Phenomenon: furniture products generally rose by more than 10%
Ms. Feng, the agent of Valentis Furniture Beijing, was quite upset recently. When two customers came to book a soft bed that was good a month ago on November 28th, they found that the price had increased a lot compared with the original calculation. The customer insisted on ordering at the original price. Ms. Feng looked at a notice from the Guangdong headquarters and was worried: if you do n’t place an order at the original price, the customer would n’t want the item; if you order at the original price, you will have to pay 8% . It turned out that she received a notice from the Guangdong headquarters in early November, starting from November 8th, the four products of Valentis raised the ex-factory price in a comprehensive manner, an increase of 8%.
"That sofa was originally sold for 15,000 yuan, but now it has become 16,200 yuan. Customers are certainly not satisfied!" Miss Feng's face was helpless. In fact, the situation of the forced price increase of manufacturers like Miss Feng is everywhere in Beijing's major stores. Just a week ago, in the powerful furniture showroom of Red Star Macalline East Fourth Ring Store, the sales staff were busy rewriting the price tag and replacing the old price tag. "If you still sell at the original price and you will lose money, we will increase the price a little bit." The staff member told reporters that the increase was about 30%, and if it caught up with the store to do activities, the price would increase slightly. One point, otherwise the activity is too strong, the manufacturers can not afford it.
Chen Xiaotai, general manager of Top 100 Furniture, also recently worried about price increases. Go up, consumers feel the price is high; if it does not go up, the manufacturer becomes a real loss-making sales. "After our internal research and discussion, we decided that in order to ensure basic profits and sustainable development, the top 100 board products will soon be raised by 20%, and the prices of solid wood products will be increased by 10% compared to the past." heavy.
Regarding the price increase, the same difficult decision also happened recently to Qumei Furniture, with an increase of about 10%. Yifeng Furniture, a leading brand of panel furniture in Beijing, also had to raise its prices by 30%. The wind of price increase is sweeping the furniture industry with the growing winter wind.
Reason: Costs increase and sales decline
According to the basic laws of the market, price increases are often due to the shortage of products. The balance between supply and demand has been broken, things are rare, and price increases are reasonable. However, this round of furniture price hikes is a kind of "monster": furniture manufacturers are shouting "business is not easy to do", not only to lower prices but to increase prices!
Wen Shiquan, chairman of Yifeng Furniture, said that the "Real Estate New Deal" was finally reflected in the furniture industry in the second half of this year, and market demand was not strong. Compared with the same period last year, sales of Yifeng in Beijing fell by 40%. At the same time, various costs are constantly increasing, and the labor costs that increase year by year cannot be ignored. In recent years, with the overall increase in residents' income and prices, workers have become increasingly demanding wages. All skilled workers are generally paid around 4,000 yuan, and sometimes workers in special types of work have higher wages. "You can't grieve the workers, but you can't let Yifeng fully digest the labor costs. You are forced to help our products only increase."
The reason why Valentis gave the price increase in the fax to the distributor is that: due to the excessive increase in raw materials and the increase in logistics costs, the sales price is too low to offset the increase in costs, and only by raising the ex-factory price make up. For rising raw materials, the industry generally confirmed that what was said was not false. Chen Xiaotai described the hot timber trade as follows: "Now a group of people are stationed near the border between China and Russia every day, but when a truck transporting timber comes in, it will be stopped immediately, regardless of the high price, all the timber and raw materials are indiscriminately bought. The extent of the shortage is conceivable. "Chen Xiaotai said that with less raw materials, the price has naturally soared. For example, ash wood has soared from a few hundred yuan per cubic meter in the past to more than 1,500 yuan. Furniture made of ash wood has a natural price The water is rising.
Zhang Fucai, chairman of Qiangli Furniture, agrees with Chen Xiaotai's statement. He said that the rising raw materials are not only wood, but also the paint and hardware accessories that must be used to make furniture. If it is a soft sofa, cotton and other materials are also involved. In addition, the increase in factory procurement and transportation costs is also a direct reason for the increase in furniture prices. "Everyone knows that the price of gasoline has risen, so the ensuing increase must be the increase in freight rates, which will lead to higher costs, and the price increase will be taken for granted."
It is reported that since the second half of this year, the overall sales situation of furniture companies is not optimistic. Many companies have fallen by as much as 60%. In some mainstream stores, even the top ten companies may not be profitable. In this case, companies have played a price increase, which is really helpless.
Reaction: Consumers are not sensitive to "price increases"
Although the upward price of furniture products is reasonable, there are also insiders who questioned: furniture is not among the FMCG or daily necessities. Many times people only visit a home store for several years, whether the price rises or not, consumers are not sensitive.
In fact, the price of furniture is very learned. In high-end stores such as Home of the House, Red Star Macalline, etc., a group of branded furniture companies are gathered. Their prices are relatively strong. It is not easy to make 10% off or 15% off. Only 30% off during promotions. But in some lesser-known stores, 30% off, 2% off, or even 1% off signs can be seen everywhere. Many consumers have developed the habit of not buying without discounts, which directly leads to the falsely high furniture prices. Generally speaking, the retail price of furniture is twice as high as the ex-factory price to have a discounted cost. If the actual selling price of furniture is not more than 30% of the gross profit compared with the ex-factory price, it is impossible to maintain high costs such as high rents, sales commissions, logistics, and services.
It is precisely because the price of furniture that people see in the market is fictitious, and what the transaction price is is really cost-effective, depending on the customer's own feelings. And how much the furniture is marked and how much discount is finally made is also based on the manufacturer's mouth, and consumers can't understand the inside story at all. This leads to the so-called price increase and price reduction is only the settlement price between manufacturers and dealers, it is difficult for consumers to feel.
Liu Chen, secretary general of the Beijing Market Association Home Furnishing Branch, believes that the furniture industry is mixed, and some non-brand furniture companies may use the "price increase wind" to raise prices casually, but it will certainly not appear on brand furniture companies, especially Beijing furniture brand. "Once it becomes a brand, the company's focus is on how to get more benefits for consumers, rather than how to make huge profits from consumers."
In the face of the rising price wind caused by increased costs, Liu Chen's advice to consumers is to choose products of branded furniture; the recommendation for furniture companies is to dig deeper into the value of goods and avoid the cost of opening stores in Beijing, Shanghai, Tianjin, etc. Higher tier-1 and tier-2 cities will target market expansion in tier-2 and tier-3 cities. "Stores of the same area may have a gross profit of only 10% after excluding rent and other costs in first-tier cities, but they must be much higher in second- and third-tier cities."
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