Furniture Pricing Explained

There are a lot of misconception about furniture prices. This article  explains all the common terms and what to expect when it comes to pricing furniture. After all, knowledge is power. An informed consumer is a better customer.

1) There is no such thing as "wholesale pricing" to the public. Wholesale prices are designed for selling in bulk from the manufacturers to the dealers. In order to get wholesale pricing, a dealer must commit to a certain opening order and/or maintain a minimum amount of orders per year. In addition, the dealers are also require to keep stock and inventory. The word "wholesale" is often misused, but when it is used to advertise to the public, it usually means that the prices are discounted from retail, not the actual manufacturer cost to the stores.

2) The same misconception also applies to "factory-direct" pricing. More often that not, this means the goods are shipped directly from the manufacturer to the consumers, i.e., drop ship.  But that doesn't mean you actually get the "factory cost".   It might mean that you get some discount resulting from freight saving.

3) All retail prices are the same. No. Retail prices are usually what the individual stores mark up from their cost and can vary. The only form of retail price that is consistent is MRSP (manufacturer suggested retail price).

1) The more higher end the manufacturer, the more tightly-controlled their pricing structure is. Most upscale manufacturers require their dealers to maintain a minimum retail price. This applies to online dealers more so than local dealers. Local stores usually has more flexibility in their pricing.

2) Most furniture manufacturers DO not like their products sold on the Internet. It's one of the most outdated industry on earth and they have not adapted to the new information age yet. But more so, most dealers invested heavily in inventory and the manufacturers want to protect their dealers from unfair competition. Some manufacturers are easier than others, but generally, the more expensive the brand, the less you will find discounted sources for them online.

3) If you can get 40-50% off MSRP, it's pretty good. The dealer usually has to maintain at least this pricing level in order to make any profit at all. Furniture is a very expensive business to maintain. In addition to the inventory cost, there are inbound freight cost (very expensive for furniture), finishing, advertising, rent, employees--all of which makes it a low-margin business.