Furniture sales are likely to continue strongly for the near future. With that in mind, make sure your furniture efforts are primed and ready to go
Office furniture provides independent dealers with strong sales possibilities. It’s a category with some familiarity for almost every salesperson and a capital purchase that every business needs to make. Aside from transactional business, most furniture sales tend to be cyclical and right now the market appears to be at a peak.
“Four or five years ago people wanting to revamp their furniture gave everybody a new chair,” says Roger Harrell, general manager at Ponder’s Inc., Thomasville, Georgia. “There’s more money flowing in the economy now and people have decided to pull the trigger.” Last year was the biggest ever for furniture sales at Ponder’s; that success was driven by two larger furniture projects. This year sales will probably not hit the same mark but Harrell expects profit dollars to be as good or better. “The more success we have, the more successful we are,” he says.
With office furniture there are myriad ways for independents to improve sales efforts. Transactional business can provide a solid path to sales success. Moving into office layout and work space design offers still more options. Dealers can hire a designer, outsource work to independents or rely on vendors to provide drawings and layouts. Dealers can succeed with open lines or commit to represent an A-grade manufacturer. Many dealers also find opportunities to sell used and close-out furniture to augment sales of new products.
More profitable sales
Furniture sales are important to success at Apex Office Products, Tampa Florida. “It’s important because profit margins are much higher and there is a little less competition,” says Martha Landis, vice president of furniture. The furniture division puts out proposals, makes presentations, sells the furniture and performs installations. “Being able to develop designs in house has been a big advantage for our clients,” she adds.
Business is up at Apex. The dealership has added numerous new accounts due to its expansion into Ocala and the acquisition of a dealership in Bradenton in January of this year. “We cover a larger area than we did just a few years ago,” says Landis. Ocala is situated near some of the largest retirement communities in the nation and Apex has developed a market for home office furniture. “Retirees are doctors, lawyers and engineers, and they want to put an office in their home,” she says.
Office Essentials, St. Louis, has seen furniture grow to become 25 percent of its sales. Three years ago that figure stood at 15 percent; more recently furniture has outpaced growth in office products sales. Chris Fortune, furniture manager, has been with the dealership for 14 years and in that time has seen the furniture category grow from a transactional business to where today it regularly brings in furniture projects. “We now get half-million and million-dollar projects that we never could have handled just a few years ago,” he says.
Success at Office Essentials came first by developing a team to handle large-scale projects and then building relationships with C-level executives in its client base and gaining their confidence. “Our entire company has embraced going after contract business,” says Fortune. “Having confidence that we can compete with larger contract dealers has taken some time but we’ve turned that corner now.”
The merger last year of Harris Office Products in Van Nuys, California, with American Office Products of Chatsworth created one dealership with a strong furniture sales tradition. “American was a blend of office products and furniture but there was a strong focus on furniture,” says Dennis Watson, vice president of sales for what is now Harris American.
“Like most office products dealers, Harris would sell furniture by accident,” says Watson. The merger resulted in a perfect blend to bring American’s furniture expertise into supply accounts. “They had solid relationships but were reluctant to push furniture,” Watson says. “It’s pretty typical for a general line salesperson to not want to screw up a good account by bringing in furniture.”
Sales of furniture at Harris American are up and should come in between 15 and 20 percent of total sales this year. “We have a lot of projects in the pipeline right now so we might even hit 25 percent,” Watson says. American Office Products would typically hit furniture sales close to 35 percent. “We’re starting to get a lot of traction on the Harris side,” he says. A couple of supply salespeople from Harris have been motivated to sell furniture. “I could definitely see them being swing players who could really drive sales.”
Furniture accounts for roughly half of the revenue at Egyptian Workplace Partners, Belleville, Illinois. We are really good at furniture projects,’ says Kevin Baltz, director of interiors. “We have built a really strong infrastructure. No job is too big for us to go after, and we’re having success at going after and winning those jobs.
“Almost every item sold is made to order,” says Baltz. “It’s designed and arrives when the customer needs it.” Full service takes in working with the customer, designing the project, scheduling, installation and continuing follow-up. “Probably half of our furniture is for new customers.” The furniture division drives all the volume with four project managers who work on sales and design.
Specialists drive sales
Having expertise on staff is one of the key requirements for growing furniture sales. Office Essentials employs eight furniture specialists, who are designers by trade but also sell and manage projects. “We ride the coattails of our office products salespeople, says Fortune. Office products salespeople bring their relationships to the furniture team. “Then the furniture team takes that and hopefully turns it into more business.”
Supply salespeople can always turn a furniture lead over to a specialist but there are incentives for aggressive salespeople to go after furniture sales on their own. “You can sell a customer a thousand dollars of office supplies and make 18 to 20 points or you can sell them a thousand dollars’ worth of furniture and make 40 points,” Harrell says. “When salespeople have success with furniture, even on a small scale, that makes them hungry for more.”
