Furniture Business is a sea to be lost in. It is full of both risks and potential.
Our furniture business was a failure. We manufactured furniture and tried to sell it both online and offline. We had started it in 2015 and eventually discontinued it at the onset of 2023.
Remember, it is very easy to gain soy wojak sympathy like ‘Good things take time.’
But it is a bold decision to acknowledge one’s failure at something. You can find the positives anywhere. But, I’m good with being brutally honest and taking an account of the worst-case scenario. In this article, I’ll share the negative side of a furniture business, so that you can make a more rational and informed decision.
I had joined the family business in 2020. Completing four years in 2024, I look at everything with time and money worth.
I had to decline two job offers which I got without ever sitting in college placements. So, these are some of my opportunity costs of being in a family business. My only expectation from the family business was to get a head start in life and save those years of struggle that one spends in job. Yet, all such expectations remained unfulfilled.
I had some benefits nonetheless. I learnt 3DSMax, AutoCAD, and VRAY. I completed a Diploma in Vastu Shastra in 2021. I tried my hands with a 0 investment dropshipping business as a side hustle.
So here we go with 8 life lessons from a failed furniture business.
1. Variety is both a bane and a boon
The products are heterogeneous. It is easy for me to maintain an FMCG business because the products are standard. Even if I have to be versatile with variety, it is still, more or less, finite.
But other than industry benchmarks, there’s no upper limit to the variety of furniture.
The furniture is a heavy industry, no doubt in that. Above that, you have got many designs. Even above that, you’re also supposed to keep multiple pieces of the same design. And even after that, space is what you have to afford.
2. Space is a menace
First things first, you are supposed to keep a have a huge space for your raw material and machinery. Next, you are supposed to have a bigger space for your ready stock. You have to laminate it to prevent dust. Your work doesn’t end here. You will have to dust it off from time to time. And every time a customer wishes to touch the product, you may have to tear that lamination off and relaminate it later on. Apart from this, the space should be free from rodents and mites. Otherwise, it would create another set of problems.
3. Many furniture showrooms are also godowns.
We also inaugurated showrooms in our city and also threw huge parties. But they were also a failure. See, I’m opening up about this segment. So, know it fully.
When people want to buy furniture, they want to see a similar manifestation at the furniture store. You cannot just start an offline furniture store out of nowhere.
YOU HAVE TO INVEST IN DÉCOR.
People with certain standards won’t visit your store otherwise.
Here we go. You need to have a store that looks aesthetic and less cluttered. That store needs to have a front in a prime location. Then you need to have a godown space that has all the stock that you need to sell. See what are the rent figures.
We had many products of our own manufacturing and some chairs from other manufacturers for trading purpose.
Most of them are lying idle and unsold, even today.
In fact, a cousin of mine visited us to buy some chairs. He liked one chair and asked if I had more pieces of that chair. He was amazed at my answer that the pieces of display were all of the stock I had.
But here’s my problem. If my stock remains unsold, how’d I have the capital to make new stock.
4. People have trust issues, ticket sizes and reservations
Selling is difficult.
You can make literally anything. What is more important is, if you would be able to sell it.
The biggest reason behind the failure of this business has been our inability to sell.
People don’t buy furniture like they do groceries. Furniture is an investment for ages. It is always meant and expected to last long. Furniture is a statement of lifestyle. In our country, it is bought heavily during festive season. People allocate a significant budget for furniture. They give it as dowry in their daughters’ weddings. People buy office furniture while starting a new business.
When people have so many sentiments associated with furniture, the purchase decision would be very difficult. They have their own reservations and trust issues. And ticket sizes vary from zenith to nadir.
5. Heavy Investment
All the raw material a furniture business makes use of is of a heavy nature. You have to buy huge rolls of upholstery materials, fabrics and leatherites that are priced per metre. There are many markets like those in Surat and Panipat where you can get such fabrics.
Also, there’s no account of how much iron, steel and wood you would require.
There’re plenty of tools and machinery you’d also need to afford.
All this is waste if you lack a specialized staff. You’d need to hire karigars who can complete your projects with utmost finishing. Also, you’d require skilled labour to handle the machinery.
6. Small Furniture Businesses are incompetent at ecommerce
As I have already discussed about how big a decision of purchasing furniture is, the segment of furniture in ecommerce is just negligible. Even personally, I have not seen anyone order furniture online in the small towns I live or relate to.
It is a metro city whim. Most of the people in small towns and cities mostly visit offline stores or have carpenters on daily wages.
Even if a small business of furniture enters in the ecommerce sector, transportation is an issue in itself.
7. Assets also depreciate.
One of the stupidest things we did while dragging this business was a false assurance that we have assets for the money that we invested. And we were all wrong about it.
Assets also depreciate. To have an assurance about building assets, we are supposed to be investing in appreciable assets. The market value of such an asset increases over time. However, raw material is subjected to wear and tear. As I have already mentioned before, rodents and mites love to ruin wood and fabrics.
Wood can also turn out to be brittle and soiled in damp conditions. Iron rods and sheets rust in the presence of moisture.
Machinery is a better investment, if we talk about priorities. However, machines are not aloof from depreciation. In fact, if you do not have good sales, it would result in halted production. In case of less production, machine would be idle, most of the times. Depreciation applies likewise.
In fact, ready stock also wears out without maintenance.
The costs you bear in maintenance do not count anywhere.
8. Obsoletion and change of fashions make up a potential threat
This is a risk that every lifestyle business faces. Market runs on trend. An average consumer behaviour in a small town is like a sheep only. People don’t research. They just want a status symbol. Obsoletion doesn’t let your stock see the market potential.
TL;DR
- Variety is both a bane and a boon.
- Space is a menace.
- Many furniture showrooms are also godowns.
- People have trust issues, ticket sizes and reservations.
- Heavy Investment.
- Small Furniture Businesses are incompetent at ecommerce.
- Assets also depreciate.
- Obsoletion and change of fashions make up a potential threat.
Suggestions
Before you get into manufacturing furniture, I would strongly advise you to start with trading first. Starting any manufacturing business without trying hands at trading is a stupid decision. Starting a trade before manufacturing would serve as a pilot project for your business.
Furniture takes a lot of space. To save your rent, you can also work as a middleman between a customer and a supplier. In this model, stock would be with the supplier. You just deliver when an order comes. Your risk is minimized and you have your margin.
I would suggest that you pick up only one segment of the furniture business. Take sofas or chairs for example. Expanding variety would come handy in this case. Plus, you will be able to specialize in what you offer. Have one vendor whom you would supply. This would be extremely helpful if you are not good at sales.