Why Are The Furnitures in Australia So Expensive?

pilotyuan on 06/06/2018 - 12:16

My story:

Recently I was looking for furnitures for my new home.

I was looking for some stylish furnitures but somethings I didn't understand.

All furniture shops are show rooms only and the lead time is usually 12 weeks. Pretty much make to order in some overseas factories.

However the mark up seems so high, for example:

A nice coffee table like this is $995, exclude delivery. No discount availble.
https://curiousgrace.com.au/collections/coffee-tables-side-t…

If I order from a China factory and get the item forwarded to my Australia address, I would have been looking for $500 max deliverred.

I understand the store needs to pay rent, staff and GST. But wasn't a 100% mark up is too high in their business model?

What am I missing something here?

Home & Garden

Comments

    • pilotyuan on 06/06/2018 - 16:03

      Was driving pass the store everyday when I worked Mel but didn't bother to check it up.

      Is it still there or turned into apartments already?

      • kahn on 06/06/2018 - 19:12

        Still there (Brunswick) after all these decades.

      • MessyG on 07/06/2018 - 17:07

        Still there, dying slowly.

    • SlartiBartFozz on 07/06/2018 - 14:24
      +11

      "Gran sale! Gran sale! Gran sale! Where? In Brunnaswick and Footisgrey. Franco Cozzo ave(a) da pleasure to-a presenta to you "Il Modernissimo" Bedroom Suites, dining room and wonderful lounge Why don't you come for yourself and 'ave a looka this magnifico Il Modernissimo. Only can found from Franco Cozzo Buy from Franco Cozzo."
      "Megalo!, megalo!, megalo! xepoulima ston Franco Cozzo Trapezaria, krevatokamares, salonia, karekles, apo ton Franco Cozzo. Elate na agorasete apo ton Franco Cozzo. In Brunnaswick and Footisgrey nagorasita Franco Cozzo. Franco Cozzo per la prima volte in Australia dichiara guerra, guerra ai prezzi, Grande Svendita! Dove? a Brunnaswick and Footisgrey. Se i migliori mobili volete comprare, oggi, domani, sempre, da Franco Cozzo dovete andare. Dove? a Brunswick and a Footscray. Comprate da Franco Cozzo."

      Got to love|hate that interminable TV ad from the 80s, almost as much as I hate Rococo Revival furniture!!

      • Hahuh on 07/06/2018 - 19:35
        +1

        Do people buy from this guy? His "style" is only palatable by an aging populace. Can't imagine anyone <40 looking at anything remotely in that realm for a piece to decorate their home with.

        • SlartiBartFozz on 21/06/2018 - 23:14

          I suspect it was popular with new migrants from Greece & Italy who were buying that hideous crap back in the 70s and 80s, then in the 90s Central Europe and Baltic states ?, but successive generations become more educated and affluent, and commonly shift their aethetic from their parents kitsch to contemporary, considered options. Today the market for Franco Cozzo is likely to be Sudanese migrants and those same Greek/Italian nonni e nonne who liked that insipid trash in the old days.

      • PopCounty on 08/06/2018 - 08:53
        +1

        https://youtu.be/6aTO6Iv4f3A

    • FittyFitty on 09/06/2018 - 20:08
      +2

      Cozzos shit is morbid chic; reminds me of the Italian section of the cemetery… Bloke should be in the coffin business.

  • ajwhi on 07/06/2018 - 08:42
    +3

    I too came across expensive furniture in my recent browsing of various stores. I'm definitely not the kind to look for "designer" furnishings but even a place like Amart which is known for their low prices, was not inexpensive in my opinion. And this was for coffee tables/TV units that were made from low quality materials.

    I ended up going to Focus on Furniture for our couch, solid materials (support underneath was a concern of my fat ass) and my fiance says it's stylish. Spent around $1200 for a 5 seater L shaped fabric design.

    For the TV unit, coffee table, large dining table with 8 chairs and an extra storage unit thing we paid $2700 delivered.
    They look awesome and are made of SOLID wood which is well finished and put together. We bought these items from Early Settler.

    Buying new (especially designer) is going to cost you, know where to look and what you are willing to compromise on :)

    • Hahuh on 07/06/2018 - 19:31

      Our living room furniture is from these guys. We like the styling despite the stitching error on one of the sofas. Good quality too for the price.

    • pilotyuan on 07/06/2018 - 23:14
      +1

      Well done! Thanks for sharing. I spent most of the money in the living room as my house looks a bit old. I want some modern pieces to bright it up.

