How To Start a Furniture Business | Everything You Should Know

This is a complete guide about the furniture business and how to start a furniture business from zero.

The guide is divided into 7 parts, market research, the earlier stage product selection, cost calculations, business model selection, and then wholesale furniture channels and some practical tips on running a furniture business.

1. Do the Market Research

To succeed in the furniture business, we must offer the products that the market wants. Therefore, doing research and identifying market requirements is the most essential step for your furniture business.

1.1 Local Furniture Markets

Local Furniture Markets

The local furniture market usually represents local retail demand. If there is a furniture store nearby, then it would be wise to visit it.

When you’re in a furniture store, pay attention to the categories that are often found in furniture showrooms, and even ask around for the best-selling furniture designs if you can.

By doing so, you will learn about your local customer group and their consuming habits, as well as some of the precise directions you can seek for your furniture business.

1.2 Best Selling List of Online Market

Checking the best-seller lists and other sales data from online furniture stores is the most direct and effective way to gather information on general furniture market trends.

This is also one of the easiest ways. Most retail or wholesale websites have a best-seller list in each category, such as Amazon’s best-selling furniture page, and all you have to do is click to view.

1.3 Social Media Platforms(INS, Pinterest, Tiktok)

People like to share amazing furniture designs on the Internet, and many leading furniture manufacturers like to post concept drawings or videos on social media platforms before officially launching new products.

If you see a furniture image or video become popular on a social media platform like Instagram, Pinterest or Tiktok, you’ll find it on Amazon within a few months.

Therefore, keeping an eye on the latest social media trends will help you stay up to date with what’s happening in the furniture industry and what designers are thinking.

Here is some additional information we have recently posted related to furniture bussiness, you can try browsing the following articles to get some inspiration.

Top 10 Furniture Manufacturers in China: Full List & Top Picks

Top 10 Sofa Manufacturers in China: Full List & Top Picks

How to Import Furniture from China: The Best Guide

2. What to Sell? Selecting the Right Furniture to Sell

Selecting the Right Furniture to Sell

This is the most important part. If you want to start a furniture business from scratch, the product selection process is very important.

There are many strategies online for choosing profitable products, and in this article I will list the most practical and important strategies that apply to different groups of sellers based on my furniture sourcing experience.

2.1 Furniture with High Market Demand

For the earliest stages of your business, a furniture product that can consistently generate cash flow may be a good choice.

Since steady growth is ideal for new furniture stores, you don’t have to risk trying anything too trendy or new. For your cash flow, you should try to find your first batch of furniture in the commonly seen furniture niches.

2.2 Furniture Without Over-saturation Competitiveness

For most new sellers, resources are relatively limited, so it’s not wise to compete with the big sellers in a saturated furniture niche.

A simple trick to identify if a furniture niche is oversaturated is to check the search volume and advertising price for keywords in that niche; the higher the value of these two, the more competitive the furniture niche is. Or you can simply search for a product on Amazon and if there are too many results and more than 1,000 reviews, that product may not be the best choice for you to start a furniture business.

2.3 Furniture With a Profit Margin Above 50%

When calculating the profit margin for your furniture business, you must consider all costs that may be incurred in the sales process. Make sure there is still money left when including all costs (from purchase costs to shipping to advertising and any platform service fees) in your profit margin. Normally, for furniture retail businesses, a 50% profit margin is a relatively reasonable target.

2.4Furniture Suitable for Projects

Project furniture will bring considerable profits because of the large quantity of orders. For the different applications, the customer’s requirements for furniture are also different.

For example, villa projects will require sofas, dining tables, coffee tables, kitchen cabinets, beds and mattresses; Office projects will require office desks, office chairs, filing cabinets, executive tables and conference tables; Hotel projects and restaurant projects also require different kinds of furniture.

2.5 Furniture Free of Infringe

Many furniture sellers have encountered this problem, especially when they import from overseas. For furniture infringement, there are two common situations.

The first situation is that the furniture you purchase infringes on a big furniture brand existing in your country in terms of design, logo, etc. The other one is that you have purchased some original furniture from overseas, and other buyers have registered patents for the furniture in your country.

