Leather raw material prices have been increasing and the indicators show leather will continue to rise due to reduced beef consumption, natural disasters and increased demands from larger leather markets. Also fewer hides are available due to the stricter control by customs, which will rule certain countries out of raw hide business. The US furniture manufacture is faced with rising cost and many are insecure that the consumer will be able to afford the increase. The US manufacture has so many competitive disadvantages that this is just another level of frustration. Most of the increases that have been passed along happened in January and have not been felt by the consumer, so we are yet to see the effect at retail. How will it effect sales for the US manufacture? The US consumer will soon need to look at every item they buy to decide where to send their money. I say buy American made any chance you get. Another factor for the US manufacture is that the furniture industry as a whole is the smaller user of leather hides, yet expects the best quality and the lowest price. Volume and price are King to a tannery. Without large volume in the furniture industry then price will suffer to keep the flow of quality material. Another great report that will give you details on the raw material market is www.indexmundi.com. If you can subscribe to www.theSauerReport.com then you can stay in the daily loop on the business of raw hide trading and the price fluctuation.
In past years increases could be taken and business would continue as normal. With the business environment today it is a delicate balance. These extra increases are yet another road block for the the US manufacture. How we sell products and how we work together in a customer vendor relation will have to change. Even at the dealer level selling will have to change and be LEAN and direct. Cutting out steps and process will be the only way to keep the business flowing. US manufactures can no longer anticipate standard color sales. manufactures will rely on vendors to work with them as part of a purchasing team to create new ways of servicing the consumer. It is in these key relationships that you will see the driving change. Consumers are ready for this movement and all of them understand the need for the change. Not easy nor fast, but it will have to happen to keep the US manufacture competitive with the imports. A new wave of training and merchandising will have to take over in order to progress. Designers for many years took a back seat to the Retailers at the High Point Furniture Market in North Carolina and now it is the designers who are embracing the change and stepping up the furniture game. Designers are changing the furniture business and dealers will have to adopt at least some of their thought processes in order to continue to grow. Remember, if you are to big to change you will become a Dinosaur. It is a fact that when disaster strikes it is the creative people that drive the change to push forward to new and greater levels.
Check out a great source of Design that has been pressing the industry to step up and I really don't think they will give us using cotton or any cool
I know beef prices have been on the rise but not almost 28% for the last 6 months! That is a huge rise. Along with petroleum, it is going to be hard to manage pricing for the next year.
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