Over the past few months, we’ve seen an increase in furniture costs, businesses being forced to jack up prices, and these are caused by a variety of issues. Not only are these prices soaring because the shipping and times are longer, but there’s also a shortage of supplies and higher material costs.
All of these add up and that’s why we now see furniture prices soaring quite a bit recently. Importers and their business partners have been forced to whether an intense supply chain “storm” heading into 2022. In a recent CBC article, they explore why the furniture industry has been hit the hardest by these strange times.
Global trade community professionals have stated that this is something unprecedented. The issues at hand are more pronounced and widespread than they could have predicted. With that being said, material prices in particular have become super expensive too. Before the pandemic, a container would be $1800 for example, and now it’s $20000.
These costs are obviously adding up and it’s becoming more and more challenging for people in the industry to find the right way to assist and deliver the best quality at a low price. But how does this affect customers exactly? Well, due to these challenges and increased costs, all those extra prices add up to a 10-15% increase very shortly. And it’s even possible for these prices to go up even more than this.
In the CBC piece, Retail Consultant, Rick Bohonis stated:
“Those prices are going to continue to rise just because furniture companies will no longer sit on the price increase to them without passing it on to the consumer”
It’s definitely going to be quite the challenge at first, but in the end it all comes down to the problems that the pandemic brought to the table. Plus, the manufacturers won’t just deal with a loss. They are passing the extra costs to the buyers, and that’s why we are bound to see quite the price increase sooner rather than later.
Even chains like IKEA stated that their prices will go up with around 9% or even more. They are increasing costs due to raw material shortages and transportation costs that have become increasingly higher. Aside from all of that, the other issue at play right now is the fact that shipping is also taking quite a bit more time. Something that would take up to a month, maybe a month and a half is set to be delivered in 6 months.
All of these things are obviously bad for businesses, but also for people that actually want to buy furniture and not overpay for it. Unfortunately, the costs are so high right now that unless you really want to buy furniture, it’s a good idea to postpone. Analysts are stating that these problems will continue in 2022 as well, and we never really know what issues and challenges might arise.
With that being said, the truth is that manufacturers will always pass the extra costs to the consumer, that’s a given. So the only thing we can do at this time is to understand what causes the issue and just postpone buying if we want a lower price. If not, there are options, but they do come with delays and higher costs. It all depends on how urgent it is to buy new furniture for your home. Needless to say, these challenges are very problematic for the entire furniture industry, and we hope that they will stop soon.
For help weathering the storm into 2022, a customs broker can be a key partner for success. To get the conversation started, click here.