If you are accused of infringement, great losses will be caused to your furniture business. To avoid any accidental infringement, you should check whether the product is registered with any trademark or any patent before placing an order. For example, if you are importing furniture into the United States, you can check the patents and trademarks on the Patent and Trademark Office’s website.

An interesting thing is that many buyers import imitations of Italian brands furniture from Foshan, China, who cleverly make small changes on appearance, and do not make brand identity. In this way, it is easy to avoid infringement charges.

3. How to Start Selling Furniture?

The first thing you need to consider is where to sell your furniture, online or offline?

This is because product positioning, pricing, and marketing strategies also vary depending on the distribution channel. Your furniture business budget will fluctuate depending on different sales models.

Of course, if you have enough funds, it is recommended to do both online and offline.

3.1 Open a Furniture Store

Furniture Store

Open a furniture store and show your furniture products directly to customers, more likely to reach a deal.

The furniture store is best opened in a location that is in a commercial and high traffic area. Imagine that a furniture store opens in a location where people will never drive by, and then even the most luxurious decoration would be a waste.

It is also important to consider your furniture product category. Choose a location that is large enough to display your furniture products.

For local deliveries, many furniture store owners own at least one delivery truck. While renting is also an option, branding your delivery truck with store ads can help you with your marketing efforts on the road.

3.2 Open a Furniture Online Store

You will find many platforms available for you to sell on if you search online. You can create furniture stores on Amazon or Wayfair. If you don’t want to use these marketplaces, you can also create your own furniture online store on Google.

If you have a furniture store on a B2C e-commerce platform such as Amazon or Wayfair, then everything is already preset and optimized for you – store templates, and listing templates. Therefore, you don’t have to worry about store design. In addition, you will automatically be involved in their marketing campaigns and your furniture will be promoted.

I normally do not recommend starting a furniture business through a separate website. B2C platforms will bring you a huge amount of traffic, whereas if you build a separate website, you have to invest a lot of money early on to direct traffic to your furniture store.

The worst thing is that if you don’t optimize your separate website properly, you could be investing a lot of money but not making a profit.

4. How Much Does It Cost to Start a Furniture Business?

When calculating the cost of starting a furniture business, you have to cover many types of costs. And I will start here with a quick list about the specific types of costs that can be incurred in the sales process, and then we will get to them one by on.

4.1 Basic Costs of Starting a Furniture Business

In the early stages of the sales process, before starting your furniture business, the following basic costs and expenses may be incurred.

  • Purchase Cost of Furniture
  • Domestic Logistics Fee
  • Sea Freight
  • Customs Duty
  • Employee Salary

When you purchase furniture for resale, it will incur purchase costs, which will represent a considerable percentage of your total costs.

To transport the furniture to your warehouse, you must pay for the domestic logistics fee.

If your furniture is imported from another country, your costs will include sea freight and customs duties. Different furniture types have different duty rates. In addition, you may need to pay for some special certificates required for customs clearance according to local regulations.

For furniture companies, the cost of employee salary should be considered as well.

4.2 Cost of Selling Furniture in Brick-and-mortar Stores

If you operate a traditional brick-and-mortar furniture store, you should also pay the following costs.

  • Store rent cost
  • Utilities (water, electricity)
  • Store Decoration Costs
  • Warehouse rent cost
  • Warehouse maintenance fees

For brick-and-mortar furniture stores, rent and utilities are always at the top of the cost list. The amount of rent mainly depends on the location and size of your furniture store.

One of our clients in the USA spent over $20,000 in the first month, including $8,000 per month in rent, $2,000 in security deposits, utilities and other miscellaneous expenses.

In addition, you may need to spend more money to decorate your furniture store. In this process, decoration costs are incurred. But unlike the rents that go continuously, the decoration costs will be a one-time expense.

The cost of storage, including warehouse rent and maintenance fees, is another basic cost that the owner of the brick-and-mortar furniture store must bear.

4.3 Cost of Selling Furniture Online

Wayfair Furniture Online

While operating a traditional brick-and-mortar furniture store can still be profitable, more and more sellers are being attracted by the unique advantages of online retailing, and are beginning to plan for an online furniture business.

