When Jake Jabs made his move into furniture retailing a generation ago, he committed to a course that was a struggle at first, but eventually gave American Furniture Warehouse a competitive pricing advantage.
“I made a decision 30 years ago, a conscious decision when I bought the company, to go container direct with offshore manufacturers,” said Jabs, the chief executive officer of the Thornton, Col.-based retailer. “It took years of hard work and mistakes.”
While numerous retailers accept container shipments through their vendors, Jabs was a pioneer among furniture stores in developing regular shipments directly from factories abroad, a move that led to cost savings on merchandise, but threw all the logistical burden of importing that third-party vendors typically assume right onto AFW.
“I’ve been doing this a long time, and it’s still not easy to get a true cost,” Jabs said. “A lot of people always seem to have their finger in the pie—agents, finder’s fees.”
Whether factory-direct or landed via a third-party supplier, incorporating direct container import shipments into their operations is a fact of life more furniture retailers, including some small- and mid-size operations that might have balked a few years back at receiving so many goods at once.
Factory direct shipments present particular problems to retailers new to the strategy.
“It looks a lot easier than it is,” said Gil Sturtzel, vice president of purchasing for Davis International, an upholstery manufacturer that expanded its Asian sourcing program for occasional furniture to complement its core line to include case goods. “You have to beware of buying someone else’s mistakes if you go direct—something a factory is just trying to unload.”
Sturtzel also said retailers don’t have quality-control on the ground in Asia—American Furniture Warehouse is among the exceptions, with its own office in China—and that controlling product flow is very difficult with direct imports. Retailers don’t have a lot of recourse, either, especially when dealing with a new source thousands of miles away.
That’s not only according to vendors, but also retailers like Jabs.
“You have to have the money to put up in advance, and once the goods are on the way, you can’t shut it off,” said Jabs, who noted he has five days to unload a container before paying storage charges. “I had to run a sale one time because I had 100 containers I needed to unload.”
“I made a decision 30 years ago, a conscious decision when I bought the company, to go container direct with offshore manufacturers,” said Jabs, the chief executive officer of the Thornton, Col.-based retailer. “It took years of hard work and mistakes.”
While numerous retailers accept container shipments through their vendors, Jabs was a pioneer among furniture stores in developing regular shipments directly from factories abroad, a move that led to cost savings on merchandise, but threw all the logistical burden of importing that third-party vendors typically assume right onto AFW.
“I’ve been doing this a long time, and it’s still not easy to get a true cost,” Jabs said. “A lot of people always seem to have their finger in the pie—agents, finder’s fees.”
Whether factory-direct or landed via a third-party supplier, incorporating direct container import shipments into their operations is a fact of life more furniture retailers, including some small- and mid-size operations that might have balked a few years back at receiving so many goods at once.
Factory direct shipments present particular problems to retailers new to the strategy.
“It looks a lot easier than it is,” said Gil Sturtzel, vice president of purchasing for Davis International, an upholstery manufacturer that expanded its Asian sourcing program for occasional furniture to complement its core line to include case goods. “You have to beware of buying someone else’s mistakes if you go direct—something a factory is just trying to unload.”
Sturtzel also said retailers don’t have quality-control on the ground in Asia—American Furniture Warehouse is among the exceptions, with its own office in China—and that controlling product flow is very difficult with direct imports. Retailers don’t have a lot of recourse, either, especially when dealing with a new source thousands of miles away.
That’s not only according to vendors, but also retailers like Jabs.
“You have to have the money to put up in advance, and once the goods are on the way, you can’t shut it off,” said Jabs, who noted he has five days to unload a container before paying storage charges. “I had to run a sale one time because I had 100 containers I needed to unload.”
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