MARKET For Used Furniture: Proving Opportunities And Options, THE

Office World News, Mar/Apr 2004 by Schwartz, John

3. Make sure that whatever you are purchasing or picking up can be readily sold. There are many beautiful pieces of furniture that have no resale value. This is especially true for custom furniture, made for a specific office or application. If it can't be sold in 60 days, you should not be buying it.

4. Clearly review the expected time frame for removal of the product, and make sure that you have the resources to meet this expectation.

5. Don't overpay. Your purchase cost should be three to four times less than your targeted sell price. For example, if the target selling price is $100.00, your purchase price should be no more than $25.00. Unlike selling new furniture where you base your sell price on your cost, in purchasing used furniture, your cost is based on your targeted sell price.

Used furniture brokers specialize in purchasing large inventories, usually with the intention of quickly reselling them. In our business, we work with brokers on a regular basis, but under strict guidelines.

1. Only work with local brokers. Just about everything can be found within driving or flying distance of most metropolitan areas, so stay local whenever possible. If it is not possible and you have to source products out of your region, get on a plane and fly out to meet the person face to face (especially if you don't know the broker).

2. Start slow (small buys) to test the reliability and veracity of the broker.

3. Never buy anything sight unseen. If the inventory can't be physically viewed, clear digital photographs should be a requirement.

4. Make sure the person you are buying from owns the product before you commit it to your customer.

5. Be careful about revealing end-customer information to a broker. As far as they are concerned, you are the customer. They do not need to know anything else.

6. Clearly define the agreed upon quantities and condition of the product up front. Put those facts into the Purchase Order. This provides some measure of relief if the product you receive does not match the description given.

7. Never issue payment until the product is received or the pick up process has physically begun. Brokers rarely pre-pay for product, so you shouldn't have to either.

8. Don't overpay. Your purchase cost should be 1.5 to 2.5 times less your targeted sell price. For example, if your target sell price is $100.00, the purchase price should be nor more than $50.00. Gross margin expectations when purchasing through a broker are reduced because the broker is taking all of the risk.

While the flood of products has subsided over the past year, the used furniture market is returning to normal and is still a viable business for office furniture dealers who want to offer their customers affordable alternatives to new. Knowing who to go to and how to shop for products will help you to grow business and increase your customer base.

John Schwartz is president of Sam Clar Office Furniture located in the San Francisco Bay Area. Sam Clar is a full service dealership offering new, used furniture, design services, delivery, and installation. He can be reached at 800.726.2527 or via e-mail at john@samclar.com.