Over the past year, furniture sales for e-commerce giants such as Amazon and Wayfair rose 37% and 55%, respectively. Today, many consumers tend to buy furniture online rather than in brick-and-mortar stores. More and more furniture companies are focusing on online retail channels. It can be said that the Internet has really revolutionized the furniture retail industry.

If you plan to start an online furniture business on Amazon, Wayfair or another online marketplace, the following costs need to be considered.

  • Google advertising fee
  • Affiliate marketing fees
  • Amazon pay per click
  • Amazon FBA fees
  • Online store operation fee

If you are planning to open a furniture store online, you will need to invest in promotion in order to attract enough customers to your store. There are two common channels to promote your store: the first is advertising on Google, and the second is conducting affiliate marketing.

Running furniture business on platforms such as Amazon can save your effort of gaining customer volume. If you want more customers to visit your furniture store, you can purchase Amazon’s pay-per-click service, which will give you more opportunities to reach Amazon’s customer group.

Once the shipment is delivered to the FBA warehouse, you will need to pay additional FBA fees, which vary by furniture segment. The calculation of FBA fees is a bit complicated, but you can use the online FBA calculator to get an approximate amount of estimated FBA fees.

In addition, when your business grows to a certain size, you may need to invest more operating capital in your online store.

5. Write A Furniture Business Plan

Write A Furniture Business Plan

A good furniture business plan will guide you at every stage from start-up to managing your business. You will use your furniture business plan as a roadmap for how to build, operate and grow your new furniture business. This is a way to think about the key elements of the furniture business.

In addition, a furniture business plan can help you secure funding or bring in new business partners. The investors want to have confidence that they will see a return on their investment. Your furniture business plan is the tool you can use to convince people that working with you or investing in your company is a smart choice.

5.1 Executive Summary

Simply tell your audiences what your company is and why it will success. It includes a description of your company, your products or services, and basic information about your company’s management team, employees, and store locations.

5.2 Marketing Analysis

You need to have a good understanding of the future and target market of your furniture business. Competitor research will show you what other furniture companies are doing and what their strengths are. What do successful competitors do? Why are they successful? Can you do better? Now is the time to answer these questions.

5.3 Organization & Management

Tell your audiences how your company will be structured and who will run it. Describe the legal structure of your furniture business. Indicate whether you have formed or intend to form a general or limited partnership for your furniture business, or whether you are a sole proprietor or a limited liability company (LLC).

Use the organization chart to list who is responsible for what in your company. Describe how each person’s unique experience will contribute to the success of your business.

5.4 Marketing and Sales

Your marketing strategy should be constantly improving to meet the market demands. The goal of marketing is to describe how you will attract and maintain customers. You will also describe how the sale will actually occur. You will refer to this section later when making financial projections, so be sure to describe completely your marketing and sales strategy.

5.5 Financial Projections

Financial projections are the way to convince the reader that your business is stable and will be financially successful.

If your furniture business is already established, please include an income statement, balance sheet and cash flow statement for the past 3 to 5 years. If you have other collateral that can be pledged for a loan, please be sure to list it now.

Provide a prospective financial outlook for the next 5 years. Includes projected income statement, balance sheet, cash flow statement and capital expenditure budget. For the first year, be more specific and use quarterly, or even monthly, forecasts.

The most important thing that investors want to know is how much return they will get on their investment.

6. Where to Wholesale Furniture? Wholesale from Local Markets or Import from China

Where can I get wholesale furniture at competitive prices? Wholesale from local markets? Import directly from China? Indeed, the answer is different for different business volumes. Smaller companies need smaller MOQ and more designs to test the market, while large companies are more likely to seek lower costs to improve profit margins.

6.1 Wholesale Furniture from Local Markets

If you have been considering starting a furniture business but are inexperienced and afraid of stocking up, you may choose to wholesale furniture from a B2B website in your country or from a local wholesale marketplace.

Advantages of wholesale furniture from local:

  • Small MOQ, you can order a smaller quantity, but more designs.
  • Local wholesalers can deliver to your door.
  • No need to make the stock. Low investment cost

6.2 Importing Furniture From China

In the long run, reducing the purchase cost for the furniture business is the only way to win the market. In this case, Made in China is undoubtedly the most cost-effective option for you.