    • od810 on 09/06/2018 - 10:59
      +1

      Yea, Focus on Furniture is decent. Slightly more expensive than IKEA but quality is a lot better.

    • ellave on 09/06/2018 - 14:23

      Currently sitting on my 5 year oldish sofa from Focus that is falling apart waiting for my Curious Grace sofa to be delivered

  • TransportPosters on 07/06/2018 - 09:57
    +2

    Hmm, I don't know. Maybe make your own like I did. It is twice the size of that $995 unit, for about $40 to $50 in materials from Bunnings.

    • [Deactivated] on 07/06/2018 - 15:31
      +1

      How much do you value your time at? How much did the tools cost to make the table? What would the resale value be on a DIY item? Consider all these and other factors and a $995 table doesn't seem that bad value to me.

    • zhenjie on 07/06/2018 - 16:45

      $50 wouldn't even cover the cost of the American Walnut wood required for 1/4 those legs.

    • pilotyuan on 07/06/2018 - 23:40

      Good point,but my handy skills are indeed questionable

    • johnno07 on 08/06/2018 - 07:19
      +3

      I feel like $40-50 wouldn't even cover the cost of a plywood build.

      • cathole on 09/06/2018 - 15:53

        Yeah this guy's full of it. Maybe you could get the glass top off gumtree for that much or get lucky and find it in a dump.

  • Rob-4x4 on 07/06/2018 - 10:18
    +2

    Not only furniture. Markup on Cars from the landed cost including taxes and shipping to dealer RRP is usually around 100 percent …

  • andylch on 07/06/2018 - 12:46
    +3

    Generally the local furniture stores make up 10x compared to the same item you can find on Taobao.

    • andylch on 07/06/2018 - 15:47

      mark up

    • pilotyuan on 07/06/2018 - 23:04
      +1

      Right, but international delivery is not cheap for bulky item. Needs to put that in mind.

      • andylch on 07/06/2018 - 23:09

        Help your friends buy several items and you can virtually get free shipping.

  • Bargain4Days on 07/06/2018 - 13:46
    +9

    If you dont mind second hand furniture, check out gum tree or ex lease business, a lot of solid furniture on gumtree, seen solid hardwood dining tables for free, you just need a van to pick it up, they seem to think that ikea furniture are more solid and more stylish than solid hardwood furniture….

    I pick up quite a bit of furniture on gumtree for free or less than <100, so yeah its worth a check

    • smpantsonfire on 07/06/2018 - 18:04
      +2

      Not sure why you were dv. But this is exactly what I do. Get real good quality furniture from Gumtree where someone has paid the $10k price tag and you're paying 1/10th of that.

      • idonotknowwhy on 08/06/2018 - 14:10

        I was tempted to dv for "gum tree" because it looks annoying, but the advice is good so I uv'd

    • pilotyuan on 07/06/2018 - 23:02

      Total agreed, I bought a dinning table through Gumtree which I thought it was a steal. But for a coffee table I was struggle to find some suitable one.

  • sghetti on 07/06/2018 - 15:32
    +2

    Plumbers, then Dentists, now furnitures. When will this madness end! The elderly won't ever be able to afford good furnitures with terrible prices like this!

    • CocaKoala on 09/06/2018 - 19:26

      Just wait for the toilet paper thread.

  • ego22 on 07/06/2018 - 16:42

    I, i just cant get passed "furnitures"

    • johnno07 on 08/06/2018 - 07:20
      +8

      *past

      • ego22 on 08/06/2018 - 09:35
        -3

        Woooshh

    • CocaKoala on 09/06/2018 - 19:26
      +2

      i just cant

      *I
      *can't

  • zhenjie on 07/06/2018 - 16:47

    Start your own retail business selling furniture and you'll soon know the answer. Curious Grace and new breeds of online retailers are already offering furniture at margins well below historical averages.

  • pformag on 07/06/2018 - 17:26
    +1

    Are you Stephanie's partner?

  • Telcius on 07/06/2018 - 18:21
    +1

    You should track down a local furniture manufacturer. I don't think its oz bargain cheap but compared to those prices you've linked its great value. I get mine custom made only takes ~ 3 weeks but you get to customise size/materials. i.e. The missus found a style she liked at Harvey Norman, I ordered it in Blackwood + Huon pine table, made to size and for a similar price to the HVN, which was made from pine.

    Also, I believe American Walnut is quite an expensive timber.

    • pilotyuan on 07/06/2018 - 23:16

      Never think about that. Will definitely look into it.

