Wayfair Inc. (W)

Goods are mostly shipped by the supplier straight to the buyer, and the marketplace earns on the difference between selling and buying price. The industry's main difficulty is logistics: a sofa does not fit in a parcel, delivery is expensive, and a return costs more still. That is precisely why the company built its own large-item delivery network.

Demand is tightly tied to the housing market: furniture is bought when people move, and when mortgages are expensive they rarely move. The pandemic surge gave way to a long slump, and the company spent years cutting costs in pursuit of profitability. Risks: the housing cycle, delivery costs and competition from large marketplaces. The company pays no dividend.