How does online competition affect a furniture store purchase?
A buyer tests a furniture store against online sellers by looking at how sales split between showroom and web, what service the store offers that online sellers do not, how price-matching affects margins, and how well the store’s own website works.
Furniture is one of the easiest things to compare online, and shoppers often look at a piece in a showroom and then check the price at home. A buyer therefore needs to know where the store really wins customers. These checks show how the business compares with online sellers.
Showroom sales and online sales
Ask for sales split between showroom and web orders, and whether the store sells online at all. Look at how many customers visited and bought, and what share were repeat. A store that sells mostly to people who walk in needs foot traffic and a reason to visit. One that sells online faces a wider field of rivals.
Delivery, assembly and service
Local delivery, assembly, haul-away and repairs are things a shopper may value and a distant seller may not match. Ask what the store offers, what it costs to run and whether customers pay for it or it is bundled in. Service that customers appreciate can justify a visit, but only if it is reliable.
Special orders and price-matching
Custom and special-order pieces often bring in customers who cannot just click elsewhere. Ask how many sales are special orders and how supplier lead times are handled. Ask also whether the store matches online prices, since that can squeeze margins. Compare margins by product line, not just in total.
The store’s own web presence
Check the website, the online listings and customer reviews. A store that is easy to find and shows its stock gives a buyer more to build on. See the furniture retailer guide for the other checks.
Related reading
15 pages on the same subject, grouped by topic.
Buying
- GuideBuying a furniture retailer in Canada
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- GuideBuying a bike shop in Canada
- GuideBuying a sporting goods store in Canada
- GuideBuying a thrift and consignment store in Canada
- Expert answerHow do nearby charity thrift stores affect a thrift store I want to buy?
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- Expert answerHow do I check a thrift store’s online sales before buying?
Due diligence
Sources
This answer is checked against primary sources. Links were last confirmed on the dates shown.
- 01Business Development Bank of CanadaGovernmentHow to conduct due diligence when buying a business
- 02Business Development Bank of CanadaGovernmentWhat are the steps to buying a business?
- 03Business Development Bank of CanadaGovernmentWhat is inventory
- 04Competition Bureau CanadaGovernmentPrice Maintenance (Section 76 of the Competition Act)
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