“Why are so many furniture stores out of stock?” “Did furniture prices go up?” “How long will it take to have my furniture delivered due to COVID-19?” These are all questions we are hearing from furniture shoppers in 2021.
It’s been a little over a year since COVID-19 turned the world upside down. Over the past year, all of us have tried our best to weather this storm. COVID-19 and the resulting uncertainty has touched individual lives, but also interrupted business all over America and across the world.
Due to both the virus itself and mandated business closures, disruptions have torn through nearly every industry on the planet. There are the obvious examples like the shortages in paper products, hand sanitizer, disinfectants, and personal protective equipment. Beyond that, we’ve seen volatile shifts in the availability of meat, lumber, appliances, automobiles, the housing market, and more. (Don’t even get us started on our current gas shortage!)
Unfortunately, this disruption has impacted the furniture industry too. From retailers like us, to the furniture manufacturers, to the distant suppliers of raw materials and small components. The issues we’re seeing within our own supply chain are unlike anything we’ve seen in our 33 years of business.
That’s why today we’re having a frank discussion about the current state of the furniture business. Our goal with this article is to inform you of the problems with the global supply chain and explain what it means for you, the customer. Hopefully, by learning this information, you’ll be more knowledgeable and better equipped when you go to purchase your next mattress or piece of furniture.
But First…the Economics
First, in order to adequately explain what is happening in the furniture industry, we need to define a few economic concepts. That way we’re all on the same page.
Supply, Demand, & Scarcity
There are two primary factors when it comes to economics. Supply and demand. In essence, supply is how much of something exists, and demand is how badly consumers want it. Together, these market forces and their relationship drive almost everything. Everything from the availability of a product or service, to its selling price is determined by simple supply and demand.
But how does the law of supply and demand work? If a resource or product is in abundant supply, it is relatively cheap and easy to buy, right? That is because the supply greatly outweighs the demand. For example, take the simple #2 pencil. You can find them – and buy them – almost anywhere. That’s why they are so inexpensive. For that matter, do you remember how cheap gas was when everyone was quarantined and nobody really needed it? Demand vanished, supply skyrocketed, and prices fell. But what about when the opposite happens?
That brings us to scarcity. If demand for a product is way higher than its supply, it creates something called scarcity. This simply means that consumers want more of something than is readily available. For instance, when there was a run on toilet paper and paper towels last year, there was far more demand than there was supply. Anyone who went to the store and saw the barren paper product aisle understood immediately that those items were scarce. Unfortunately, increased scarcity usually means paying higher prices as well.
Specialization & The Division of Labor
Do you grow your own food? Create your own cleaning supplies, soaps or detergents? Did you frame your own house or build your own furniture? Probably not. A farmer, chemist, builder or carpenter likely did those things. And that’s okay! This is due to a phenomenon called division of labor or specialization.
Over the course of human civilization, people eventually realized that not everyone has the same set of skills. Instead of trying to grow our own crops, hunt our own food, and build our own stuff, we learned that it’s more efficient to do what we’re best at and then trade for everything else we need. Eventually currencies replaced bartering, but the principle remains the same. In fact, in the modern age, people (and companies) are more specialized than ever before.
Globalization
Globalization is a much more recent development than division of labor. Only over the last couple hundred years have we truly come to embrace the global economy. Thanks to vast technological advancements in the speed of transportation and communication, the world is a much, much smaller place.
In the past, businesses were forced to rely only on their local economies for materials and labor by sheer necessity. But now, the economy is truly a global marketplace due to technological advancement. For the first time in human history, it is feasible to order raw materials, products, or components from the far side of the world.
Supply Chain
A supply chain is the long process by which raw materials are acquired, crafted into products, and eventually transported to the places where they are sold. For an easy explanation, let’s go back to our pencil example.
As simple as it seems, a lot goes into making that small, cheap stick of wood, rubber and graphite. First, someone must cut down the cedar and rubber trees and mine the graphite. Then the factory purchases the cedar, graphite and rubber it needs to make a batch of pencils – likely from multiple suppliers. After the pencils are ready, a wholesaler or distributor buys them to resell to retailers. Finally, they are transported to your local store. Every single step in this process is a part of that retailer’s supply chain.
Just-in-Time Inventory Management (JIT)
The last thing you’ll need to understand is a business philosophy known as just-in-time manufacturing. First pioneered by Toyota, these principles are also known as just-in-time inventory management, or JIT for short. Among other things, JIT dictates that manufacturers shouldn’t stockpile large amounts of raw materials, components, or products.
Instead, as the name quite literally suggests, components and raw materials are ordered as the need arises. In other words, “just in time” for production to begin. By adopting a JIT system, businesses are able to cut out tons of wasted time, warehousing costs, and resources. Over the last 50 years or so, just-in-time has become the dominant methodology for many, many industries.
“Okay, Fine. But Why Does It Take So Long to Get Furniture Now?”
So why does any of this matter to you? Perhaps you’ve recently bought furniture and you are wondering, “Why is my furniture taking so long to arrive?” Or worse, you made a purchase and the seller wasn’t up front about the delays involved with ordering furniture in 2021.
