How does the production and sales cost seriously overload the furniture manufacturers?

In the past two years, the prices of raw materials, labor prices, land prices, logistics costs, promotion costs, store rentals and other costs have continuously increased, and sales prices have faced tremendous resistance, and furniture distributors and companies are generally in trouble.

According to the survey, more than 70% of the dealers operating in Shanghai's supermarkets accounted for more than 70% of the losses, while the rest of the unprofitable dealers are barely supported by meager profits. Similar to the situation of dealers, many small and medium-sized furniture companies are on the verge of bankruptcy and face the embarrassment of “the higher the yield, the greater the loss”. Relatively speaking, the situation of the stores is better, especially some supermarkets. With their strength in channel control, they can often overcome cost problems by increasing rents. Therefore, the cost pressure on the furniture industry today is borne by dealers and stores.

Then, as the main burden of cost pressure, how should furniture dealers and furniture companies overcome the cost predicament and usher in a turning point for survival and development? The author believes that the following aspects should be tried by dealers and enterprises.

Dealers: Rent reduction is the first business in the dealer's cost, store rental accounts for a large part. Therefore, the most direct way to reduce costs is to start with store rental. In general, dealers can relieve rent pressure in two ways.

First, they joined hands with factories to negotiate with the stores and asked for rent reduction. Due to the relatively weak power of the dealers and the small amount of verbal rights, the store’s request for rent reduction by dealers is generally ignored. At this time, dealers should combine other forces to improve their voice. Wang Xingang, chairman of Yuanmei Furniture, a well-known home circulation trader in Shanghai, said: “A dealer can unite with the factory to negotiate with the store. Generally speaking, the store will give the factory some face and make a slight concession on the rent. At least some stores do It is also possible to understand the difficulties of the factory and the distributors, although not necessarily lowering the rent, but at least it is not possible to increase the rent.” In fact, in addition to the joint factory, the dealer can also co-operate with other dealers in the store, or seek a dealer’s alliance organization. With help, bargaining on the issue of rent and the store.

Second, flee high rents and transfer small and medium-sized stores. This year, the author found a strange phenomenon in a number of furniture stores in Shanghai: Some hypermarkets, and even homes like Meikailong and other signage stores, there are no shortage of exit dealers, and there is almost no dismal business within the store. On the contrary, some small and medium-sized stores in the city or in the suburbs are normal business operations, with few companies exiting the market, and some new merchants who have left the supermarkets. Obviously, some dealers have reluctantly cut their love, abandoned the brand influence of high-rent shopping malls, and chose low-rent small and medium-sized stores. This is a choice about relative costs, which seems to be feasible at present. For such a practice of reducing the size and position of the transfer,

Yuanmei Homeowner Wang also gave his affirmation. Wang said: “In the downturn of the market, Yuanmei also slowed the speed of store expansion, reduced the number and frequency of opening stores, and was more cautious in opening new stores. Before and after May 1st, Yuanmei opened two new stores. The storefronts are all in small and medium-sized stores and suburban stores.Before, we did not look at such stores, but now we are concerned because only these stores are full-rented, which means that stores meet the needs of dealers to reduce costs. , The business is healthier and the business is more normal than the hypermarkets."

Enterprise: Do "Articles" on Production and Management

For furniture companies, due to the large increase in the cost of raw materials, resulting in very difficult cost control, mainly from the production and management aspects.

First, the pre-production will be transferred to the Mainland. How to reduce production costs is an issue that Shanghai's home companies cannot avoid. Shanghai's human resources costs and raw material costs are almost the highest in the country. Therefore, it is not feasible to solve the problem of production costs in Shanghai. At this time, Shanghai companies may wish to turn their attention to other parts of the Mainland and shift their pre-production to the mainland to reduce production costs. The author understands that some Shanghai-based companies, such as Shanghai Qiangle Furniture, have already attempted to transfer the product's pre-production to Jiangxi and then shipped back to Shanghai for packaging and OEM. In this way, reduce your own production costs and gain price advantage. This kind of transfer can be regarded as an active exploration of controlling costs and changing the mode of production of Shanghai home companies.

Second, to rectify management, the word "province" takes the lead. For furniture companies, although the cost of production is the bulk of the cost, the cost of management also occupies a very important part. In the case of rising prices of various resources, the control of production costs cannot be fundamentally changed. On the contrary, the control of management costs is easier. With the idea of ​​“a son of the province is a child”, it is worthwhile for furniture companies to save management costs. Therefore, furniture companies may wish to strengthen the internal management of enterprises, strengthen the production and management of business training, hard work, save money to ensure that it can support the industry downturn period, to prepare for the industry recovery period to make adequate preparations.