Markup on solid wood case goods?

suz_naturalJanuary 24, 2009

I've been told that markup on furniture is quite high. Does anyone have any idea what the markup would be on Canadian-made solid wood bedroom furniture? Thanks in advance for any insight.

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bobismyuncle

I don't think there's a rule of thumb. You can find the same piece at different places for different amounts. The dealer has to make a profit after covering commissions, warehousing, shipping, advertising, damaged goods, delivery, preparation work, customer service and store overhead. If they don't make a profit, then that's why so many places have gone out of business. I get calls regularly that start, "I bought a piece from [insert name here] and now that they are out of business I need to find someone to repair it."

    Bookmark   January 24, 2009 at 4:14PM
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suz_natural

Thanks for the reply, Bob. I was wondering because I have no clue how much negotiation leeway I have. Salespeople have told me that they can offer me a "good" price. One offered a 10% discount. Is that a good deal? I don't know. I'm not begrudging the store its profit and I do understand that quality costs.

    Bookmark   January 24, 2009 at 8:35PM
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bobismyuncle

I think for a couple of lines that one of my clients carries, the MSRP is 200% markup. Markup is to cover the list of items above. But then they offer everything at the everyday price of 40% off MSRP (80% markup, if you need help with math). So your 10% off at a store that lists at MSRP is not as good as every day price at 40% off. If a piece has been sitting around for a while or is part of a line that is being discontinued (either by them or mfr.), they will try to clear it for about what they have in it. But I'm not really in the pricing area, so this is just from the things I've overheard in the back room.

    Bookmark   January 25, 2009 at 1:31PM
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suz_natural

Thanks. I think I need to shop around a bit more to get a better fell of the prices.

    Bookmark   January 26, 2009 at 2:47AM
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suz_natural

That should have read "feel for the prices."

    Bookmark   January 26, 2009 at 5:43AM
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mogator88

10% doesn't sound to you like a lot. However, that discount comes entirely out of his/her profits. So you are "only" saving 10% but its costing the store 30% of its profit, with out even considering overhead.

Because furniture stores have incredibly high overhead, its safe for a store to deep discount here and there, but when it becomes habit then there isn't enough left to cover the expenses.

Yes some stores mark up high in order to negotiate, but you generally find those stores in urban areas with many first- and second-generation immigrants from less developed countries where haggling is deeply ingrained in the culture and has taken root among the general population.

The best way to know if you're getting a fair price is to do a little shopping and ask reasonable questions.

Also, floor samples and slow moving merchandise will be deeply discounted to make room for new products that might sell better. So ask for those items as well.

    Bookmark   January 28, 2009 at 5:21PM
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