Furniture Company Business Model

- Jan 04, 2019-

Industry business model:

In general, the domestic furniture industry mainly has two business models: independent brands and OEMs.

1. Independent brand business model. The self-owned brand business model usually includes design, research and development, procurement, production and processing, wholesale and retail. Sales is the focus of furniture business, directly related to the profitability and brand effect of furniture companies; and the strength of sales ability mainly depends on the optimization of sales model and the construction of sales channels. There are two specific sales models: First, the direct chain model, manufacturers directly invest in opening retail outlets, and implement unified management of retail outlets; second, the franchise model, manufacturers will own their own brands, trademarks, etc. The franchisees are granted in the form of franchise contracts, and the franchisees can be given training, management and other aspects in a timely manner.

Sales channels include furniture stores, individual stores, department stores, supermarkets, exhibitions and the Internet. Among them, large furniture stores are becoming the most important retail channels for furniture companies due to their professionalism, diversity and one-stop service hotspots.

2. OEM mode. The OEM model is what we usually call "OEM production." At present, international home furnishing brands occupy the high-end mainstream furniture market with the sales channels and brand advantages all over the world. Entering the supply chain system of international home furnishing brands in the OEM mode has become an effective way for domestic furniture manufacturers to develop international routes. In the process, it takes about 1-2 years for the supplier's qualification to be validated, and then it can be officially become a supplier after a period of small batch supply testing. Once the furniture manufacturer has passed the final certification of the supplier qualification, it will be included in the global supply chain of internationally renowned furniture brands, and the two sides will form a relatively long-term and stable strategic partnership.