Procuring furniture and accessories for your clients positions your company to make higher profits.
Understanding how and why manufacturers and distributors structure their pricing tiers the way they do will help you decide where in the structure you want to place your company.
Not all have the same set of structures, but for simplicity, let's assume they have set a suggested retail price and start there.
These pricing structures and policies protect the manufacturer's brand image and product value by hampering pricing wars and help businesses compete fairly.
Generally, furniture manufacturers and distributors offer a "trade-only" or "designer" discount to interior designers and decorators that hold accounts, which allows them to get their clients pieces at online market prices. These discounts vary from vendor to vendor, ranging anywhere from 20% off up to 35% or 40% off.
The problem, however, for designers and decorators operating online is this doesn't allow for much profit, if any, to be made. When shipping fees are added to the designer discount price, more than likely, the client can find lower prices online that would include shipping fees.
A "designer" discount brings the purchase price down to the IMAP level, which is the amount online retailers sell the products for, the online market price. Therefore, the online designer can't compete and doesn't make any profit.
Online retailers use affliliate programs as a marketing tool to drive sales, much like hiring a sales representatives for a brick-and-mortar store. Commissions on furniture are as low as 2%, but average around 4% to 5% on the online retail price.
The problem is, these earnings are extremely small for the time, and efforts designers spend leading their clients down a retailer's sales funnel.
Affiliate commission can be an unstable and inconsistent stream of revenue for online designers and decorators. Clients may forget to use the link, or restrictions may apply that deem commissions unapplicable.
Bello Lane Procurement
We founded Bello Lane Procurement to create a better income strategy for e-designers.
Operating on a profit-sharing model, we share the net profits from wholesale to retail.