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In this article, we’ll guide you through the intricacies of furniture inventory management, highlighting the challenges and opportunities in the furniture warehousing industry. By the end of your read, you’ll grasp how modern warehouse management systems, like Deliverr, can significantly enhance the efficiency of furniture retailers, helping them navigate the complexities of inventory fluctuations, consumer preferences, and the ever-evolving “Amazon effect<\/a>.”<\/p>\n Key Takeaways:<\/strong><\/p>\n If you\u2019re offering warehousing services to furniture retailers, you\u2019re servicing a lucrative market. Today, the global furniture industry is worth an estimated $545 billion, and that number is expected to grow to $654 billion by 2025.<\/p>\n <\/p>\n For all its rewards, serving the furniture warehousing industry has its share of challenges, particularly when it comes to furniture inventory management. As a result, many furniture retailers outsource their warehouse management to expert third parties.<\/p>\n If you\u2019re a 3PL that offers other services like forecasting and outbound logistics, your furniture customers will lean on you more heavily for support managing their supply chain.<\/p>\n Your customers \u2014 the furniture retailers \u2014 have to keep up with trends, predict which styles will be popular, quickly sell products that are sinking in demand, and more. They also need to keep enough items in stock so they don\u2019t lose out on a sale while simultaneously minimizing excess furniture inventory that ties up their capital.<\/p>\n A sophisticated warehouse management system (WMS) with an integrated furniture warehouse management features can help warehouse owners and effectively and profitably support furniture retailers.<\/p>\n The best practices we discuss here will also apply to furniture retailers looking to manage their warehousing and logistics needs independently.<\/p>\n <\/p>\n In this guide, we\u2019ll help you understand:<\/p>\n <\/p>\n Furniture is large, heavy, and bulky, which makes it challenging to store and ship. A furniture warehouse and inventory management software allows a warehouse owner or warehouse manager to optimize their warehouse layouts<\/a> and store furniture more easily. It does this by:<\/p>\n When you\u2019re dealing with large, bulky items, relying exclusively on human labor for the putaway and picking process is inefficient at best and a health and safety hazard at worst<\/a>. A warehouse management system provides the foundation for other automation tools like a warehouse control system or warehouse execution system. In fact, many furniture warehouses use automated tools like forklifts or other warehouse technologies<\/a> such as rail-guided automated storage and retrieval systems (AS\/RS) to speed things up and reduce risks to their workers.<\/p>\n If your warehouse or 3PL business is interested in entering this niche, you\u2019ll need a WMS and its add-ons to serve your customers properly and to keep your own operation running smoothly and safely.<\/p>\n Furniture is a discretionary purchase. Not only does this affect consumers\u2019 willingness to shop \u2014 furniture sales go down when money is tight \u2014 it also affects what they buy. Trends and styles in the furniture industry change fast.<\/p>\n In fact, this is how Wayfair, the multi-billion-dollar home decor ecommerce giant, made its mark. Unlike most furniture stores, it doesn\u2019t carry furniture inventory. What made it successful was using data analytics to understand what consumers were searching for online.<\/p>\n It then used those insights to build relationships with hundreds of third-party websites that supply the products Wayfair markets. Eventually, the company consolidated its ecommerce presence and wrapped it into the Wayfair brand. Today, Wayfair works with 11,000 suppliers to execute its dropshipping model.<\/p>\n As a business owner, you have access to a wealth of data. With these insights, you can offer value-added services that give furniture retailers an advantage against their competitors. With the data generated from your furniture warehouse and inventory management software, you can provide detailed furniture inventory management reports that highlight which items are most popular and in which particular styles, colors, and materials.<\/p>\n Your furniture retail customers can use your reports to make smarter purchasing decisions like:<\/p>\n That last point is particularly useful to retailers and their marketing teams, which we\u2019ll discuss in the next section.<\/p>\n Recall our earlier use of Wayfair as an example. As discussed, Wayfair uses a dropshipping business model. Rather than carry furniture inventory, it partners with the suppliers whose products it advertises on its site. The Wayfair site uses advanced data analytics techniques to catalog products consumers are interested in. When a consumer places an order, Wayfair places an order with its supplier.<\/p>\n The pros of this furniture inventory management strategy are clear. Furniture is large, so it\u2019s expensive to store, increasing a retailer\u2019s warehousing<\/a> costs. Furthermore, fast-moving trends make it difficult to predict what consumers want. Predict wrong, and you\u2019ll be carrying a lot of expensive furniture you can\u2019t sell.<\/p>\n Instead, with a dropshipping model, the upfront investment is minimal. You spend most of your initial capital on marketing and advertising and only pay for the product when you make a sale.<\/p>\n Let\u2019s take a look at this model from the perspective of your customer: the furniture retailer. For them, there are cons to using dropshipping as a furniture inventory management strategy. The first disadvantage is shipping times. While Wayfair has the funding and the support to offer various shipping options, most dropshipping companies take weeks to deliver their products to customers.