Online furniture retailer Wayfair (W) - Get Report is feeling the pressure from e-commerce giant Amazon (AMZN) - Get Report on Monday as it plans to revamp its furniture marketplace.

Amazon is reportedly planning to launch the new "Unified Delivery with Services" change to its platform during the third quarter this year, according to a report by Furniture Today.

Under the plan, furniture retailers won't be required to sell nationwide and they can set their own pricing that will change with the services an Amazon customer chooses. Amazon will reportedly be asking for a $39.99 monthly fee for an unlimited number of listings, in addition to 15% on the product sale and 20% on the services, Furniture Today reports, citing Brett Hobson, Amazon's business development representative in the furniture category.

Amazon did not immediately return requests to confirm Furniture Today's report.

Shares of Wayfair fell by more than 5% to $43.59 at 3 p.m. EST. Amazon, with a market cap of $433.36 billion, is more than 100 times as valuable as Wayfair, whose market cap is $3.77 billion. 

Notable short-seller Andrew Left of Citron Research, who's been criticizing Wayfair for at least two years, says the company's business model doesn't work and its internal controls are like Bernard Madoff's.

"The accounts payable, the cash flow, the business model -- it's stupid," Left said by phone last Wednesday. "They'll never make money." In 2015, Left called Wayfair the "most mispriced" stock.

In an unpublished report obtained by Real Money, Left highlights that Wayfair's accounts payable (AP) constitute 50% of its total assets. The accounts payable exceed 10% of the company's revenue and are more than its cash on hand by $100 million.

"It's half their balance sheet and $100 million greater than their rapidly burning cash pile, but W never once mentions AP in the 10-K financial statement footnotes," Left noted in the report.

Still, the accounts payable problems aren't the least of the company's woes, he said.

For Left, Wayfair's free cash flow is an "illusion." He said growth in accounts payable and accrued liabilities in 2016 increased the company's operating cash flow, but had they not grown, the operating cash flow would be negative.

"As Wayfair's revenue growth slows, I would expect the trend in accounts payable and accrued liabilities growth will reverse, hurting their operating cash flow trends," according to the report.

As of February 2017, Wayfair's unique visitors from mobile U.S. internet fell by just under 1%, the first year-over-year decline in that category for at least a year. The company's unique U.S. visitors, using both desktop and mobile devices, has fallen 11.4% year over year to 16.9 million. For unique global desktop users, traffic has dropped nearly 8%.

Though Wayfair's principal business is selling furniture, customers never get to test it out in a showroom. Wayfair competes with companies including Restoration Hardware(RH) - Get Report , whose online sales make up approximately 45% of net revenues. And, Amazon's revamped platform will provide a familiar place for consumers to shop. 

Another part of Wayfair's business is selling home goods including appliances and kitchen supplies, forcing it into direct competition against retail giants Amazon, Walmart (WMT) - Get Reportand Target(TGT) - Get Report  -- all of which focus on offering the lowest prices.

Perhaps more concerning, especially for shareholders, is Wayfair's manual internal controls.

The company says, "Our testing, or the subsequent testing by our independent public accounting firm, may reveal deficiencies in our internal control over financial reporting that are deemed to be material weakness ... we currently rely on manual process in some areas, which increases our exposure to human error or intervention in reporting our financial results."

Considering that Wayfair has over 10,000 suppliers and millions of stock keeping units (SKUs), it's curious that a retailer of that size uses manual control where errors can be introduced. SKUs all have bar codes that are used to track sales and inventory.

By way of comparison, Left noted that convicted Ponzi schemer Bernard Madoff had a manual process of internal controls by which he personally "examined the process by which all trading is supervised." The manual controls also invokes the memory of discount electronics retail chain Crazy Eddie, which was brought down by fraud. There, daily sales reports were prepared manually by each salesperson, according to the inital public offering prospectus

Calls to multiple media relations contacts at Wayfair as well as emails went unanswered by the time of publication.

Left says he is still short Wayfair stock (he is also still long on Restoration Hardware). According to Bloomberg data as of March 31, 36% of all Wayfair shares are available for short-sellers.

Separately, Wedbush analyst Seth Basham noted last Wednesday that Wayfair is a takeover target with a "number of potential acquirers." Basham sees Bed Bath & Beyond(BBBY) - Get Report  -- likely with new equity -- Target, Walmart, Home Depot(HD) - Get Report , Lowe's(LOW) - Get Report , Amazon and Steinhoff as possible acquirers.

This story has been updated to include Amazon's plans to revamp its furniture marketplace.

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