Furniture is a common necessity and it is extremely rare to find a home that is unfurnished. While the larger chain furniture stores may do well, it’s the small business store that suffers. Today we interview the small business Furniture Salesman.
Daclaud Lee: Welcome to Random Interviews. Tonight’s guest is a Furniture Salesman.
Furniture Salesman: Hey Daclaud! Nice to be here!
DL: Tell me a little bit about the sales strategy at a furniture store.
FS: It’s the same basic rules to any kind of sales. The general rule of sales is 35% talking and 65% listening. You have to listen in order to find out what the customer wants. Then it comes down to supply and demand.
If you have something that a customer wants and price isn’t an issue, then you will be able to make the highest profit margin on that sale. But if every furniture store is selling a generic sofa or love seat, then you’re probably going to be making the lowest profit margin.
DL: How much profit margin should furniture be sold for?
FS: In an ideal world, the profit margin of furniture would be 3.5 times of the whole sale price rounded up. So a love seat that costs $349 wholesale should be worth $1049; in an ideal world that is.
DL: What do you mean by “in an ideal world“?
FS: That’s where we go into supply and demand. A competitor could be buying from the sale whole seller as you and they might be advertising the same or similar love seat for $499 because they know another store is selling it at $549, then a really desperate and stupid salesman might go as low as $399.
So as a furniture store salesman or manager, you’re going to need room for negotiation. In order to negotiate, you’re going to need a good sales team. This is where the 35% talking comes into play. You start to ask them questions, like where they have been and what other stores are charging, and what you can do to earn their business.
After you ask all these questions and the customer is still not buying and I really want to close the deal, then maybe I might offer to sell the love seat for $399 if the customer buys “today”. In an ideal world, I should have made $700 on that love seat that’s going to last you 5-10 years instead of $50; at 6% commission the sales person only made $3 off of that $399 sale. Sucks doesn’t it? That $3 won’t even get you a Subway Sandwich. And that salesman probably hustled for a an hour just to make that $3 sale.
And one more thing, the wholesale cost is cheaper if you purchase in bulk. A small furniture store will not be able to purchase in bulk, so they naturally make less than a larger store with a warehouse that can purchase in bulk. Factor this into a salesman’s commission as well as the small business owner’s profit margin and it will be less.
DL: Wow, I didn’t it was that bad… I’m sure the average “customer” probably doesn’t care.
FS: You bet ya they won’t. The customer is generally out for the best deal, they don’t care about the sales person’s income or whether or not he has money to feed his kids, much less himself. Which is why only the best sales persons can make it in the furniture store sales game. If you’re only making $3 commission per sale, then you’re going to have to hustle in high volume, and unfortunately in the furniture business, you’d be lucky to make 3 or 4 sales a day. Some days you might not even make a sale.
DL: So all furniture store sales persons are on commission? Do they get a base pay too?
FS: Some do and some don’t. A full commissioned sales person works at 6 – 6.5% commission. An hourly sales person may get a base pay of $8 per hour plus a commission if he manages to sell over $10,000 worth of furniture a month (good luck with that). In our society, a sales person is only worth what he or she can sell. Obviously if you can sell something at a higher profit margin, then you make more in commission.
DL: Wouldn’t the customer feel ripped off after paying the highest price for the same piece of furniture?
FS: It’s all a matter of perspective. In this day and age, people get offended by everything, which is bad for the business owner. Some people would like to have everything for free, but that’s not going to happen. What they need to understand is that we are a business and not a charity. Furniture in general, in my opinion is priced too cheaply based on the consumer demand price. A customer expects to buy a piece of furniture and if it lasts him 10 years and you only made $150 bucks off of it, then it’s not a good deal for the business owner or the sales rep. There is no value in furniture anymore, or at least people don’t appreciate it’s value and just want things to be cheap.
And then the customer asks: why don’t you “throw in the ($300) Ottoman too”?
How many people need furniture every day? Not many. The population is too limited and it’s not like everyone is out shopping for furniture every weekend like they shop for clothes. Furniture is usually a one time, big investment, so in order to keep a store in business, we need to make the highest profit margin. Let me tell you, it’s not about greed, it’s about survival. Rent isn’t cheap either, and neither is electricity, heat or even employee expense.
That’s why many furniture stores do special sales events. These events are an age old strategy to push sales by reducing profit margin but increasing sales volume.
DL: Speaking of survival, what is this Emergency Survival Sale or Going Out of Business Sale all about?
FSM: (Laughs out loud) It’s a common tactic among small furniture stores to have these sign tactics. It’s an easy way for us to have high pressure sales people make more sales each day.
It’s like an ongoing joke, but not really, because as a furniture store, you don’t really rely going to make a lot of sales per day, but you “need” to make sales every day. In a way it’s true (the going out of business part). I mean for a small furniture store, it’s day to day survival and we are constantly at risk of going out of business each month if someone doesn’t make a purchase.
DL: Which months do you typically see the most business?
FSM: January and February are the busiest months and then followed by March to May. I think it’s due to the tax returns. Summer through Winter are typically slow. July is usually the slowest month I’ve ever seen.
DL: Do you enjoy working in the furniture store business?
FSM: I’ve always had an interest in furniture and the beauty and craftsmanship. It’s a pretty relaxed job, but the main downside is that it is highly commission driven and a typical sales person may not make as much as people would expect. I’m not sure whether or not this is true at some of the larger stores.
DL: What kind of personality do you have to have to be in furniture sales?
FSM: The ability to empathize with the customer is the most important skill to have and not everyone can do this. An extroverted personality tends to work well, but I’ve seen some introverts succeed. You just have to be able to follow the rules of engagement and have good people skills. If you don’t, then you have to fake it til you make it. This type of job isn’t for everyone and you really have to be a people person to actually enjoy sales enough to be successful at it.
DL: Any final words or closing statements?
FSM: Not really Daclaud. Just be good to people!
DL: Anyways, thanks for the interview! I’d like to know what our readers think. Remember to comment below if you liked the interview or hated it. I want to know!