<\/p>\n There\u2019s also the issue of quality control<\/a>. Since they never hold the inventory, they don\u2019t get a chance to inspect it. As a result, its customers may receive a bed or a sofa that\u2019s not as advertised. This erodes customer trust and loyalty over the long term.<\/p>\n Finally, there\u2019s the issue of vendor relationships. A smaller company doesn\u2019t represent a significant amount of a manufacturer\u2019s business. While a furniture manufacturer will work hard to satisfy a large company, they typically won\u2019t bend over backwards for smaller brands. This means that your retailers\u2019 manufacturers will be less likely to accommodate things like expedited deliveries, dispute resolutions, or returns.<\/p>\n That said, furniture retailers can still benefit from data analysis techniques. If retailers have access to granular data about which products have been sitting on the shelves too long, they can use it to design promotions.<\/p>\n Let\u2019s assume a company has dozens of glass coffee tables in its warehouse. If it doesn\u2019t have experts tackling its furniture inventory management, it may not realize this excess stock exists until someone in their finance department flags it. By that time, it\u2019s likely too late to move the products.<\/p>\n On the other hand, a warehouse manager or a 3PL is constantly monitoring data. With the right tools, it can flag this decrease in sales of glass dining tables and much sooner. This information can be quickly transferred to the furniture retailer\u2019s marketing team who can then create a campaign focused on selling that product as quickly as possible without losing too much money. Perhaps they\u2019ll use digital ads, free shipping promos, and other strategies.<\/p>\n This approach can also be used to adopt a semi-dropshipping model.<\/p>\n Let\u2019s say your furniture retail customers want to expand into a different product category, but they\u2019re hesitant to adopt the risk.<\/p>\n As a warming up strategy, they could carry a limited supply of the product in their inventory and work closely with the marketing department to advertise the product and gauge interest.<\/p>\n If their furniture inventory management partner can provide data reports and visualizations, furniture retailers can direct their inventory partners to automatically order or ship more of the product once orders hit a certain volume.<\/p>\n <\/p>\n BONUS:<\/strong>\u00a0Before you read further,\u00a0our team has put together a simple\u00a0safety stock calculation excel\u00a0that helps you identify how much inventory to carry for each of your products.\u00a0Download safety stock calculator Excel here.<\/a><\/p>\n Like most ecommerce industries, the furniture sector has been hit by what\u2019s known as the \u201cAmazon effect.\u201d Customers buying a couch online expect the same enhanced customer service they receive when they buy school supplies from Amazon.<\/p>\n This includes fast delivery, free shipping, easy returns, and track and trace capabilities, so they can keep tabs on their product in real-time. Despite the complexity and difficulties of tracking furniture, customers expect a similar experience.<\/p>\n Warehouse operators can help furniture retailers keep up with the Amazon effect by offering excellent furniture warehouse management. If you can quickly and efficiently receive orders, pick them from their warehouse locations, and ship them to the retail store or customer, your operation offers tremendous value.<\/p>\n How you structure your warehouse operations ultimately depends on the type of furniture retailer you\u2019re servicing. Some furniture is ready-made, requiring automated solutions to move it throughout the warehouse, as discussed earlier.<\/p>\n On the other hand, some companies offer what\u2019s called knock-down or ready-to-assemble furniture. This type of furniture is shipped to customers in parts and customers are required to assemble the product themselves.<\/p>\n In this case, your warehouse can use a combination of forklifts and manual labor and your WMS will help you optimize this process by enabling strategies like:<\/p>\n [\/et_pb_text][\/et_pb_column][\/et_pb_row][et_pb_row _builder_version=”4.22.2″ _module_preset=”default” width=”auto” custom_margin=”15px|auto|15px|auto|false|false” custom_css_main_element=”.hbspt-form .legal-consent-container a {|| color: white !important;||}” locked=”off” global_colors_info=”{}” global_module=”26788″ theme_builder_area=”post_content”][et_pb_column type=”4_4″ _builder_version=”4.22.2″ _module_preset=”default” use_background_color_gradient=”on” background_color_gradient_stops=”#481a96 0%|#200741 100%” custom_padding=”15px|35px|15px|35px|true|true” border_radii=”on|10px|10px|10px|10px” global_colors_info=”{}” theme_builder_area=”post_content”][et_pb_text _builder_version=”4.22.2″ _module_preset=”default” header_3_text_color=”#ffffff” header_3_font_size=”30px” header_3_font_size_tablet=”30px” header_3_font_size_phone=”20px” header_3_font_size_last_edited=”on|phone” global_colors_info=”{}” theme_builder_area=”post_content”]<\/p>\n [\/et_pb_text][et_pb_code _builder_version=”4.22.2″ _module_preset=”default” text_orientation=”center” global_colors_info=”{}” theme_builder_area=”post_content”]\n
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How Can Furniture Inventory Management Software Provide Better Inventory Management?<\/h2>\n
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How Can Warehouses and 3PLs Add Value for Furniture Retailers?<\/h2>\n
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How Can Warehouse Systems Support a Retailer\u2019s Furniture Sales and Marketing Strategy?<\/h2>\n
The Semi-Dropshipping Model<\/h3>\n
How Does Effective Furniture Warehouse and Inventory Management Software Help Furniture Retailers Keep Up With the \u201cAmazon Effect?\u201d<\/h2>\n
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Request a free demo to learn more about Logiwa WMS.<\/h3>\n