  • freakatronic on 07/06/2018 - 19:11
    +4

    I just buy off Gumtree. No lead time and you'll pay between 20% - 30% of what it was in the store.

  • zealmax on 07/06/2018 - 19:19
    +3

    Like everything in Australia, it's all because of Harvey Norman.

  • zealmax on 07/06/2018 - 19:21
    +5

    Australia tax was invented by an Australian, Gerry Harvey.

  • Hahuh on 07/06/2018 - 19:28

    Forget it. They don't even bargain here despite spending thousands or dollars. You'd be lucky to get a free pillow thrown in.

    Overseas there's infinite choice and the sales person would always try to give you a good price. Also, when your furniture gets old, you can easily and cheaply get it re-apolsterd.

  • this is us on 07/06/2018 - 20:52

    From the series "What is everything so expensive in Australia"?
    I usually get 10-20% OFF waiting for coupons from stores like Brosa, Interior Secrets, and Zanui, which includes different stores.

  • phoenixx on 07/06/2018 - 21:39

    You don’t understand how retail works. Let’s just say store buys this directly from the place you found, for the price you found. That is actually a 50% profit margin which is pretty standard for non promo pricing tbh.

  • sunnyc on 07/06/2018 - 21:59

    If everyone wants to be paid less, I assure you things will get cheaper.

  • Mrgreenz on 07/06/2018 - 22:06
    +1

    I don't believe it is that expensive tbh

    When I was younger I remember a 3 peice suite costing ~2-3 months average gross salary

    I would say its less than that nowadays

    • iand on 07/06/2018 - 22:59
      +1

      I was watching a show the other night and they said in the 60's a fridge cost 12 times the average male wage (which was a lot higher than the average female wage)

  • kaleidoscope on 07/06/2018 - 23:11

    It looks expensive due to designer range… I would not pay 900 for a coffee table… (but thats just me)

    btw i got this from fantastic furniture: https://www.fantasticfurniture.com.au/Categories/Living-%26-…

    Affordable, sturdy and been close to two years of use with absolutely no issues. But I understand everyone’s taste is different.

  • BartholemewH on 08/06/2018 - 09:56

    I used OzB to find my furniture. Leather lounge from the Harvey Norman $799 sale and the rest from when Everyday Living closed down. All years ago now but those pieces were 50 - 80% off.

  • nikey2k27 on 08/06/2018 - 10:24

    AMart all ways has 125% mark up on land cost.

    • phoenixx on 08/06/2018 - 17:17

      Source?

  • Blugok on 08/06/2018 - 11:12

    At least with local shop, you get what you see and feel. If you dont get what you pay for…. go back to the shop, complain and get refund

    If you buy overseas, the online store might display a same photo on the net. But the quality might not be on par or even different (color, material). If you get not what you expected…. well, you probably give one star rating, a long essay on their shop to satisfy your anger.

    As for mark up, i think its normal for businesses to set their own margin.
    Any business would like to get the highest possible profit. As long as there are customer willing top pay for their product/service.

  • Carpe Diem on 08/06/2018 - 12:53
    +2

    Furniture is ridiculously cheap, if bought second hand :) The bargains I have secured from Ebay/Gumtree/Marketplace is just insane. Some times near enough brand new too. Electronics I'd invariably never do 2nd hand but furniture most definitely.

  • idonotknowwhy on 08/06/2018 - 14:09

    Build your own?
    https://www.bunnings.com.au/diy-advice
    Wood is pretty cheap.

  • DarthAntz on 08/06/2018 - 14:27

    most australians still use milk crates with an old pizza box on top for a coffee table.

    Not that many people want good furniture, and those who do, will pay more. You can buy ikea furniti for the cheap, and replace it every few years. buying a 70kg coffee table looks awesome until someone's helmet-less child splits their head on the side of it.

    theres no shortage of furniture stores. they still make good money re-selling furnitureses made cheaply overseas.

    • smartazz104 on 08/06/2018 - 16:52
      +3

      most australians still use milk crates with an old pizza box on top for a coffee table.

      Maybe in your circle of friends…

    • TheSmegger on 09/06/2018 - 11:34
      +1

      Most Australians? No.
      Meth heads? Sure.

  • Lucky13 on 09/06/2018 - 01:33

    I worked in retail ages ago and it was 100% mark up

  • xiabonan on 09/06/2018 - 12:52

    A lot of stuff is expensive in Australia. For example, electrical appliances are generally much more expensive than in either the US or China.

