When college friends Niraj Shah and Steve Conine began selling storage furniture out of Conine’s house in 2002, it would have been hard to predict that two decades later, the business would evolve into the $12 billion Wayfair empire.

Now, as the company marks 10 years since going public, it is facing a critical period. Despite years of growth, the e-commerce giant has struggled with profitability. In response, Shah and Conine have cut down their headcount and focused on getting lean, all while making a serious move into physical retail for the first time. In other words: There’s a lot going on.

Here are the five big questions Wayfair needs to answer as it heads into its next decade.

1. How many stores will it need? Wayfair has acknowledged that it needs physical locations to balance its online business, and with the May opening of its first true total-home store, in the Chicagoland market, the company is off to a good start. Leadership has not given any indication of how many more they expect to open, but a good rule of thumb would be to look at the competition. While its business model is different, Ikea is the retailer closest to the full-home assortment Wayfair sells, and the Swedish juggernaut has 51 stores in the U.S. It’s not unreasonable to project that the retailer will need something close to that count, if not quite that many, to reach its full potential. It’s taken Ikea 40 years to get to that total, so Wayfair clearly has its work cut out for it.

2. Does it need all its sub-brands? The company’s original incarnation—called CSN Stores—had hundreds of individual websites and brand names for its multiple product categories. When it rebranded as Wayfair in 2011, it eliminated most of them. Now it has just a few nameplates: the mainstream Joss & Main, AllModern, and Birch Lane; and Perigold, a premium designer-focused brand. They are all interrelated, and you can buy the first three on Wayfair.com and in its store. There are also several small-format stores for these sub-brands. But is the company diluting its marketing and customer-facing positions with multiple nameplates? Might it be better served keeping the non-Perigold ones only as brands within Wayfair, rather than as stand-alone entities? Does the consumer understand all of this? Does she care?

3. What about Perigold? The upscale brand may be the one that makes the most sense to keep separate and apart from the rest of the business. But if Wayfair is going to do this, it really needs to make the commitment to build out the brand. It is opening its first stand-alone Perigold store next year, but as with Wayfair stores, one is not nearly enough. If it’s going to go up against players like RH, Arhaus, and local and regional retailers, it needs a much more significant presence.

4. What about Wayfair’s infrastructure? Right now the company relies on its vendors to fulfill most orders from their own distribution centers. It has a relatively small number of its own—18 versus the hundreds that a company like Amazon has—and its fulfillment system, CastleGate, is mostly used for high-volume, repeat orders. To make fulfilling furniture orders truly efficient, Wayfair will need a bigger distribution network.

5. When will it be consistently profitable? Over the course of its decade as a public company, Wayfair has only shown a profit during the height—depth?—of the pandemic, when its business exploded. It has worked hard since to bring down its operating costs and overhead, and has talked about showing a profit in an upcoming quarter. Wall Street remains skeptical, however, and other than a dramatic spike during the 2020-to-2021 Covid boom, when its stock price skyrocketed to over $300, its shares haven’t seen the numbers investors have been hoping for. Its most recent close was at about $40 a share—up from its opening price around $29 a decade ago.

Wayfair has come a long way in those 10 years, and its $12 billion in annual sales makes it the largest or second largest seller of home furnishings products, depending on how you count. It’s an admirable achievement, but until the company addresses these five critical areas, it will still be just another face in the Wayborhood.

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Warren Shoulberg is the former editor in chief for several leading B2B publications. He has been a guest lecturer at the Columbia University Graduate School of Business; received honors from the International Furnishings and Design Association and the Fashion Institute of Technology; and been cited by The Wall Street Journal, The New York Times, The Washington Post, CNN and other media as a leading industry expert. His Retail Watch columns offer deep industry insights on major markets and product categories.