Furniture Vendors Price Tiers ExplainedJanuary 11, 2022 7:20 pm Leave your thoughts
Furniture Vendors Price Tiers Explained
The ambiguity of Furniture Vendor price tiers is one of the main reasons The Designers Collaborative (TDC) exists and thrives by helping interior designers from all across Noth America. Being granted the best price tier is hard to obtain as a small interior design firm, and harder to keep year after year. We share our collaborative knowledge here on price tiers as we strive to offer the best pricing to our Members while remaining transparent as possible.
Each Furniture Vendor has different account requirements for opening orders or buy-ins and annual purchasing volumes to achieve or maintain the best price tier.
Additionally, many Furniture Vendors leave the decision up to their Sales Representative on whether to grant the best price tier to an account applicant. Vendor Sales Reps usually don’t grant every account applicant the best pricing; there is a lot they consider beforehand: other accounts in your area (market saturation or competition) and what those accounts may offer the Trade (access to product and/or Trade pricing in their showroom), for example.
Some Furniture Vendors and Sales Reps require the applicant have a showroom, buy $X amount of product and showcase that product on the selling or showroom floor before granting an account.
Vendor Sales Reps may be employees of the Vendor (representing ONLY that Vendor, with annual sales quotas to meet), or they may be an independent contractor (representing MANY Vendors and dependent upon the commissions they make from Vendor sales for their income).
For these reasons and lack of Furniture Vendor price tier uniformity, it is challenging to define pricing tiers. We will do our best. Keep in mind there are always exceptions to the rules.
FURNITURE PRICING TIER TERMS
Designer Net – most common discount that is offered by retailers and wholesalers (for example: your local Trade Showroom or Design Center); also called “Trade Pricing” or “To-The-Trade.” The discount may vary greatly from 5% to 30% off established/printed retail prices. Your price with this discount can be the same as what is offered via online re-sellers like Wayfair, and may be similar to iMAP pricing (iMAP or similar means “internet Minimum Advertised Price”). Be aware and do your homework.
Wholesale – less common discount that is offered by the Vendor directly (by opening your own account); also called “Trade Pricing” or “To-The-Trade.” The discount usually means 50% off established/printed retail prices.
NOTE – nearly ALL fabric and wallpaper Vendors offer wholesale (50% off retail) pricing to the Trade and one price tier UNTIL the account reaches $X a year in sales. Then, one may qualify for an additional discount (say 20% or 10%). If the account reaches the next tier in annual sales, then there may be an additional discount (say 15% or 5%). There are exceptions. For example, one Vendor requires investment in their fabric or wallpaper books to achieve the best pricing tier. For these reasons, TDC offers only a few Vendors in the fabric and wallpaper categories.
Stocking Dealer – rare and maybe the best price tier achievable directly with the Vendor. The discount usually means 60% (or greater) off established/printed retail prices. This pricing tier is granted with a big opening order and high annual purchasing volume ($50K or higher).
Uniquely-Named Price Tiers – there are plenty of uniquely-named price tiers, but they function similar to the above. For example, “Emerald” pricing tier is used instead of Designer Net; “Sapphire” pricing tier is used instead of Wholesale; and “Diamond” pricing tier is used instead of Stocking Dealer. One Vendor has no opening order requirement with SEVEN (7) pricing tiers based on annual purchasing volume.
Container or Volume – blue unicorn rare and maybe the best price tier achievable directly with the Vendor when a container full of product is purchased. The discount usually means greater than 70% off established/printed retail prices. A standard container is a 40’ long x 8’ high x 8’ wide jam-packed with product (853+ cubic feet); the same container you see truckers or 18-wheelers toting behind them and what is transported on trains and ships. Many big-box stores purchase at this price tier.
OPENING AN ACCOUNT WITH A VENDOR
The standard process for opening an account with a Vendor is fairly straightforward – they want to know who you are, what kind of business you run, who you Bank with and the details, how long you’ve been in business, how much business you do annually and who else you may have an account with (usually a Trade Reference or some other business that can verify your “good” business and payment practices).
As the Vendor will usually not charge sales tax on your purchases, you will be required to submit your State-issued Sales Tax Exemption Certificate or Re-Sale Certificate; for those five (5) States with no sales tax, your State-issued Business Registration Certificate may be required.
Many Vendors may share an account application on their website to complete. Others may offer a downloadable form to complete and submit. Some Vendors have to be called to ask an account application be emailed. And lastly, some Vendors may require you to connect with their Sales Rep to discuss opening an account (that means the decision to open an account or not is in the hands of the Sales Rep).
When you talk with the Sales Rep or the Vendor about opening an account, ASK QUESTIONS:
“What are your price tiers?”
“What is the opening order requirement for your best price tier?”
“What is the annual volume required for your best price tier?”
NOTE – Vendors and Sales Reps like to know who they are doing business with. Opening Accounts while at High Point Furniture Market or other Trade Shows can make for a smoother process. By attending, you show your professionalism with your investment of time and money and showing up!
To allow your interior design firm the most creative freedom at the best price tier Join TDC and gain access to over 300 furniture, lighting, rug, accessory, and even kitchen and bath vendors! Thrive Together and Join Today HERE.Tags: buying group, furniture, interior designer, the designers collaborative
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