Supply salespeople should inform customers about furniture capabilities and hand out a capabilities’ brochure, a furniture catalog or both. This lets clients know that—in addition to what’s available in the catalog—space planning, move management and other services are also available. Harrell tells supply salespeople that after they finish a successful meeting at a 50-person office that it makes sense to make a brief stop at the ten-person office next door. “A salesperson might not normally spend time on a small supplies account, but if that office requires a remodel or relocation that’s suddenly a viable client,” he says.
Tallgrass Business Resources, Coralville, Iowa, sells supplies and promotional items but its core competency is furniture. “The primary reason for our growth is a commitment to change our market strategy,” says Tom Vander Vaart, director of furniture sales. “We have addressed what we present and how we present it, because the days of measuring success by how many cubicles we can sell are long gone,” he says.
Instead, the current furniture sales approach at Tallgrass endeavors to gain as much intel as possible so the customer becomes part of the solution. “It’s really about getting in front of the customer and letting them make the choices,” adds Vander Vaart.
More choices for workers
It is less about the furniture and furnishing products that go into a space as it is about the environment that those products go into. “We address the whole environment—what some people would call an ‘eco-system of spaces’,” says Vander Vaart. Work environments are changing. There will always be a need for what he calls “head-down work” but today’s agile work spaces give workers more choices as they bounce between a small home-base workstation, softer seating where they can catch up on email and areas for collaborative meetings with two or three people.
“Everybody wants to be Google and have a swing, a slide and a Foosball table,” says Vander Vaart. “But it can look different to that.” It’s about choices, he says. These modern work environments incorporate meeting spaces, café-like areas, various seating options and workstations. “Everybody wants it,” he says. He describes a meeting with a five-person office where they expressed a desire for a look other than cubicles. “Unquestionably, the Google look has started to trickle down to smaller companies,” Vander Vaart contends.
A heightened attention to business workspaces is integral to success with the furniture category. With low unemployment, attracting and retaining quality employees becomes more challenging and an attractive workplace can serve as an additional enticement. “A lot of kids don’t want to work in the same type of environment that their parents were trapped in for 30 years,” says Baltz. New environments incorporate various zones such as private work areas and more social settings. Generally speaking, environs are more open, encourage conversation and appear reminiscent of residential spaces.
Egyptian employs a working showroom to show its primary offerings from Steelcase and other furniture vendors. There’s also an offsite 2,000 square foot showroom for healthcare and education products. Products include exam tables and waiting room seating along with numerous variations on classroom situations. “We have these solutions more isolated so they don’t use up showroom space for everyday needs,” says Baltz. Everyday furniture also gets used in healthcare and education but not so much in exam rooms and classrooms.
Furniture customers planning significant projects are invited to the Office Essentials showroom to check out available furniture options. “But we also have mock-up programs and demo chair fleets where we will send product out to customers for them to try,” says Fortune. On large projects the dealership might mock-up a workstation and have the customer try it out and get back with feedback after a week or a month.
“Our 7,000 square foot showroom sits right on the street in Ocala and gets walk-in traffic almost daily,” says Landis. The Apex showroom features an array of new furniture and two salespeople are on the floor full time to greet customers and help them find what they need. In the rear of the showroom is an area of closeout furniture. “We buy truckloads of furniture that comes in dented or dinged or was ordered incorrectly,” says Landis. “It’s all new stuff that we are able to get at a solid price point.”
Harris American has what Watson calls a “small but functional” furniture showroom. “It allows us to show enough to give people ideas,” he explains. The dealership works with a number of local furniture manufacturers and relies on them for product support. “It gives us the opportunity to let clients go through a factory tour. It kind of helps cement the deal,” he says.
Customers seek guidance
Watson expects furniture will gain a bigger share of sales dollars in the future in part because the furniture category is populated by products that aren’t commodities. “There is still that fear factor of a capital purchase that can so easily get screwed up,” says Watson. “If you are putting together an office as a package or you’re doing a floor, there’s a fear factor where the customer wants you to guide them.” That’s where the opportunity for many value added services comes from and where dealers can make a significant profit, he adds.
A furniture showroom close to 5,000 square feet in Thomasville is the only spot in town to view office furniture. “We have some competition from local furniture stores that have some home office products,” says Harrell. The showroom offers samples of many of the furniture offerings and also includes a selection of used and closeout furniture. “We’ve been doing used and closeout for as long as we’ve been selling furniture,” he adds. “We found that it brings in customers.”
Egyptian Workplace Partners gives used furniture away. When the dealer does an installation it decommissions the site and recycles or reuses as much as possible. “For the most part it’s not worth the cost to move the furniture,” says Baltz. It costs about $250 per cubicle to break down an office and load it on a truck. Just recently Egyptian donated product from its warehouse with a $35,000 street value to the local police station.
“Our competition is Haworth, Kimball, Herman Miller, Teknion, Allsteel—all of those kind of companies,” says Baltz. Egyptian does offer Global as a back-up, lower-priced line but typically leads with Steelcase. “There’s a reason why we do that because the depth of the line allows us to do projects without using multiple suppliers,” says Baltz. Customers agree that a minimal number of lines in a project guarantees that products will match and it is much easier to manage a couple of vendors compared to eight or ten.
