How to choose the right furniture supplier and do supplier management

Why can't you find a reliable and suitable furniture supplier ? Have you ever suffered a huge loss because received bad products ? Have you received the wrong version of the product, how to manage furniture suppliers and bargain with furniture suppliers ?
With these questions in mind, we give some suggestions for choosing furniture suppliers and managing furniture factories.

Furniture factories management lohabour

For furniture middlemen or dealers, we all know how to maximize profits, which is to obtain the best products at the lowest cost. In order to earn the biggest difference. It is generally believed that the pure purchase cost control can ensure the maximum benefit. But you ignore the characteristics of standard reference objects and commodities.
Commodities are determined by price and value, can you buy a commodity worth 10USD at a price of 1USD ? To be honest, from the characteristics of the product, you can't. But this does not mean that you sell at 10 times the purchase price of 1USD. But this 10x value may be determined by your brand value, the services you provide. We call it commodity value added. For example, I can sell an ordinary item in a luxury store for 10 times the cost even more. But the price-added value of ordinary goods is determined by the luxury brand and service. But if the same product is sold in ordinary stores, it cannot be sold at 10 times the price, or people will think that it is not worth buying at such a price, and thus only evaluate the purchase price based on the quality attributes of the product itself.
But you may ask, what does this have to do with furniture supplier management and finding the right furniture supplier ? We return to the most conventional operation of middlemen and distributors in order to maximize profits, because when we purchase, we often ignore the evaluation of our own brand and service, and do not set any reference, and purchase at low cost will often lead to Affect the positioning of the product you want to sell in the future. Because for an ordinary brand, It does not have the embodiment of brand added value and service. And the price of the product is mostly determined by the quality. Because their subordinate buyers will also refer to the cost performance in many ways. While you are comparing, everyone is comparing. They all want to engage in speculative business and count on the final consumer to pay for the huge profits, do you think it is possible ?

Furniture manufacturers management lohabour

Let's take another example, you are now running a large chain furniture rental company, and you need to purchase some furniture products in bulk at one time. Now you have an immediate plan in your mind, you will find some furniture wholesale platforms such as Alibaba, Made in China, Global Sources or various Yellow Pages and chambers of commerce, send your needs in groups, and let suppliers quote. Then you pick some suppliers with moderate or lower prices, visit the factory, check the quality, and then decide who to place the order with. Is it right ? This is a priority for ordinary procurement and has zero cost. But what I want to tell you is that this approach is extremely risky. We have just explained a lot about the price and value of commodities, and why we need reference objects and positioning of our own brand commodities. You will foresee the situation that mass procurement demand will lead to. You are full of joy and hope that suppliers will fight with each other and make the price extremely low, and then you will buy at a low price to earn the maximum profit. But you ignore the positioning of your own brand on product quality. You think that as long as you visit the factory and confirm the samples, you can prevent the supplier from cheating on product quality, then I can only say that this buyer is too young. Because any supplier will never do business at a loss. If labor costs are average and equivalent, and the rent and management costs of factories in the same city are also similar, then the furniture supplier will only play tricks on product quality, lower prices layer by layer, or play tricks on labor costs. The labor cost of 10USD is reduced to 5USD, do you think the supplier will really care about your quality ? That is, superficially. And when you send out procurement requirements in groups, all competitors in the same market are quoting the same requirement, and everyone wants to get a share of the cake, so what will you do ? It is malicious competition, if your prices is lower than me, then what i will offer will be lower than you. In the end, the competition was bloody. In order to make a profit, the suppliers made false quotations, cut corners, used second-hand goods as good goods, and what's more, they closed down after taking the deposit. There is also a possibility that people in the same furniture circle know that you are posting in groups like this. Maybe in the end, everyone thinks that you are not sincere and will not give you an offer, or collude together to deal with you. And because the BOQ of your furniture project rarely mentions product specifications and parameters, there is also ample opportunity for suppliers to play tricks on it.

