Who supplies the furniture sold at overstock stores like TJ Maxx?

by | May 20, 2018 | Furniture Costs, Furniture FAQs, Furniture History, Furniture Manufacturers, Furniture Stores | 0 comments

Up until the 1990s furniture manufacturers (in particular wood furniture manufacturers) were highly inefficient and frequently produced too much of some products.

These “closeouts” and “overstocks” were sold at deep discounts to small and mid-size retailers.

Large multi-store chains did not participate in this because genuine “closeouts” were never available in sufficient quantities to stock large numbers of stores.

Since that time manufacturers have become far more efficient. Orders are pre-sold before being made.

The result is that currently furniture factories (both domestic and overseas) rarely accumulate excess stock that needs to be dumped at reduced prices.

TJ Maxx and other major retail chains were never able to take much advantage of true closeout purchases.

Huge retailers need hundreds (or thousands) of a particular item to supply all of its stores. No furniture manufacturer could ever afford to generate that much “excess” product and dump it at a deep (genuine) discount.

Although a very small percentage of total inventory may consist of genuine closeout or overstock items, large multi-store retailers are generally restricted to purchasing from the limited number of mega-manufacturers who can produce the needed volume to supply all (or a large number) of a retailer’s stores.

There are very few rules regulating how furniture is priced. Establishing high “suggested retail prices” from which deep discounts can be created is usually pretty simple.

Because the quantities purchased are so large the largest retailers do get reduced pricing.

However, the discounts do not come close to the 50% off or more that is seen so frequently in retail furniture advertising.

Mass production of furniture is most efficient when huge quantities of the same product are produced.

As a result the big manufacturers try to sell very similar furniture to all of their customers.

Minor cosmetic differences in finish or ornamentation allow competing retailers to advertise different product models, making comparison shopping extremely difficult.

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Jeff Frank

Jeff Frank

Furniture Consultant

Jeff Frank is a 45 year  furniture industry veteran. He created this blog to provide detailed facts, inside information & advice for furniture shoppers. 

 

 

 

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