Furniture is an essential part of any household. Currently, it is a $250 billion industry. It’s a business for the craftsman and people who are passionate about decorating homes. If you also love organizing a workspace with furniture tailored for inclusivity and organization, then a furniture business is also right for you.
But, it’s too difficult to attain your stake in the furniture market. There are multiple factors affecting the industry and people working in it. If you are interested in starting a furniture store, you must study the industry to know if it is the right business idea for you. This article should help you understand whether a furniture business is good for you or not.
Pros & Cons
Before you start a business as a furniture seller, here are some pros and cons to consider.
| Pros | Cons |
| Furniture industry is high on demand. Business owners can showcase their skills and craftsmanship. It’s easy to scale a furniture business. | This type of business comes with greater responsibilities like hiring, curating furniture, etc. Requires major investment. Profit margin is low. |
Industry: Furniture Store Industry Size & Trends
The furniture industry is populated with businesses that generate millions of dollars in revenue. It’s difficult for local businesses to compete against big market players. But success isn’t just a dream if you are doing proper market gap analysis, understanding trends, and crafting customized furniture that attracts you.
Industry Overview: Furniture Store in Recent Times
Customer behavior in the furniture market has changed in the U.S.A. in the last five years. More customers prefer the convenience of purchasing their sofa or couch through the sofa than walking into the store. Browsing different products online and comparing product prices is a lot easier and less consuming through eCommerce.
eCommerce preference for a wide range of customers has increased a little more during the pandemic. Customers are more into customizable furniture. Sustainable and multipurpose furniture is gaining more favor than traditional ones. Although the mortgage rate has increased post-pandemic, it didn’t affect the need for new furniture. Instead of moving into a new house, people are renovating their old homes and getting new furniture, sustaining the demand in the process.
While house renovation trends did sustain the industry, in the past five-year period, the industry revenue still faced a drop. The rising interest rates caused a market downfall since people haven’t been buying homes recently. Nonetheless, there’s hope for the furniture industry, which will see growth in the coming years.
Industry Size & Growth
Size: the U.S. furniture industry revenue is estimated at $147.0bn. In comparison to other countries, the furniture industry in the U.S. generates the highest revenue. It has a $263.20bn revenue in 2024.
Growth: Several market projections suggest that the furniture industry in the U.S.A. is supposed to see an annual growth rate of 3.82% between the period of 2024 and 2029.
Number of Businesses: currently, there are more than 63,816 furniture businesses operating in the U.S.A., according to IBISWorld.
Employment: Currently, 477000 people are working in the furniture industry.
Trends & Challenges
Similar to the fashion industry, furniture businesses also follow different trends. Furniture trends often determine revenue growth and fall.
Furniture Store Business Trends:
Here are some common trends in the furniture industry in the U.S.A. –
- Currently, there is a growing need for sustainable furniture. Customers are becoming more and more concerned about the environment. The demand for eco-friendly and sustainable materials like bamboo, rattan, and recycled textiles in furniture is becoming trendy.
- Multipurpose or multifunctional furniture is a new trend. Many reels and TikTok videos about multifunctional furniture are going viral. For example, sofas that can transform into a bed or a work desk arranged into a dining table are quite common nowadays. The idea is to use little space and have more use out of furniture.
- Online sales of furniture have accelerated in the furniture industry recently. Sofa and mattresses are the most purchased and browsed furniture items on the internet.
- The rise of remote work increased the popularity of work desks at home. People working from home are investing in a good work desk and ergonomic chairs. Such work habits are also creating trends in the furniture market, and many small and big furniture companies are already meeting these needs.
- Plus-sized furniture is also trendy now. Whether for living a posh life or to make it comfortable for plus-sized people, larger and plus-sized furniture is becoming more trendy.
Furniture Store Business Challenges:
Some common challenges in the furniture industry include the following points –
- Competition from external competitors is growing in the U.S.A.
- Due to a lack of online sales channels, many small furniture makers cannot showcase and sell their items.
- A low average order value (A.O.V.) is affecting most furniture businesses in the U.S.A.
- Due to a lack of optimization in sales, marketing, data analysis, customer relations, and similar aspects, even larger furniture companies lose customers.
Who Is Working In This Industry?
The furniture industry has 60% male employees working in the industry and 40% female employees. Most people working in the furniture industry in the U.S.A. hold a bachelor’s degree. 73% of them have a bachelor’s degree, while 11% of employees have an associate degree. The average age of furniture business workers is 40 years.
Startup Cost: How Much Does It Cost To Start A Furniture Store Business?
For a furniture startup, you don’t have to spend too much money. The startup cost necessary for this business ranges between $5000 to $60000, with an average cost of more than $32000. But, a furniture startup capital might cross the average and also be a lot less than the average we have shared.
It depends on multiple factors, such as the nature of your business and its scale. Your startup cost may vary based on the business strategy you are going with. The majority of the cost is taken up by some major expenses like setting up your website and online storefront, marketing, etc. For a low-cost furniture business, you can go with an online furniture store. As a store owner, you will provide services like custom-made furniture for niche and targeted segments.
