I've never seen anything like it. Suppliers are calling me begging for orders as they've never done before. Even new vendors are calling, ones I've never had any business dealings with before. I mostly expected this, as backlogs have wound down and many find themselves with nothing to build, and no orders on the fax machine. I think we're going to start seeing some suppliers in trouble next (first were the retail stores).
Smart suppliers are reacting to the poor economy by holding the line on pricing, offering promotions and reducing inventory of parts on hand. Some of the not-so-smart ones are continuing to do business just like they did in the 90's and they're not receptive to new ideas. One cannot be stagnant, either in the supplier or the retail end of things. Run lean, but run smart.
What I'm seeing at the consumer level is very slow sales in case goods such as dressers, beds, tables and chairs. Upholstery sales are smoking hot however - especially leather - and I think what is happening is many people have decided to save a bit of money and stay home. And if they're staying home, they're getting a High Def Flat Panel TV and a comfortable sofa and/or recliners to watch it from.
There is also a definite move away from junk furniture, the low end of the market. Younger buyers who used to operate from the theory of "I get tired of it and want something new in five or six years" have figured out that cheap furniture they planned on tossing on later on really isn't holding up or performing very well in years 1, 2 and 3. Also, there is a huge backlash against Made in China furniture (and with good reason). Customers don't want it any more, whether because of the quality issue or the fact that they want to support made in USA products. I find almost everyone that walks into my place asks that question right away.
2009 is going to be an interesting business year. Those stores and suppliers that weather the downturn will be well-positioned when business comes back, as it surely will and probably with a huge, pent-up demand when it does.
Duane Collie
Straight answers from thirty-six years in the business.
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Duane, Those among us that are in the market..... do you believe we will have the opportunity to see any new promotions with some of the manufacturers? Where I live there is little to no opportunity for retail inventory reductions in quality leather. I found one H &M sofa in the 3 high end stores I visited in OKC. I would love to see promotions. should we be patient?
Debbi, I think you'll find for the most part that savvy suppliers are trying to hold the line on price increases right now. Promotions cost money to run, so they're looking for stores to buy stock and then run something in-house on a local level. I'd say your best bargains are probably to be had right now, as surely when business returns there will be a slew of price increases that have been artificially held back.
Check your local stores for floor inventory as well. With a general slowdown in buying, stores will want to move their floor inventory moreso than taking new order to not only free up store cash, but to keep their stock levels fresh.
Duane Collie
Straight answers from thirty-six years in the business.
My Private Messages are Disabled - Please ask questions here in the forum.
Duane, do you have suggestions of stores that would have floor stock in H&M or BY, etc that might ship? I guess that would be an issue if it not still crated. Like I stated, I am having trouble here in Okla finding sofas. I just want to sit on a model similar to one I want. heck at this point I am going to order one without knowing how it sits--I will just guess.
What you'll be up against is the shipping issue, Debbi. The whole American furniture industry is geared to ship new product out of North Carolina, like spokes on a wheel. Its all outbound movement. When you get a piece in a store (at then end of the spoke) and try to ship it without the factory packaging, the shipping costs can easily negate any savings. Typically if you were to take a piece from say, Ohio and ship it to Oklahoma on a blanket wrap carrier, you're looking at $ 400 and up. Whereas if you take that same sofa brand new and drop ship from the factory to you it will be about half that price on freight.
For buying floor models its going to pretty much going to have to be either local, or you travel out to get it and haul it home yourself. But then you have the sales tax issues if you buy out-of-state and take delivery to haul it yourself....you have to pay that sales tax.
I don't know any of the stores that would be local to you, sorry.
Duane Collie
Straight answers from thirty-six years in the business.
My Private Messages are Disabled - Please ask questions here in the forum.
Americans have spend too much for too long for things they could not afford in the first place, and now they want a bailout from the rest of us. What happened to saving up and paying cash for something you want? I have been to a few furniture stores while on vacation and most of what I saw was pure crap. I won't buy it. I think a better solution is to go to auctions and such and buy used.
I've noticed something interesting taking place lately. Even though the evening news is all doom and gloom, my business is actually very brisk right now, and so are the small businesses of many of my friends in different industries. I'm not sure if I can explain why, but a common thread seems to be stability, confidence, good prices, and superior product. Perhaps its because so many businesses have failed that there are fewer healthy ones to service the market?
For example, I have a good friend that runs a large Day Care Business. He was almost wiped out from parents withdrawing their kids in Sept/Oct/Nov and was wondering if he could survive. I'd say make your cutbacks - severe if necessary, but stay the course - DO NOT CLOSE UP. He did, and now he has seen a major re-enrollment in January - February, enough new kids brought in that he's effectively weathered the storm. I think the grandparents got tired of watching the kids!
I'm actually busy enough in my store that I'm considering hiring some help to assist me. The orders keep rolling in when everything in the newspaper says they shouldn't be, and floor stock keeps coming and going. Perhaps most people are tired of being scared and decided to get back to normalcy somewhat? Not really sure, but I'm glad its busy!
Duane Collie
Straight answers from thirty-six years in the business.
My Private Messages are Disabled - Please ask questions here in the forum.