Harrell isn’t particularly concerned with competition. At lower price points he chooses not to compete, taking the position that low-priced chairs, for example, will always fail in a short time. If he sells those inexpensive products his customers will only get upset with him.
“Our competition ships furniture in a box and you are on your own,” Harrell says. They won’t always admit it but most customers seek guidance when purchasing furniture, he says. “You have to educate them along the way that whether it’s a chair mat or a whole second floor that you’ll be there for them.” Most people, especially when it comes to larger purchases, are unsure of what they’re doing and expect some guidance from their dealer.
The anti-Amazon approach
Ponder’s offers HON, Maxon and Indiana Furniture products to provide more choices for customers. If a customer needs something a little different, these American-based manufacturers can easily produce items not listed in their catalogs, Harrell says. “It might be called special order or custom, but these higher-margin products are not something you can find shopping on Amazon.”
At Tallgrass, competition as Vander Vaart describes it comes mostly from other independents who look very similar to themselves. “Our competition looks exactly like us so we have to differentiate ourselves with unique processes, solutions and products. “Out of necessity we can’t represent Steelcase alone, so we work with other manufacturers that address different needs,” he says.
Vander Vaart also finds that the dealership competes with Costco and Wayfair on lower-end products. He lets customers know that Tallgrass also sells products in that price range, that the products he offers are built to commercial standards and often come with some warranty. “We absolutely have to represent product like that,” he adds.
The biggest competition for Apex has to be the internet. “We hear constantly from customers that they found something online with a great price and can we match it,” says Landis. Those customers don’t differentiate between one supplier that drops a box off on their doorstep and Apex who will come in and install the item. “They may spend a few dollars more with us but they get way more value based on the services we provide before and after the sale. We take care of everything for them.”
On trend
In terms of furniture trends, Landis points to a number of recent product introductions that offer creative approaches such as adjustable-height tables, sit-to-stand desks and collaborative seating. “These products are exciting for the industry and for our market,” she says. Different soft seating solutions with a variety of options and arrangements, some even equipped with phone jacks and USB ports, are now offered. “Collaborative seating provides a more relaxed atmosphere that is supposed to promote improved morale,” says Landis.
The growing popularity of collaborative seating options and the space it takes to support the approach can lead to less space remaining for conventional workstations. “If they want collaborative space, something has to give,” says Vander Vaart. Workstations are shrinking from an eight by eight cubicle to four by six or six by six, which frees up collaborative space. “The shift to collaborative spaces is the biggest trend we’ve addressed in the last couple of years,” he says.
“The hottest things that people are buying are sit-to-stand desks and wall systems,” says Baltz. Egyptian offers three types of desk – A grade, B grade and imported product. “I would say that 70 percent of the desks we’ve sold in the last two years have been motorized up and down.”
Available wall products, generally are ceiling to floor wall and door systems, usually glass, which offer alternatives to stick-built walls.
The paperless office takes hold
The paperless office also impacts furniture trends. As businesses convert paper files to digital and reduce the need for traditional file cabinets, they don’t always recognize other changes that take hold.
“We challenge them to understand why these changes are coming,” says Baltz. “We’re not putting binder bins on cubicle walls, and there will only be minimal storage space at each workstation.” Many times multiple monitors are now involved and additional efforts are required to make sure workstations incorporate all these options ergonomically.
At Office Essentials Fortune maintains that while the Midwest has been late to the game on some recent trends, benching products have started to filter down from the East and West Coasts. “Even though it’s not a new trend, it’s now trickling down to smaller companies like accounting firms and law offices,” he says. Additionally, sit-to-stand continues strong. “Many of the new projects we work on incorporate sit-to-stand units upfront as opposed to the recent past where we would do retro-fits,” he says.
To get the word out about furniture, Tallgrass has hired new business development people that have no account responsibility. “They are just out there with a Tallgrass name knocking on doors,” says Vander Vaart. There is also a year-long marketing campaign underway that targets different sectors each month. “We are trying to get as many touches as we can to keep our name out there. Unfortunately there are a lot of projects that we never hear about,”
Last month, in order to get its name in front of potential customers, Egyptian partnered with Steelcase to deliver a webinar “The State of Work: Blur the Edges,” which looked at the factors driving change in the workplace. “About 20 people signed in for the webinar but the program was recorded and people can go back in and view the webinar at a later date,” Baltz says.
Baltz is convinced that furniture is going to become a more important category for independent dealers going forward. “If you’re just selling commodity products you are really missing an opportunity,” say Baltz. Dealers can sell furniture with relationships they’ve already established, and its presentation is a natural extension to the office products story that is already being told. “And it’s been a pretty easy transition to sell furniture to supply customers,” he adds.
Michael Chazin is a freelance writer specializing in business topics, who has written about the office supply business for more than 15 years.He can be reached at:
mchazin503@comcast.net.