Monday, July 4, 2016

Importing furniture

The present market scenario in the world is furniture designs in large numbers are manufactured in China. Two factors are responsible for this shift. The manufacturing capability in China is staggering. They have developed CNC router manufacturing capacity that is astounding. Their machines are cheaper and the quality of machines is robust. Labor is low cost in China. Wood is imported into China and in no time finished goods are ready to be shipped.

Cost of imported furniture
The cost is made up of the following components.
·         Factory price of furniture in China.
·         Cost of container
·         Packaging
·         Importing fees
·         Warehousing
·         Tradeshows that include catalogues, advertising

Pricing consists of the following
·         Factory price
·         30 % markup for logistics
·         35% for wholesale mark ups
·         250% retail mark up

Example: Factory price is $100+ 30% logistics = $ 130 cost for wholesaler + wholesaler markup of 35% equals $175. The retail price will be two and half times this price that equals $450. A side table that costs $100 to make in China will eventually be sold in a Furniture Now store in America for around $450. (Pricing gathered from Furniture Now reviews pages) The question that arises is can the table be manufactured in America for less than $450 that includes profits to the manufacturer, wholesaler and retailer?
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