The furniture industry is trapped in a vicious cycle, driven by low entry barriers and intense competition. Over the years, this sector has seen an influx of companies with weak financial backing, outdated management practices, and substandard production quality. These businesses have flooded the market with cheap products, creating a chaotic environment where price wars dominate. As a result, even second-tier brands have been forced to lower their standards to stay competitive, accelerating the decline of the entire industry.
Behind these price cuts lies a reduction in product quality, which ultimately harms the market and erodes brand reputation. In project bidding, companies often undercut each other to win contracts, sometimes offering prices below cost. This not only leads to poor-quality work but also makes it impossible for businesses to remain profitable. The resulting pressure forces manufacturers to compromise on quality, leading to shoddy products that damage consumer trust and create long-term harm for the industry.
Moreover, many new furniture factories lack proper quality control systems. Basic inspection roles are often missing, and quality assessments rely solely on the experience of workers. This lack of structure allows defective products to reach the market, putting dealers, consumers, and the industry as a whole at risk. Eventually, manufacturers face consequences such as complaints, returns, material waste, and even bankruptcy.
Another challenge is the tendency for companies to split or fracture as they grow. Initially, small-scale enterprises often operate through joint ventures due to limited resources. However, as the business expands, conflicts over profits and control can lead to internal divisions. Former partners may break away, forming new companies that compete aggressively, often at lower prices. This increases the number of market players, intensifies competition, and creates a more unstable industry landscape.
Expanding too quickly without proper planning can also be detrimental. Rapid growth often leads to imbalances in production and sales, causing stress for both dealers and manufacturers. When companies focus solely on short-term gains, they neglect long-term stability, leading to issues like poor employee relations and a growing gap between management and workers. Without structured operations, businesses struggle to maintain efficiency and consistency.
Furniture is a unique product, and its complexity makes it difficult for smaller companies to scale effectively. Unlike industries such as flooring or ceramics, furniture sales are typically based on custom orders, making standardization challenging. This “zero inventory†model means that manufacturers must constantly adjust to specific customer needs, which can be risky. Small businesses often find themselves caught between the fear of no orders and the pressure of large ones, making it hard to sustain operations.
In this environment, only those who understand the industry’s nuances and manage their growth wisely can thrive. The key to breaking the cycle lies in maintaining quality, building strong brand value, and avoiding reckless expansion. By doing so, companies can create sustainable success and help lift the entire industry out of its downward spiral.
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