The real estate industry is one of the most promising sectors in the UAE, and it has also helped improve other companies and industries. In the UAE, the furniture sector is just one of the many firms uplifted by the real estate industry. The UAE is a global business destination and furnishing facilities are needed for the establishment of every workplace. The lifestyle of people living in the UAE and Dubai is radically changing and new interior decorations are needed. The furnishing sector is also adding to the import-export industry. Dubai has a broad network with neighbouring countries that will allow you to quickly grow your business.
Furniture Market in the UAE
Before Dubai was recognised as a significant business set-up hub in the UAE, the furnishing business did not seem to be a successful market. However, after the UAE began to be known as one of the most active countries in terms of industry, the furnishing companies received popularity. The UAE acts as a significant export platform for Asia, Africa and Europe. This has culminated in a spike in imports and exports.
Things to Keep in Mind Before Starting a Furniture Business
Before setting up your furniture business in Dubai, there are a couple of important things that need to be kept in mind in order to succeed.
Research Your Target Market
It’s really important to make a reasonable estimate of the competition and the amount of demand for your goods while preparing your furniture production business. You can be supported by market research to identify:
- Whether your furniture products are likely to be in demand
- The price at which you can sell them
- How much each of your retailer customers is likely to buy from you
- To estimate your annual sales income, you will need to estimate how many customers you are likely to have and how much each of them will spend.
Deciding the Niche or Target Audience
Depending on the route you have chosen to take to distribute your furniture ranges, your customers may include:
- Local, regional, and national furniture retailers – including professional internet traders
- Architects and interior designers who commission contract work on behalf of businesses such as hotel chains and restaurants
- Businesses requiring office furniture
- Specialist wholesalers (although these are not commonplace in the furniture industry)
- Members of the public to whom you sell directly, or offer a customized or bespoke service
- Local businesses that place orders for either your standard ranges or for purpose-built furniture
It is very important that furniture manufacturers keep up with trends and produce what consumers want, in fashionable styles and finishes, and using textiles in colourways that are in demand. Whenever possible it is a good idea to work closely with your retailer customers when putting together new ranges. Retailers will also want to be reassured that orders will be fulfilled within a reasonable time scale if consumers place orders rather than select from the stock.
You’ll want to assess if there’s going to be enough demand for the ranges of furniture you plan to manufacture. The furniture manufacturing sector in the UAE comprises of a considerable range of smaller companies and some very serious issues that are manufactured in bulk for the retail sector. The sector is extremely competitive, since there are many companies that manufacture furniture of poor quality at very low prices. There is also a wide UAE demand for inexpensive, mass-produced manufactured furniture.
There may be opportunities, however, for manufacturers that offer ranges for a ‘niche’ market. For example, this might be:
- Producing stylish ranges for young professionals
- Handcrafting pieces using traditional methods – items that will become the antiques of the future
- Offering a bespoke or customized service so that you design and produce items specifically for a customer
- Focusing on a particular market, for example, the contract furniture sector and producing items for hotels
- Designing and manufacturing upmarket office boardroom furniture
If you create large furniture pieces, such as sofas, then you would possibly need to provide a delivery service. Depending about the target market and who you distribute, a limited number of stockholders or a much greater number of end-user buyers can need to receive orders. You may also be able to sell other furniture makers specialized services, such as French polishing or veneer planning.
Don’t overlook that if you plan to give a variety, your retailer consumers will like examples showing numerous finishes or textiles. When you add different collections, don’t underestimate the expense of manufacturing them and removing them.
People want furniture pieces to last for considerable duration and the industry has suffered from a large number of goods in the past that have been returned to the retailer/manufacturer since defects have been created. You should offer the returns policies some consideration so that the consumers in the retailer know what protocol to adopt in the case of a consumer complaint. Set down explicitly the requirements of any warranties you provide, such as a five-year warranty against poor workmanship and products.
Promoting Your Business
You’ll need to think about how your future buyers would feel about you and your collection of furniture. You may either advertise the goods and sell them directly to your own account or sell them through retailers of furniture.
