One of the most successful sectors in UAE is the real estate and it has helped boost other businesses and industries as well. The furniture business in the UAE is just one of the many businesses uplifted by the real estate sector. The UAE is a global business destination and setting up any office does require furnishing equipment. The lifestyle of the people living in the UAE and Dubai is changing drastically and it demands new interior decorations. Also, the furnishing industry contributes to the import-export sector. Dubai has a robust network with the neighboring countries which will help you expand your business easily.
Furniture Market in the UAE
Before UAE was recognized as an important hub for business setup in Dubai, business related to furnishing did not seem to be a strong sector. However, once UAE had started being considered as of the most active nations in terms of business, the furnishing businesses gained recognition. UAE plays an important market of export for Asia, Africa, and Europe. This led to an increase 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
When you plan your furniture manufacturing business it’s very important to make a realistic assessment of the market and the level of demand for your products. Your market research will help you 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 colorways 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 establish whether there will be enough demand for the furniture ranges you propose to produce. The UAE furniture manufacturing industry consists of a large number of smaller businesses as well as some very sizeable concerns that manufacture in bulk for the retail market. The industry is highly competitive because there are several firms that produce lower quality furniture at very low prices. There is also a big market in the UAE for cheap imported mass-produced 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’re producing large items of furniture like sofas, then you’ll probably need to offer a delivery service. Depending on your target market and how you sell, deliveries may need to be made to a small number of stockists or to a much larger number of end-user customers. You might also be able to offer specialist services to other furniture manufacturers, such as French polishing or preparing veneers.
Don’t forget that your retailer customers will want samples showing different finishes or textiles if you decide to offer some choice. Don’t overlook the cost of producing these and replacing them when you introduce new ranges.
People expect items of furniture to last for some time and the industry has in the past suffered from a high proportion of products that have been returned to the retailer/manufacturer because they have developed faults. You should give some thought to your returns policy so that your retailer customers know what procedure to follow in the event of a complaint from the consumer. Set out clearly the terms of any guarantees that you offer, for example, a five-year guarantee against faulty workmanship and materials.
Promoting Your Business
You will need to give some thought to how your prospective customers will know about you and your furniture ranges. You could either market and sell your products directly on your own account or sell them through furniture retailers.
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
Getting the price right is very important. You must make sure that the difference between the cost price and the selling price of your furniture items is at least enough to cover all your operating costs, including your own drawings. Try to reserve some income to invest in new equipment and technology. Not only must you be able to replace machinery when it breaks down but also you might want to buy labor-saving equipment to help you to keep your unit costs 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?
The furniture manufacturing industry covers a wide range of different types of products, often targeted at different buyers. You could produce furniture for the domestic market or for the contract furnishings market (for example for businesses such as hotels and other venues open to the public) or for an office furnishing. The domestic market is the largest, accounting for about 70% of sales, while the contract and office furniture markets together account for about 30%.
The next step is to decide on the type of furniture you will be making – for example, wooden or upholstered, fitted or free-standing.
Wooden furniture includes cabinet furniture such as wall and floor cupboards, chests, bookcases, and other storage units, free-standing kitchen cabinets and other units, desks, tables, chairs, stools, etc. Wooden furniture can be made from a variety of materials, including solid wood and man-made products such as chipboard, plywood, or medium-density fibreboard (MDF). Veneers may be made from natural or synthetic materials. The completed piece may be polished, oiled, lacquered, stained, or painted.
Upholstered furniture, which is the biggest sub-sector of the furniture industry, includes sofas, chairs, upholstered stools, some types of bed, etc. As with wooden furniture, various materials are likely to be used in the construction of upholstered items, including wood, metal, and plastic for constructing frames and a variety of textiles and leather for making the coverings. Cushions may be filled with foam, polyester fiber, or feathers.
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.