Imported furniture seems to be extremely profitable but the cost is too high

    A piece of 'foreign' furniture with an ex-factory price of 10,000 yuan is sold for 40,000 yuan in China. Is there any price moisture between them? It is understood that taxes, transportation, rent, and labor costs account for 60% of the price of imported furniture .

Insiders in the furniture industry say that imported furniture with high price moisture is not without it. But the rent, transportation, labor costs soared, the price of most of the furniture products are 2,3 times higher than the ex-factory price is evidence-based.



Four major levels of furniture imports into "magic"

" Even if the imported furniture sells for 1 million yuan , it is very likely that there will be no domestic furniture that sells for tens of thousands of yuan to make money." Facing the "great profits" of imported furniture, Mr. Chen, who has been representing a European furniture brand for many years, hopes to use an example answer. Mr. Chen bluntly, now do the additional cost of imported furniture is very high.

Take a set of furniture that they sell for 1 million yuan, for example, to remove about 15% of the cost of taking goods, and taxes, transportation, rent, and labor costs account for almost 60%. What was supposed to be 25% of the profit will also be consumed in the process of "waiting for sales". If this piece of furniture was sold for half a year, it would hardly make any money.

For current import furniture manufacturers, the four major levels of "taxation, transportation, rent and labor cost" have almost become a "magic spell", which is a decisive factor that affects the final price of furniture.

Imported furniture dealer said that every time they purchase at least 20% of the value-added tax must be paid (17% of furniture VAT and shipping costs of around 3% VAT); rapid growth in recent years, domestic rents, may account for the price of 30%; and domestic and foreign freight and labor costs will probably account for about 15%. Therefore, the cost of imported furniture nowadays wants to enter China, and the cost is basically not low.



Furniture designers can make huge sums of money

     For a piece of furniture priced at 100,000 yuan, 30,000 yuan may belong to the designer. A villa designer, who asked not to be named, once told the author that if they help some high-end imported furniture brands succeed, they can get more than 30% of the “hard work”. In this regard, most people in the industry said that the "commission" for designers is equivalent to the "promotion fee", which is universal in the world. Because some hundreds of thousands of furniture, even millions, cannot be sold in the store alone. And after a good designer targeted "recommendation" to high-end consumers, the success rate of sales doubled.

    Should this "hidden cost" also be paid by consumers? Zhou Wei, a domestic distributor of DUX mattresses in Sweden, said that not necessarily, different businesses have different practices. They usually do not return cash directly to the designer, nor do they make consumers bear this part of the cost. Rather, it takes a 40% discount when the designer buys the product, so as to "promote" it in disguise. Of course, only designers who have been approved by them have this "treatment", and each designer has only two opportunities to buy 40% off products.



Imported furniture prices rise due to instability

Germany's Willer's upholstered furniture has been fine-tuned at the end of last year. After the price of the Swedish DUX mattress was increased by 10% -20% at the beginning of this year, it will be adjusted by 5% -10% in the middle of the year due to the product line upgrade ... It is not difficult for attentive consumers to find that most imported furniture is subject to price adjustments 1-2 times a year, and such "price adjustments" are caused by certain unstable factors.

And will the "additional cost" generated by the manufacturer fine-tune the price every year, will the merchant also include the final selling price to allow consumers to pay?

   Insiders in the furniture industry say that this is usually left to the agents themselves. Lu Huanying, president of Marburg Wallpaper China, also said that many high-end wallpaper and fabric brands such as Marburg, AGENA, JAKOB SCHLAEPFER, etc., which he represents, will also fine-tune the price from time to time. Usually, they will determine the domestic selling price according to the price adjustment of the manufacturer Whether it will increase, if the manufacturers do not increase much, and the domestic prices will remain basically unchanged, Marburg wallpaper has not increased prices in the past 2 years. Zhou Wei, a domestic agent of DUX mattresses, said that they would not include the increase in the price in advance, and that they would only adjust the price if the manufacturer increased the price;

In addition, the frequency and frequency of price adjustments made by foreign factories each year are related to their brand awareness, raw material prices and product update rate, which are normal price adjustments. However, whether the price for the agent is adjusted according to the above fluctuations, sometimes depends on the "actual situation" and "mood" of the manufacturer.

In general, some “little” domestic agents will increase the price of their products by about 10% in order to avoid the inconvenience caused by the annual increase in factory prices, but there are few experienced agents. Incorporate this part of the cost into the terminal price of the product. Because, one of their most important jobs each year is to engage in a game of "price increase or not" with foreign factories. If the game is successful, there will be no price increase of about 8% that year. If the current sales of 40,000 yuan in the country's products are calculated, consumers will be able to pay 3200 yuan less.

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