September 1, 2022

If you have ever gone online to look at office furniture for one of the major manufactures, you were likely blown away by the list price. “$10,000 for that table?”…seriously?

Ask your dealer what something costs, really, and you will hear a lot of “about,” “I think” and “estimate” in their responses.

For years the industry has been purposefully opaque about how they price things. There are several reasons behind this but none of them provide a great customer experience. Here are a few tidbits of insider information which will help you be in the know next time your company is outfitting an office.

1. No one pays list price – It seems silly but the list price is there as a way for the manufacturer to give you a price without giving you a price. Commercial furniture is sold through dealers who set the end user pricing and the pricing the dealer gets is greatly discounted off of the list. Any dealer, even the tiny ones get 50% off list price before adding their margins onto the product and most get more. A pretty standard dealer discount is 60% so that $10k conference table cost the dealer $4k. If they decide on a 25% margin your price would be $5,000. A good rule of thumb is to plan on paying about half of any list price you see online.
2. No one pays the same price – This also flies in the face of fairness but list prices and dealer standard discount are left intentionally high to give dealers and manufacturers wiggle room when negotiating with a major client. If company X is filling 20k square feet with furniture the dealer will ask for and get “extra” discounting from the manufacturer. This leaves the offices of 10-50 paying full freight with little negotiating power. 
3. No price is set in stone – until you sign and pay, that furniture price is fluctuating. There are many factors at play; pricing can change based on output capacity and raw materials from the manufacturer side. On the dealer side, margins can be edited by line items up until the very end to protect their bottom line and many wait as long as possible to give a firm price on the whole project.

My advice, remember, you are the customer. The industry has a lot of great people in it working hard to improve the buying experience but it is a slow process. It is ok to request upfront pricing and firm estimates. And up until the end, the price on every item is negotiable.