In the above situations, how to properly and reasonably find furniture suppliers and manage their furniture factory resources ? First of all, we must clearly define our own brand and business development, make product positioning, and set a reference. Purchasing personnel can go to some local furniture stores to understand the structure and materials of the products. If you are professional enough, you also need to know the cost of raw materials for the products in the target procurement market. For example, if you need to purchase a sofa, just list what kind of inner frame you need, whether it is miscellaneous wood or solid wood, and what kind of solid wood it is. If the fabric accounts for more than half of the total sofa cost, then the fabric price must also be the standard you need to determine, whether to use 5USD per meter of fabric or 10USD per meter of fabric. If you don't want to divide it so finely, you can do product market segmentation for the target procurement market. For example, in which cities in China are sofa production centers, what are their prices and quality, and why do they cause price differences. Which product quality is more suitable for your brand product development direction. Some buyer will reply, I don't care about the origin, only the price and quality. Doing so is blind and wastes a lot of time. It is also extremely troublesome to arrange shipment after the order is completed. There are also some purchasers who think that I can determine the quality of their products after seeing the samples and factories on site, so you think so good. In the furniture market, the sample display must be the best of the same model, otherwise how can it be called a sample ? Unless you buy this sample, put it away, and when you need to check the bulk products, take out this reference object and correspond one by one. Do you think this is likely to be the case for large items like furniture ? Especially for the goods you buy at a low price, the supplier must save on labor costs. In what way do you think suppliers will respond to the strict inspection requirements of purchasers ? They could have paid your buyer a commission to shut him up, the cheapest way to do it.

Furniture procurement lohabour

Therefore, it is particularly important to understand the quality positioning of one's own brand products and the product price and quality positioning of the target procurement market in the early stage. Instead of your purchasing person doing a copy-and-paste photo group sending. So what if you say that your purchasers are not professional furniture practitioners ? At least they would have to spend a few weeks looking at various furniture websites and physical stores to collect information and organize the collected data.

Then if the product structure and product market classification distribution of the target procurement market are determined, what should be done next ? Then a horizontal and vertical comparison must be made. Horizontal comparison is to compare product quality descriptions and prices in the same production area. Why do you want to do this comparison, because you need to control variables. What are the variables of furniture manufacturing enterprises ? Policy support, general cost of raw materials, labor cost, factory rent cost, etc. are all variables. Then why lock the same production area ? Because in the same production area, there is generally little difference in terms of policies, labor, and factory rent. Only by comparing horizontally under the same background can you know who is superior and who is inferior. So how to compare vertically ? That is the comparison of multiple production areas, such as the comparison of various costs between southern furniture production areas and northern furniture production areas. Why is there a price difference ? The price difference is because of cheap factory rent, or because of workmanship and design innovation. In addition, it is necessary to compare why the price difference in each production area is different, some are 1/3, some are 1/2, and what factors cause it. In addition, to provide such a price difference, what requirements does the supplier have for the purchaser ? For example, in many central or northern production areas, they require that a container can only hold 1-2 styles and purchase in large quantities. Although your order has a large total price, you have a large number of product SKUs and a small amount of single product purchases. So what to do ? This is the meaning of vertical comparison.

Furniture suppliers management lohabour

When purchasers have done a good comparison of the horizontal and vertical procurement markets, according to their own needs, they will have a preference for suppliers in a specific production area. Is it possible to mass send demand after selecting the target production area ? My suggestion is not to do so. Because the circle of furniture is very small, basically you send 20 or 50 in groups, among which there are some traders or suppliers who want to get a share of the same kind of products, and they will also send out in groups, which leads to you in this production area. In front of the suppliers, there is no credit at all. People will not respect you as a professional buyer, they will only think you are mercenary, which may cause single or multiple suppliers to cheat collectively. So what should we do ? In the early stage, you can first understand the supplier, the main product type and scale, and you will see the scale and main product type on the websites of some certified furniture suppliers.
At least in the field of furniture, there are not many large groups that can produce all categories. Some have main product categories, and other categories will exist in the form of cooperation or partnership. Therefore, in the early stage, communicate with suppliers about the main products and company information, and then slowly select factories that suit you. Especially if you communicate with the factory sales, you will know whether this person is reliable and professional, and don't just ask about the price. Moreover, in the communication with suppliers, you can also understand the status and distribution of some target procurement markets. Then according to your own positioning, determine large, medium and small production companies, and find 3-5 companies for comparison, which is actually all right. Although sending BOQ in group is simple, it has more disadvantages than advantages. To analyze and compare the target procurement market, although the workload is huge in the early stage, it will be done once and for all in the later stage. And in the future, when encountering secondary purchases, these resources can still be used. Compared with just sending mass requests and asking random people to quote, this method of supplier resource management is more professional, reliable, and can be used later, and it is not easy to step on the pitfalls in product price and quality.

Follow LOHABOUR, we will talk about how to bargain with suppliers in the next issue.