    That being said, there are also stuff that's cheaper. I'm Chinese too, and many may not believe it but taking into account wages house prices is incredibly cheap compared to major Chinese cities. In Beijing (Capital city of China with the highest national salary levels) the average annual income in only about AUD$25,000, but 1 sq metre of costs on average about AUD$15,000. Let that sink in for a while.

    Anyway, the point I'm trying to make is that sometimes it's just the way things are. When I moved into my current 2 bedroom apartment last year I had to buy everything because there's literally nothing in here (a good thing), and I managed to find some pretty good furniture at Ikea at pretty reasonable prices I would say. I paid less than $150 for A good solid wooden bed (albeit not really exotic wood) which I think is pretty good. And some other stuff too.

    My current plan is that when I purchase a house in the future I will probably import furniture from China as well. There are now very good furniture customization workshops/factories which let customers choose the type of wood and the design of their furniture. They will also let you go to their factory to see how it's made. After that there's companies that help transporting these furniture via sea freight in containers, and do all the tax & customs clearing stuff for you, including obtaining certificates of sterilisation from the Chinese customs so that it can be imported into Australia.

  • ozlab on 09/06/2018 - 16:06
    +1

    Everything is relatively more expensive here. Furniture is one of them.

  • CalmLemons on 09/06/2018 - 16:45

    I think we should put out some figures.

    Everything is more expensive in Australia as although we spend more, we have a significantly smaller customer base (i.e. population). We have high rental costs, high wages, high utility bills and for businesses a consumer code that does cost more to abide by. Returns and exchanges cost a business money but going into that on ozbargain is like walking into fire.

    Let's do a non-direct model example.

    Tablet costs $200 USD from china. Convert to Australian dollars plus shipping would make it about $330 AUD. (We are not factoring in the business would have to use it's capital to pay for the WHOLE container that would be $50000-$100000). So cost to the wholesaler is $330 AUD without handling. Add on rent for the wholesale warehouse and the business costs to maintain and keep that warehouse, transport to the retailer and according to benchmarks the wholesaler needs to make at least 35% to actually run, the cost to the store would be about $500 AUD. So it comes into the store at $500+GST. Retail stores pay triple the rent per square meter vs a warehouse plus wages plus advertising plus other business expenses. Add on another 20% makes $600+GST. Store sells that table for $995 including gst.
    So we have $995 inc GST (after GST is $905)
    So $905-$600 - the store makes $305. So the store is making 60% approx. At this rate, the store would be bankrupt pretty soon as furniture ain't fast moving goods.
    This is why markup needs to be at least 100% to pay for all expenses and to maintain profit margins.
    For larger companies, it will just be selling for the sake of market share vs not making the sale at all.

    There are plenty of factory direct models and even they carry even higher profit margins to be feasible.

    Now think about how much effort the above system just takes to maintain on a daily basis. This is a very rushed example but for any business to operate apart from FMCG the profit margins needs to be at least 100%.

    Bear in mind, if the business did make $1000, 10% goes to GST, another 27.5% goes to tax, so for every $1000 PROFIT, the business only receives about 60%. So for a $995 item, the business owner gets about $200.

  • CocaKoala on 09/06/2018 - 19:24

    Obligatory video (~90 seconds) with Chopper's opinion on coffee tables: https://www.youtube.com/watch?v=WgsUrzc5Ej4

  • echelon6 on 09/06/2018 - 22:10

    Retail markup of 100% is about right. It's industry-wide. Rent, staff, advertising, GST.

  • icecream on 10/06/2018 - 10:10

    Where do I start? Here are my two cents,

    1. "Made in Australia" lift price. It is fair if both material & labour are locally supplied.

    2. "Big" retailers import furniture and sell them in name of "Australian Business". Need not to claim furniture made local, being local retailers made their pricing "Australian".

    3. Government protection on timber industry (cutting 1000+ words…)

    4. Small market.

  • ColonialBoy on 16/06/2018 - 11:05

    Seriously - DIY.

    There is a huge an rapidly expanding DIY community, especially in woodworking and fine furniture.

    https://www.youtube.com/watch?v=hfITpBfdJLw

  • PaulChau on 26/06/2018 - 11:51

    It's because of the taxes man. Obviously each company adds in their own labour and packaging costs and all that even if they don't manufacture their own stuff. At the end of the day, it's looking at all the work that goes into getting your furniture to you. I'm pretty sure if you bought local the prices may be a little bit cheaper for something that's just as nice and where the quality is just as good if not better. It's a matter of bargain hunting I reckon!

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