To wholesale furniture from China, you can visit furniture trade shows in China or go directly to the wholesale furniture market in Foshan. Of course, you don’t necessarily need to visit China to find suppliers by yourself, you can stay at home and search online for Chinese wholesale websites, or search Rix Sourcing to help you collect furniture designs and find suppliers.

6.2.1 Furniture Fairs in China

CIFF Furniture China 2022

CIFF, Canton Fair, Foshan Long Jiang Furniture Fair, Dongguan 1F Furniture Fair are the well-known furniture trade shows in China. You can visit these furniture fairs to find suppliers, and visit their factories to learn about the production process and product quality.

6.2.2 Foshan Furniture Market

Foshan furniture market is the largest furniture market and distribution center in China and even in the world. Most of the furniture factories in China set up their showrooms in the Foshan Furniture Market. Foshan furniture market consists of more than 10 large furniture malls, including the well-known markets such as Louvre exhibition center, Sunlink market, Empire Furniture Center.

6.2.3 Alibaba, Global Sources, Made In China

In fact, only a few Chinese furniture factories have set up independent websites on Google, but most of them have opened stores on Alibaba, and many trading companies that work with factories will open their own stores on Alibaba.

However, finding the right furniture supplier on Alibaba can be a difficult task. You need to compare prices, styles, materials, etc.

6.2.4 Rix Sourcing

Those who have experience importing from China all know this sourcing company. Unlike Alibaba, Rix Sourcing will help compare prices and quality with many furniture factories to provide you with the most competitive prices and lowest MOQ. Rix Sourcing will arrange a specialized team to track your orders, from product sourcing to shipping arrangements.

7. Six Practical Tips for Starting a Furniture Business

When I work as a furniture sourcing agent, I often come into contact with many furniture buyers and have learned some practical tips to share with new furniture sellers.

7.1 Furniture Factories Are Not Always The Best Partners

Even if you find a real furniture factory, if your order is not large enough, you will not be able to get their best quote. Secondly, because most furniture factories are focused on production, they are not familiar with the export process, and many times they need to export through professional export companies. Therefore you may encounter various problems such as product certification, customs clearance, and even language barriers when working with factories in the furniture import business.

7.2 Don’t Put All Your Eggs In One Basket

One of the most common mistakes that new sellers will make is to invest all their money in one product. You must know that the furniture business is constantly evolving, and that hot trends are changing daily. If all your money is on one hot furniture style at the moment, you’ll lose the ability to keep up with market trends. If the product is not selling well, you can only dispose all the goods at a low price.

7.3 Balancing Price And Quality

Low price definitely means low quality, never expect that you will be lucky to find a low price and good quality supplier. Because such a supplier does not exist. If you sell very cheap but poor quality furniture to your customers, they may feel cheated by you. In this case, all you get is a lot of complaints and a bad reputation.

7.4 Find Suppliers Who Are Communicative And Willing To Help You Solve Problems

When looking for a reliable supplier, you should consider responsiveness and cooperative attitude as the primary factors. Communication is always the key when it comes to problem solving. Because when quality problems happen, many bad furniture suppliers will just shirk their responsibilities.

7.5 Do Not Always Focus on the Lowest Price

Many new sellers are easily attracted by the low prices that suppliers offer. For example, Alibaba has a common scam: the supplier will give you a very low price in the beginning, and when you confirm the sample and decide to place an order for mass production, the supplier will try to raise the price with various excuses. Various reasons such as additional shipping costs, packaging costs or raw material price increases. Don’t be greedy for small bargains, and make sure you stay safe when you buy on Alibaba.

7.6 Make Sure Your Furniture Can Pass All The Necessary Certifications In Your Country

Before entering the mass production process, you should ask your country’s customs office about the mandatory product certification of your furniture. Once you have this information, you can ask your furniture supplier or hire a sourcing agent to ensure that all required certifications are in place.

Thank you for reading this article.

We are Rix Sourcing, a leading sourcing company in Foshan, China. If you are looking for sourcing agent in Foshan or Guangzhou, welcome to contact us. Our sourcing specialists have over 10 years experiences in the furniture industry. We will provide you with the most competitive wholesale prices. You can get a one-stop service from sourcing furniture suppliers to exporting containers.

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