When you buy retail, you buy at an inflated price. Yet, more and more clients want to buy retail. They want their furniture quick and easy. Not to mention cheap. But what they (and you) may not realize is that you're likely paying a much bigger "markup" on retail compared to the quality that you get than to-the-trade sources.
Usually when buying to-the-trade the cost to quality ratio is much better. Clients get more for their money. They'll be paying a smaller markup to the designer rather than a large markup to the retailer.
To-The-Trade Is More Complicated
I don't have all the answers. I don't know what the answer is to clients feeling more comfortable buying from retail spots than trade sources. I know it's easier, it's usually easier for the designer as well. Everything is online, you make your selection, enter your credit card info, get an estimated delivery date and wait for your piece to show up. You can make returns. (But remember even retailers with custom fabric programs don't accept returns on those orders.)
As opposed to to-the-trade where you have to set up an account, select finishes, fabrics, and other details, get a quote, send a check or fill out credit card authorization form, often get a separate quote for delivery, have to arrange delivery to a receiver, and then wait for your piece to show up - usually 10-16 weeks later. It is more complicated, there are more steps. There are no returns.
But those additional steps are about additional customization, a piece of furniture that is specially created for the client's home. It seems many clients don't mind the homogenization of design, they don't mind having the same sofa or the same pillows as their neighbor or a photo on Instagram. They want their home to look just like the catalog or the HGTV show. I also don't know what the answer is to this, except for designers to keep pushing their original designs.
It is hard to overcome client's not being able to see the completed piece that you'd order from a to-the-trade source. With all that additional customization, it is harder to imagine walnut turned legs when the image shows block pine. Or a dressmakers skirt vs no skirt. Or three cushions vs a single seat. When you shop retail you can look at the exact sofa you're going to receive, but that may not be the case for to-the-trade sources. Pro Tip: Get a good renderer that can provide a visual rendering of the piece usually in the room to help sell the client.
Retail vs To-the-Trade Pricing Example
You can give clients examples of why buying retail isn't the best option that will help them understand why they should allow you to shop and purchase from your sources.
- Here is a sconce from retailer for $598 retail.
- They also have a trade discount of 20%, so the trade price from this retailer is $478.40.
- You can buy this same sconce from other online retailers for $399.
- With a trade account, you can buy this sconce direct from the manufacturer (to-the-trade) for $190.
- So that means that the first retailer is marking up this light at least 315%. They likely get the sconce even cheaper as a stocking dealer, so that percentage is probably higher.
- Even if you marked up the sconce purchased from the manufacturer 30% (as seen in graph below) the price to client would be $247.00. This is a savings off retail of $351 or $152 depending on which retailer you purchase from. You get a markup and the client gets a price cheaper than retail.
So this is an extreme example of the difference between buying from retailers and buying to-the-trade. This should be a good place to start to find your own examples that you can take to your clients when they want to buy everything retail.