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article imageWhat Wayfair's IPO will mean to Australian furniture exporters

By Daniel Taibleson     Apr 25, 2014 in World
As home goods seller Wayfair cruises toward an initial public offering, its financial situation continues to look better and better.
According to the Wall Street Journal, the company recently raised $157 million in capital from a group of investors, and that amount has elevated its valuation to more than $2 billion. An IPO comes with pros and cons for every business, and Wayfair has allegedly been holding off on releasing an IPO in hopes of getting the timing down right. If and when its IPO is launched, it could have huge implications for Australia's furniture exporters. But while some worry that Wayfair could squash other hard goods producers, the company is more likely to breathe new life and revenue opportunities into this market.
Wayfair's Brand Keys IPO Possibilities
Wayfair has been around for more than a decade, but the brand may seem relatively new to the typical consumer. And for good reason: In its early years, Wayfair acted as the brand behind more than one hundred different niche commercial sites online, specialising in very specific products like bar stools and mirrors.
While those online sales vehicles were successful, they didn't drive business for one another because the branding wasn't consistent. So the company switched gears, making Wayfair more visible, and using those niche efforts to provide a singular, massive brand.
Those efforts paid off: According to Business Insider, Wayfair saw its brand awareness among consumers increase from 6 percent in 2012 to 27 percent in 2013. The branding helped consumers turn to Wayfair for more of their hard goods interests, in effect moving away from some of the big-box alternatives that have been dominating online retail for some time. Furniture exporters, including those in Australia where Wayfair has international offices, suddenly had a better outlet to export their home goods.
Capitalising on Forecasted Growth
One reason Wayfair is drawing so much IPO attention is that the company's sales market is projected to explode. Its CEO believes that the market for selling online hard goods in the United States will increase by 12 to 15 percent in the near future, with other countries following suit. That rapid growth shows the earnings potential currently owned by Wayfair's Australian operations. If Australian trends follow U.S. projections, plenty of new sales opportunities will spring up, creating new sales opportunities for furniture exporters in the country.
And with an IPO, Wayfair will have the liquid assets to make acquisitions and investments as needed, increasing their own market share while driving sales for the entire hard goods market.
Building a Furniture Empire to Scale
One of the main benefits Wayfair can pass on to exporters is its potential to build sales vehicles entirely to scale. A scalable online hard goods solution is necessary to stay competitive with the price-slashing that big box chains can afford to churn out. By employing scalable solutions, Wayfair can minimise wasted expenses and keep operational costs low for everyone — customers, exporters and everyone in between, as Peter Cohan mentions in Forbes. Those savings are ultimately passed on to the buyers, sparking increased sales and better production from Wayfair and its partners.
That scalability pairs uniquely with brand's unique product offerings, which are what truly sets the company apart from other e-retailers. Wayfair products are unique to that business, pushing out other larger competitors and creating a dedicated relationship with its furniture exporters and providers. If the IPO is embraced by investors — which is highly expected — Wayfair and its partners will be set up well for the future.
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