Explaining the "dark screen" of profits in the furniture industry

In the year of this price inflation, what price does not rise? The price of furniture, of course, is getting higher and higher, and the astronomical furniture is endless. There is a lot of competition. In 2014, the transaction volume of new and second-hand housing (property, agency, and renting) in the multi-city real estate market decreased. Affected by this, the home market has gradually become “cold”—household consumer demand has narrowed, and the furniture market has become more competitive. , Home improvement building materials business experience is particularly evident.

Consumers reluctantly bought expensive furniture and felt that most of the money went into the manufacturer's pocket. The huge profits in the furniture industry seemed self-evident. However, furniture companies and distributors are always talking about them hardly making money. They are simply not profitable. This is a very strange phenomenon. What is the reason? What is the cost structure of the furniture industry? How about the cost of a furniture product? How much is the profit of the furniture? This article ** tells you!

180 million mahogany furniture unveiled in Foshan to refresh the world’s most expensive mahogany furniture records

At the 8th Redwood Furniture Art Fair held in Shunde Furniture City, Foshan, Guangdong, a group of mahogany furniture valued at RMB 180 million attracted the attention of many exhibitors. The group of mahogany sofas is named "Golden Age" and consists of 30 sets, each of which is a couch, 4 short sofas, 4 coffee tables, etc. The weight exceeds 3 tons. The set of mahogany sofas has set a record for the world's most expensive mahogany furniture.

Do Royal Kitchen cabinets require 400,000 "astronomical prices" equal to "high-end"?

Such a set of high-end cabinets is painted with a piano paint called “Benz painting” on the outside. All the function control switches are set on a smart board that is flush with the line of sight. This height just happens to be able to avoid children’s accidental touch. Through the touch of fingertips, all devices, such as kitchen appliances, computers, and audio equipment, are operated and controlled. Sales staff said that "such cabinets can make people's social behavior and family communication smoothly in the kitchen." Excluding embedded appliances, the price of the whole set of cabinets is 400,000 yuan.

Yichang is currently 138,000 yuan price mattress called "Obama is sleeping this"

In Yichang, a home furnishing store brand showroom, the hall is placed on the middle of the bed with "tall" mattress, next to the billboards, is a striking price tag: RMB 138,800 yuan. The salesperson introduced: "This is a high-end mattress imported from the United States. This brand has been the world's number one sales for many years. President Obama is the one that sleeps." The marketing costs of pan-home companies include logistics costs and store rental costs. , labor costs, advertising promotions, etc. Due to the existence of inflation rate, the marketing cost of China's pan-home companies is increasing. Including the continuous increase in store rentals, resulting in the dealer's profits have been compressed, especially the high rents of some high-end stores, making many dealers daunting.

Data: Furniture profits are much lower than other industries

According to the statistical data of the State Administration of Taxation corporate income tax source report, six provinces and cities with different degrees of economic development in Shanxi, Shandong, Guangdong, Heilongjiang, Chongqing and Gansu were selected to measure the average profitability of various industries, among which the entertainment industry had the highest profits. From the point of view of furniture brand companies, gross profit of 30%-50% is relatively normal in the industry. However, the gross profit does not mean that the profits are rich. The average profit rate of the furniture industry is only 3%, and the status quo is worrying.

Inquiry: Why is the price of furniture not high profit?

Furniture is resistant to consumer products, long life cycle. After the average family buys furniture home, they can continue to use it for decades. Therefore, there are few opportunities for repurchasing, and there is no such thing as “returning customers” like the apparel industry or other industries. The 2013 annual prosperity index of building materials furniture shows that the cumulative sales of furniture and building materials stores above designated size in China reached 1,248.1 billion yuan, an increase of 0.11% year-on-year. However, there is no increase in profits, and even decline, because other channels have weakened the influence of the stores, and the profit growth rate is not large enough. At the same time, the surplus of building materials furniture stores has greatly increased the cost of the furniture industry.