Starting your online store shouldn’t be difficult. You can use your own business website to build an online store. You can also get help from third-party marketplaces like Amazon, Shopify, Etsy, eBay, etc. For small online stores, you can go with a minimum startup cost of close to $5000.
But, a brick-and-mortar store will cost you more, making the startup cost go up to $60000.
Even if you are purchasing old equipment to start your business, a brick-and-mortar store is expensive, and the startup cost is usually nothing less than $60000.
Following is the small startup cost breakdown –
| Start up cost | Ballpark range |
| Licences & Permits | $200 to $400 |
| Insurance | $100 to $300 |
| Marketing & Advertising Budget | $1800 to $5000 |
| Website Setup | $1000 to $5000 |
| Equipments | $1000 to $4000 |
| Inventory | $0 to $40000 |
| Software | $250 to $500 |
| Store Decor | $0 to $3000 |
| Hiring | $0 to $600 |
| Miscellaneous | $500 to $800 |
| Total | $5000 to $60000 |
Earning Potential: How Much Can You Earn From A Furniture Store Business?
It’s difficult to find an average estimate of how much a small carpenter business can help you earn in the USA. The revenue success of your small business depends on different factors, like your sales capacity, the size of your furniture store, and your product pricing. However, you can expect to make close to $285,000 per employee as a furniture business owner.
For someone working solo and running their online furniture store from home, you can expect to earn half the estimated revenue shared above. The first two years might be difficult, and reaching the revenue potential will be difficult.
But, as you establish your business and boost your reputation with consistent marketing, the revenue will increase. If you are able to maintain a 50% profit margin, you will make more than $70000.
With growing brand recognition, you can earn close to $285000, which is the average industry standard for a small furniture business. The growth phase of your small furniture business will be difficult. You have to pay your employees and cover the store rent. These will cut down your profit margin by 15% at the least. So, if you are making close to $900000 in revenue with three other employees working, you will keep a profit of roughly $135000.
Entry Barrier: What Barriers To Entry Are There?
If the startup capital isn’t a big deal for you, then you can easily start a business as a furniture store. However, operations and sustainable growth are the hardest parts to achieve in a furniture business. There are some really difficult entry barriers that new solopreneurs have to overcome. Here are some examples –
- The startup cost is sizable. You have to spend a minimum of $5000 to $10000 to get a small furniture business up and running. On top of that, if you are building a brick-and-mortar store, the startup cost will take up close to $5000.
- Thousands of reputable local and eCommerce furniture businesses are already catering to customers who need help. It’s both challenging for small furniture stores to compete against the big market giants.
- Famous household names like IKEA can leverage economies of scale, allowing them to lower their manufacturing costs. This allows them to offer better and more competitive pricing to customers.
- Established businesses can use their brand reputation and relationships with international manufacturers and chains. They can also cut production costs by importing products from other countries. This also boosts their profit while giving the local small businesses tough competition.
- Although niche and stylized products allow businesses to generate sustainable revenue, the marketing cost associated with them is sizable.
- Also, established businesses always have a strategic barrier, which makes it difficult for new businesses to enter the market.
Furniture Store Business Opportunities: Who Are Your Potential Customers?
It’s difficult to find the right opportunity in an industry that’s heavily populated by high-end competitors. But, with a proper market survey and analysis, it’s possible to find a market gap that you can fill in. It’s extremely important to know what your potential customers are looking for and how they would like to make a purchase. Do they buy online, or would they love to visit stores and buy from physical stores?
It’s best to analyze your local market and examine different market products, product pricing, and the items that are selling the best. Find out what different stores are missing, and also check out the customer testimonials and reviews on different business websites.
Trends are your friends. A good way to understand your opportunities is through understanding trends in the market. Many established businesses fail to spot and utilize specific market trends. This gives you a competitive edge where you can beat your competitors by following trends.
The furniture business spans a wide market and has a diverse customer segment. You can sell furniture to homeowners, institutions like businesses, and the government. Some customers would prefer different types of materials for their furniture instead of just wood. So, ensure whoever you are targeting for your business is the right audience for what you sell.
Frequently Asked Questions
Here are some popular questions people ask about furniture store businesses –
1.Is a furniture business profitable?
The furniture business is both profitable and fulfilling, given the fact that you are solving the problems of a proper customer segment. It’s important to carefully evaluate your market competition and customer pain points before you choose a direction.
2.How much does a furniture business cost?
The furniture business requires a sizable amount of starting capital. Initially, you have to spend a minimum of $5000 to $20000 to start your small furniture business with an online store. The startup cost will vary and can range up to $60000 based on the nature and size of your business.
3.Is furniture high margin?
The average gross profit margin for small furniture businesses isn’t beyond 40%. As you expand and add more employees, your profit margin will go down to 15%.
Conclusion
It’ll require proper competitor evaluation and an understanding of customer pain points to make your furniture business a success. Once you have done your competitor research and found some specific market gap that you can fill in, go ahead and start a furniture-making business. But remember that it’s a business that connects your passion with your profession. While you are at it, do consider the pros and cons mentioned in this article.
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