.”

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