Well, here’s the deal…
Each of the elements we discussed above (supply & demand, scarcity, specialization, globalization and just-in-time manufacturing) have played a role in our industry’s current supply chain problems.
The Furniture & Mattress Industry's Supply & Demand Problem
To start with, we have a serious supply/demand problem. When the pandemic first began, demand for furniture, mattresses and most other things dried up. Consumers were uncertain of the future and cut any purchases they deemed unnecessary. As a result, manufacturers using just-in-time principles decreased their production of furniture, mattresses and other home goods. To make matters worse, rolling closures of factories due to COVID outbreaks and regulations led to even less production.
But then came the sudden shift in consumer behavior. Thanks to quarantine, people were spending more time than ever in their homes and in their beds. So as economies began to stabilize and reopen, demand for furniture, mattresses, appliances, décor and anything related to home improvement skyrocketed. At first, that was a great thing - until supply ran out. Already behind on their production schedules and dealing with pandemic-related labor shortages, factories simply couldn't keep up with demand.
The result? Unprecedented scarcity. Severely limited stock at many stores. Longer-than-ever wait times for furniture orders. And of course, higher prices.
Why Furniture Isn't Arriving "Just-in-Time"
Under typical market conditions, JIT is very effective at maximizing efficiency, reducing waste, and saving money by helping businesses operate within tighter margins. Instead of having tons of money tied up in raw materials or inventory, companies make what they need as they need it.
But under the abnormal conditions of a global pandemic, just-in-time has become a weakness in the supply chain. Even Toyota, the pioneers of JIT, saw the writing on the wall and adjusted their own inventory practices.
Instead of having stock available to sell, warehouses are empty. Instead of having the raw materials and components on hand to quickly make products to meet increasing demand, manufacturers are having to order those things from their vendors as usual. But here’s the catch. Those suppliers are having supply chain issues of their own and it all runs down hill from there.
How Globalization & Specialization Are Contributing to Strained Supply Chains
Similarly, typically beneficial things like specialization and globalization have brought challenges of their own. Highly specialized manufacturing means that very few companies make everything from scratch. More likely, they purchase certain components from suppliers who specialize in making just that one thing. So how is that an issue?
Well, if a mattress maker can’t get springs from their supplier, they can’t finish their own products. What happens if your company makes bedroom furniture, but the vendor who supplies your drawer glides can’t deliver? Without functioning drawers, that beautiful dresser is just an exquisite collection of hardwood pieces. All it takes to break the supply chain and grind production to a halt is a single missing part.
Lastly, globalization means that companies are not always getting building materials from suppliers nearby. This is particularly true in our industry. Even the furniture companies making products here in America typically source some of their materials from overseas. This was never an issue in the past, but in 2021, it presents just one more hurdle between you and your furniture or mattress delivery.
Between new workplace regulations, labor shortages, backlogged work, and increased demand, the world’s ports aren’t faring much better than its factories are. Did you know that most major American ports have been experiencing delays? In March, there were as many as 22 massive container ships parked off Savannah’s coast waiting to unload their cargo. Ports on the west coast like Los Angeles and Oakland are even more bogged down. To make matters worse, there is now a global shortage of shipping containers. Additionally, there aren’t enough trucks and drivers in many places to transport the goods once they are unloaded.
What Can I Do About It?
As you can see, the current situation isn’t caused by a single issue, but rather a combination of factors. The result is a strain on our supply chain at every step of the process – from materials, to components, to manufacturing, to transport. So what can you do about it? It may not seem like much, but here are a few steps you can take.
First, try to inform yourself and set your expectations accordingly. Remember, unless you’re buying a floor model, most furniture or mattresses aren’t immediately available – even under normal circumstances. Unfortunately, the time from purchase to delivery has only grown due to the pandemic. We wrote this article because want you to know what’s going on in the industry. Because in our experience, informed customers have a much better furniture buying experience themselves.
Next, whether you are shopping with Woodstock Furniture & Mattress Outlet or elsewhere, don’t hesitate to ask questions before you buy. Make sure to ask any questions you have about availability or delivery. If your salesperson isn’t being up-front with you about the delivery timetable, they are setting you up for disappointment. So please, ask those questions!
The last tip is the most difficult – but please be patient. At times over the past year, we’ve found ourselves scrambling because a manufacturer gave us a certain timeframe that we shared with our customers, only to be informed of production delays after orders were placed. Understandably, customers weren’t happy. Despite our best estimates, we unfortunately still have many dates changing. We promise that we’re doing our very best to fulfill orders within a reasonable timeframe, but sometimes there are forces at work outside of our control. We ask that you keep this in mind as we all navigate these unprecedented circumstances.
WFMO: Still North Georgia’s Home for Better Quality Furniture at Lower Prices – for 2021 & Beyond!
Hopefully this article has helped explain why there are shortages, delays, and pricing shifts in the furniture industry in 2021. Despite everything, Woodstock Furniture & Mattress Outlet does still have a wide variety of furniture in stock. And if we don’t have it in stock, we commit to always give you our best estimate about your furniture or mattress delivery timetable. Come see us at our North Georgia showrooms in Woodstock/Acworth, Dallas/Hiram, and Rome, or our mattress stores in Canton, Kennesaw, and Douglasville!
