Furniture Store Business Overview

A furniture store sells new household furniture, including living room sets, dining tables, bedroom pieces, and office furnishings. These stores operate through both physical retail locations and online platforms to provide furniture for homes and offices. Smaller retail furniture stores face strong competition from online furniture stores and big-box chains that can offer discounted prices because of their higher volume of purchases.

Starting a furniture store is a big undertaking, especially if you plan to sell new furniture. The initial capital needed to start a furniture store can vary greatly depending on factors such as the size of the store, location, inventory, and whether it’s a physical or online store. Opening a used furniture store will cost less than a new retail store, but it also requires a reliable plan to acquire new and affordable used furniture.

The main business models for furniture stores include:

• Physical Retail Store: A traditional brick-and-mortar showroom displaying furniture for customers to see and test products before purchasing
• Online Store: An e-commerce platform selling furniture directly to customers through a website, often with virtual room planning tools and detailed product information
• Hybrid Model: A combination of physical showrooms and online sales channels allowing customers to browse in-store and purchase online or vice versa
• Custom Furniture Store: A specialized store focusing on made-to-order pieces with customizable options for fabrics, materials, and designs

Related: Checklist To Start A Business

How Do Furniture Stores Make Money?

Furniture stores primarily generate income through the direct sale of furniture pieces to retail customers. They purchase furniture from manufacturers or wholesalers at wholesale prices and sell these items at a markup to create their profit margin.

Industry Statistics

Furniture stores primarily sell new household and office furniture through showrooms and online platforms. These businesses fall under NAICS code 442110 – Furniture Stores. Here are some numbers about the furniture store industry.

Furniture Store Industry Size & Growth: The furniture store industry generated $147 billion in annual revenue last year. Over the past five years, it has shown steady expansion, with a projected annual growth rate of 3.4%. The industry is expected to grow over the next five years, driven by increased home renovations and consumer comfort with online furniture purchases (IBISWorld).

Number of Furniture Stores: 63,816 furniture stores are operating across the country, representing a 7.9% increase over the past five years. The largest companies include Ashley Furniture Industries with $5.1 billion in revenue, IKEA with $4.5 billion, and Williams-Sonoma with $2.7 billion in revenue. These top three companies demonstrate a range of business models, from traditional showrooms to modern hybrid approaches (IBISWorld).

Furniture Store Profit Margin: Furniture stores operate with an average profit margin of 4.4%. (IRS).

Also See: Ideas for Naming a Furniture Store

Costs To Start a Furniture Store

Starting a furniture store typically requires between $150,000 and $800,000. This range varies based on the size of the store and location, with smaller boutique stores on the lower end and larger showrooms on the higher end.

Here are some of the more expensive items when starting a furniture store:

Initial Inventory: The largest expense when opening a furniture store is stocking inventory, which ranges from $75,000 to $400,000. This includes display models for the showroom floor and backup stock for immediate customer purchases.

Store Location: Retail space for a furniture showroom ranges from $4,000 to $15,000 monthly for lease payments. The cost depends on the location and square footage needed to display furniture properly. Most furniture stores need at least 2,500 square feet of retail space, with larger stores using up to 20,000 square feet.

Store Fixtures and Equipment: Setting up a showroom requires $25,000 to $75,000 for lighting, display platforms, storage racks, and a point-of-sale system. This also includes equipment needed to move heavy furniture, such as dollies and hand trucks.

Delivery Vehicles: A delivery truck or van for furniture deliveries costs between $30,000 and $60,000, including the basic modifications needed to transport furniture safely.

These estimates represent general ranges for starting a furniture store, and actual costs will vary.

Resources
American Home Furnishings Alliance
Home Furnishings Association
National Furniture Association