Anyone know anything about retail furniture sales?

I have a friend who has had some success developing a customer base for furniture sales. She has been buying one-at-a-time stuff and reselling. 
 

It's time for her to step up to a bigger scale, and she has invited me to partner with her. She will handle the retail customer side, I will invest cash and time, and handle the acquisition, transport, and inventory. 
 

The idea is that we establish a relationship with a manufacturer/ wholesaler (probably in NC or TX), buy a trailer load of stuff, put it in storage, and use it to stock her store.  She can't keep enough in inventory to keep up with her sales.

I need to learn a little about how to establish a relationship with a vendor manufacturer.

Any thoughts?

I'd think the best way would be just stop in. In person. It's hard to establish any type of relationship over the phone/email/etc. I'd bet if you stopped in and said "I'm looking to buy a few trailer loads a year and not sure who to talk to" you'd get pointed to the right person vs a "I'll have someone call you back"

In reply to Steve_Jones :

That's true, but I don't even have any leads on some of the companies. 

Furniture is usually made overseas. If it is domestic it is more expensive and therefor the potential customer base is much smaller. Also, furniture is like clothing and can go out of style in which case if you overstock it might be tough to move. Also also, it sounds like you have all the skin in the game. If your proposed partner really thinks she has a solid idea she should be investing in the shipment. As they say, lending money to a friend results in losing both the money and the friend.

Sounds like a cool opportunity for you! Does she have a website you could share? I'm interested in checking out what she has offered to date.

The factory I buy from wants money up front and a purchase order before they manufacture anything and there is a three month lead time. If they want your business and your credit is good they may give you terms. The best thing to do is to book a meeting and hash everything out. Dont be afraid to let them know you are talking to other manufacturers.

My wife could be a decorator- I hate being dragged to those stores.  The smaller family ones by us are okay but the big chains are crazy to visit.  

You need to figure out your customer base. A lot of the larger folks run a lot of payment deals - you gotta know that game too.  

I've found furniture sales people worse than used car salesman. Our house, we have some fairly nice furniture. All purchased online and delivered and placed where we asked. 

Probably $6k between the dining set and a couch. 

No desire to deal with someone in person. Just my personal experience after trying mulitple times to deal with the sales people. 

If the the dimensions, pictures, and prices are online, what's the value add? Sure what it feels like to sit on, but that doesn't tell us how the cushions or fabric hold up after 3, 5, 7, years.

Just giving you the opposite side. 

In reply to Datsun310Guy :

Yup. I'm trying to learn the game. 

SV reX said:

In reply to Steve_Jones :

That's true, but I don't even have any leads on some of the companies. 

Gotcha, since you mentioned NC, I figured you did as a lot of furniture is made there. A quick search of NC furniture manufacturer shows a bunch, road trip?

I'm just here to mention lead times. I tried to order a chair several months ago. It was a chair that was not stocked. Lead times were stated as the end of 2023 or early 2024 unless you wanted their mass-market products. 

If she is concentrating on products that are one-off or custom, prepare to wait. 

SV reX said:

It's time for her to step up to a bigger scale, and she has invited me to partner with her. She will handle the retail customer side, I will invest cash and time, and handle the acquisition, transport, and inventory. 

Any thoughts?

Sounds to me like she wants you to be the bank.  I suggest she talks to a bank.  I see nowhere that there would be a chance for your value add.

Acquisition:  Would you be selecting the furniture or just picking it up?  There is an admitted lack of familiarity to the market which makes for a steep learning curve to what will sell to the target market.

Transport:  Is your time playing truck driver going to net you what you are worth per hour?  If so, just do that full time and roll the cash holding a bunch of furniture into an F650 box truck that will actually make you money.  My bros here in Milwaukee doing box truck local deliveries are driving McLarens and Lambos and Vipers on their days off.  Good time to be in the freight biz.

Inventory:  I wouldnt want to hold dozens of dollars of something I have no idea how to sell on my own.  If I had a bunch of spare cash taking up space in my sock drawer I would just pop it into a CD for safety or some sort of index fund for risk.  At least thats still relatively liquid and not gonna get auctioned off for pennies on the dollar in a bankruptcy sale in 18 months.  