There are several ways in which you can advertise your business and market your furniture, such as:
- Contacting the buyers at both multiple and independent furniture retailing outlets
- Exhibiting at the major trade shows for the furniture industry
- Contacting specialists such as architects and interior designers who might put contract work your way
- Setting up your own website, perhaps with an online ordering facility
- Using social media, forums, and blogs
It is really necessary to have the price right. You must make sure that the gap between the expense of your furniture pieces and the sale price is at least adequate to meet all your running expenses, even your own drawings. To invest in new machinery and technologies, aim to reserve any profits. Not only do you need to be prepared to repair machines when it breaks down, but you might even choose to acquire labour-saving equipment to help hold the expense of your unit down.
Your two largest items of expenditure are likely to be on:
- raw materials, such as timber, upholstery materials, components, and so on
- staff costs, including specialists such as external polishers
It is very important to monitor your raw materials costs and to make sure that your workforce remains productive, that wasteful processes are reduced as far as possible and the number of returns kept to a minimum. Bear in mind that you may have to replace items on a regular basis if they have suffered damage during delivery.
Special Offers and Discounts
You might decide to offer various promotional discounts to your retailer customers such as:
- Early settlement discounts for prompt payment of invoices
- Retrospective bonuses or rebates based on the volume of purchases they makeover several months
- Bulk discounts for buying in large quantities
- Free delivery
What to Manufacture?
A broad variety of diverse styles of the commodity are covered by the furniture production sector, mostly aimed at different customers. You can manufacture furniture for the domestic market or for the contract furnishing market (for example, for businesses open to the public, such as hotels and other venues) or for office furniture. The domestic sector is the highest, accounting for around 70 percent of revenue, while about 30 percent are in the contract and office furniture industries combined.
The next move is to settle about the sort of furniture you are going to make – timber or upholstered, fitted or free-standing, for example.
Wooden furniture comprises cabinet furniture, such as cabinets for walls and ceilings, chests, bookcases and other storage units, kitchen cabinets, benches, tables, benches, stools, etc. Wooden furniture may be manufactured from a number of sources, including solid wood and man-made items such as chipboard, plywood or fibreboard of medium density (MDF). Real or synthetic products can be produced from veneers. Polished, oiled, lacquered, dyed or painted can be the finished item.
Upholstered furniture, which is the furniture industry’s main sub-sector, comprises sofas, benches, upholstered stools, some styles of beds, etc. As with wooden furniture, diverse products, including timber, metal and plastic for frame construction and a range of textiles and leather for covering, are likely to be used in the construction of upholstered pieces. Foam, polyester fibre or feathers can be packed with cushions.
How to Set Up a Furniture Shop in the UAE?
Business setup in the UAE has a very clear process:
- You might need a local sponsor depending on whether you set up a free zone company or company in the mainland.
- Select an appropriate location
- Obtain business licenses and registration from the necessary authorities and the DED (Department of Economic Development)
- Learn the laws and legislations relevant to furniture businesses
- Clear the necessary formalities required to start a business in the UAE
Advantages of Starting A Furniture Business
Opening a furniture business can be very profitable and rewarding in the long run. There’s a wide range of furniture, accessories, home furnishings, home decor, not to mention specialty furniture that you can provide to all kinds of customers, for their home, office, hotel, restaurant, or business. Sometimes you can make objective profit only if your designs are special. Some other advantages are:
- UAE provides a growing market
- It is an international business location
- Labour is cheap
- Provides connection to other Gulf Cooperation Council countries
- There are different zones for business operations in UAE such as Mainland, Free Zone, Offshore, that provide you with great benefits for your business
- There are no corporate taxes
We Are Here for You
If you are planning to expand or set up a new furniture business in the UAE, Riz and Mona Consultancy, a firm with experienced consultants can help you. Whether it’s obtaining a business license, forming a company, or registering a product or your trademark, the firm provides you with a full suite of services for your business setup in Dubai and all over the UAE. We also take care of your registration processes and make sure you do not have to run from one office to another to get your business going. PRO services and visa processing are just some of the many support services that your business can do well with. Contact us today to book an appointment with one of our consultants.