Wayfair made bulky furniture move through its own pooled network

Furniture e-commerce has a logistics problem hiding inside the catalog: items are bulky, fragile, slow to replenish and expensive to move through parcel networks built for small boxes.

Wayfair built CastleGate and the Wayfair Delivery Network so suppliers could forward-position inventory and benefit from pooled freight scale. Supply Chain Dive reported CastleGate Forwarding moved more than 40,000 TEUs in 2020, equivalent to a top-30 U.S. importer by volume.

The clever move was to make supplier inventory travel as part of Wayfair's network before the customer order. That let Wayfair optimize ocean freight, warehouse placement, middle-mile moves and large-parcel home delivery as one system.

Pool the awkward freight

Supplier pooling created buying power in ocean freight and warehouse capacity.

Forward-positioned furniture could reach customers faster than pure dropshipping from supplier warehouses.

A large-parcel delivery network reduced dependence on congested common carrier paths.

The logistics service made small suppliers more competitive while tightening Wayfair's control of the customer promise.

When the product is hard to ship, a marketplace can win by owning the awkward middle rather than only matching buyers and sellers.

In 2021, Supply Chain Dive reported CastleGate Forwarding's 40,000-plus TEUs for 2020 and said 90% of U.S. large-parcel orders went through Wayfair's middle-mile network while last-mile operations covered 70% of U.S. large-parcel deliveries.