At $20+ an hour plus benefits the Levin warehouse by me can't keep workers. 

Furniture stores almost match mattress stores in number as well. 

Scaling that business could be much harder than many others. 

I would start by registering to go to their trade show in April. 

In the meantime, get online and look for companies you want to talk to, go to their websites, and see if there is a phone number to call. I bet there is. 

Just doing a google maps search for "furniture manufacturer", this was the first place I clicked: 

bearmtnmartin (Forum Supporter) said:

Furniture is usually made overseas. If it is domestic it is more expensive and therefor the potential customer base is much smaller. 

I've found that furniture is actually quite easy to find made in USA. It is heavy and bulky, it isn't the cheapest to ship across seas. 

Above is good suggestion. I was going to say just go to the Hickory Furniture Mart in Hickory, NC and start talking. Lots of small custom places that might be interested in a distributor that would buy a truck at a time. 

We bought a pricey (in my eyes) couch last November and they wanted $150 to deliver it but my upbringing taught me to complain and get annoyed.  I have a truck and the wife asks if I want to move it myself and save money.  

No, I'm too old - pay the man so they cut it down to $75.  I just can't move it by myself so I moved the old one to the curb.  

There is definitely profit in custom made furniture. My folks live in Amish country OH. They had a custom Murphy bed/ desk made out of solid cherry. They waited about three months and picked it up locally. Paid about $2500 five years ago. 

"Amish built" store opened in Alpharetta GA and the same Murphy bed in queen/cherry is listed for $14k. I almost fell out of my chair. 

It sounds like this business will need to be scaleable to make the partnership work.  How many open orders and potential customers does she expect?  How much is she making now, are the margins good enough to give you a return?  What would a bank charge her in interest, does this return make sense for you?   How long would it take to turn a container load of product?  That is how long you will have to wait for a return.  

Right now I am getting 4.7% on 1-2 year CDs, FDIC safe.  I think banks are probably charging twice that for small business loans, maybe more for a startup.  I know markups on furniture can be high but if she is getting sales via low pricing maybe the volume will not be there when prices go up due to costs.  

Good luck, but be careful.  

How about just cherry picking the nicest stuff from estate sales in upscale areas and placing them on consignment?

You never own the furniture.

You set the sale price so that it'll likely move pretty quickly.

Also, offer rental for home stagging. 

In reply to porschenut :

Tell me more about these 4.7% CDs

In reply to SV reX :

https://accounts.bestrates.com/cds?

Amex is 4.5%

Capital 1 is 5%

I don't know anything about furniture, but reading your posts I'm curious what your competitive advantage is. If it's not huge resources or huge knowledge, it's likely huge work ethic meaning a willingness to work harder for less than the other furniture companies. That's not a super promising investment strategy IMHO.

*For the record I'm not knocking a strong work ethic, and I'd have a different opinion if you were a young person who'd always dreamed of running a furniture company. 

I have no interest in custom furniture, or in manufacturing. 
 

Thanks for the carious cautions, but this is not a passive investment per se on my part. It's a legit partnership I would be engaged in. She's a friend, and I would be working alongside her (part time). A retirement business. 
 

The estate sale idea is closest to what she currently does. She finds bargains and resells them. But the Hickory NC  idea is closer to what it needs to be. 
 

She offers a wide range of things, but definitely does best with furniture. She needs to focus on that. She's got the traffic. It's pretty clear the customers would support an increase of 8X- 10X in volume. 

In reply to Tom Suddard :

That's fair. 

When we talk about things like "scalability" and "competitive advantage" it sounds like a particularly male-centric approach to problem solving. Like we have to "win" at something. 
 

This is less about "winning at something" then about "living with something". A collaborative approach. It's one piece of a lifestyle, not a business venture that has to "win".

Picture it like mining for bitcoin.  It doesn't have to create vast amounts of wealth if it's sitting in the background chugging away that you have to spend time learning and improving now and then.