WayfairEngaged EmployerWayfairAdd an InterviewAbout4,496Reviews863JobsMoreOverviewCompany OverviewLocationsFAQ4,496Reviews863Jobs10,130Salaries2,599Interviews1,293Benefits95PhotosFollow+Add an InterviewInterview QuestionBusiness Intelligence Analyst Interview-Boston, MAWayfair50,000 shoppers with a 0.5% conversion rate for a chair that costs $250. Wayfair makes a 27% profit. Next, 50,000 shoppers will get a 10% discount. What is the conversion rate they must achieve to achieve the same profits as before?Tags:technical, analytical, business caseAnswerAdd TagsFlag as InappropriateFlag as InappropriateInterview Answers13 Answers▲28▼This is incorrect Old revenue = 50000*250*.005=250*250 New revenue with conversion rate r% = 50000*r*250*.9 = old revenue = 250*250 r = .55%Anonymous on Jul 9, 2015Flag as InappropriateFlag as Inappropriate▲3▼July 9 is wrong because the profit margin changes(As sale price changes, but the cost doesn't change)Anonymous on Feb 16, 2017Flag as InappropriateFlag as Inappropriate▲4▼The new conversion rate is 0.944, Profit from case 2 = $16,875 and the third part, if this scenario actually occurred I would give a 10% discount (with the new conversion rate .944%) because the overall profit margin would remain same i.e. $16,875Anonymous on Aug 19, 2019Flag as InappropriateFlag as Inappropriate▲3▼The correct answer is 0.79%. If the selling price is reduced by 10%, the profit margin will not remain 27%. It actually becomes 18.9%. People who calculated 0.56% assumed the margin was static at 27% despite the price reduction.Anonymous on May 28, 2019Flag as InappropriateFlag as Inappropriate▲2▼$250 is the actual cost of the chair (profit not included) or the price listed？？Anonymous on Aug 7, 2017Flag as InappropriateFlag as Inappropriate▲1▼Answer from Nov 21 is correct while July 9 is incorrect. The latter one is just making the revenues equal before and after the sale. It is ignoring the fact that profit % i.e. cost price is also changing after the sale. Before the sale cost price is 182.5*250. After sale cost price would be 182.5*(no >250), as with new conversion rate more customers will be buying. So even if the revenues are equal, profits won't be equal.Anonymous on Sep 25, 2018Flag as InappropriateFlag as Inappropriate▲1▼Total Shoppers 50000 Conversion Rate 0.5 Total Customers 250 Selling Price 250 Profit % 27 Cost price 196.8503937 Profit in $ 53.1496063 Total Sales 12500000 Total Profit 13287.40157 Scenario 2: Selling price 225 Profit 28.1496063 Customers required 472.027972 Conversion Rate in % 0.944055944 Please note that the $250 selling price is (Cost price + 27% profit) on it. So Nov 21, 2014, assumption of doing .27*250 to get the profit is wrong.FatherStrum on Oct 9, 2018Flag as InappropriateFlag as Inappropriate▲6▼Number 2 is wrong, number 1 is right. Just because revenues equal doesnt mean profits will equal - they sacrifice profits when they decide to give the saleAnonymous on Oct 27, 2015Flag as InappropriateFlag as Inappropriate▲3▼Do they expect you to do this in your head, or will they give you pen/paper and a minute?Thomas on Feb 7, 2016Flag as InappropriateFlag as Inappropriate▲1▼Wow!!! All I can say is if these are the types of questions asked, it is no longer a mystery to me as to why corporate people are COMPLETELY out of touch with reality of the field experiences!!!Anonymous on Dec 22, 2019Flag as InappropriateFlag as Inappropriate▲0▼July 9 is correct. Nov 21 is incorrect.Michael on Nov 10, 2016Flag as InappropriateFlag as Inappropriate▲3▼You don't actually need to calculate anything other than the new conversion rate. Why? Look at the equation below: (customer sent = 50000) * (customer bought / customer sent = 0.005 conversion rate) * (revenue / customer bought = 250) * 0.27 (profit / revenue) gives (profit / customer sent). this should be equal to the one after discount. only (revenue / customer bought) changed -> it decreased 10%. therefore, conversion rate needs to increase by (1/0.9), which gives 5.56%.simple on Jul 16, 2016Flag as InappropriateFlag as Inappropriate▲6▼July 9th Answer is the correct answer. It is not hard: Initial profit is = 50000 * 0.005 * 250 * 0.27 (No need for the calculator yet) After sale profit = 50000 * x * 250 * 0.01 * 0.27 (Still don't need the calc) The question asks for the conversion rate such that profit are the same before and after the sale, so... Initial profit = After Sale profit 50000 * 0.005 * 250 * 0.27 = 50000 * x * (250 - (250 * 0.01)) * 0.27 (divide through & cancel) 0.005 * 250 = x * 225 x = (0.005 * 250) / 225 x = 0.0056 or 0.56%Hans on Mar 8, 2016Flag as InappropriateFlag as InappropriateInterviews>WayfairAdd Answers or CommentsTo comment on this, Sign In or Sign Up.