Questions From The Road

From Mazatlan, sitting by the pool, I finally found time with Beverly to discuss the business: 

We changed our Landfair Furniture + Design Gallery website to rank higher so consumers of furniture and accessories could find us and generate more traffic to our site and more business. So now we have a problem that I’m hoping that you can help us solve.

Most of our inquiries come from consumers from around the country seeking price information and are surprised at the price of a Sherrill or Duralee sofa. We did have one inquiry from Seattle seeking a price on two leather Motioncraft chairs. We quoted him a price that was 30% off retail and he came back saying he found a place locally $700, fully a third, cheaper than our price. That price would be a 33% margin, excluding freight.

Now, I know that online furniture and accessory sales account for about 4 to 5% of total retail sales, yet online sales are growing at a double-digit rate. I changed the website to capture a piece of online sales. What good does it do us to have a website that accepts inquiries, if we are not going to match prices with other online furniture and accessory sellers?

Beverly asks, “Why should I sell anything to anybody in the country at 45 to 50% off retail when that’s what my clients, interior designers, get?” I don’t disagree, but I wonder if the paradigm is changing. Will the online businesses destroy the margins of the brick and mortar stores? Will the furniture stores business model, under the influence of the internet, go the way of CDs and books?

What I really am asking is, “How do we compete online and how do we convert inquiries to sales. How do we handle the delivery problems and the freight damage and returns all on a 33% margin before freight? Some online sellers don’t even charge for freight!

Beverly says that those consumers seeking our products, based strictly on the best price, may not be loyal and could be hell to satisfy. She also asks, “Where will the sofa be received that we sell and what sort of policies do we need to protect our small margins?”

We welcome your thoughts.  You can comment directly, email me at landfair3554@comcast.net or follow me @landfairfurnitu