Self-assembly furniture also known as flatpack furniture is low cost furniture that is sold unassembled but the assembly process is easy enough to be done without special knowledge or tools.
Ready-to-assemble furniture, also known as knock-down furniture, flat pack furniture, or kit furniture, is a form of furniture that requires customer assembly. The separate components are packed in cartons which also contain assembly instructions. – Wikipedia
Overview of business model
This is a business model that was pioneered by a company called IKEA. The characteristics are as follows:
- Mass produced furniture made from cheaper materials (such as laminated chipboard) sold at a low cost.
- The design is simple, meaning the materials can be quickly cut, easily packed and shipped.
- There is no need for staff or space to assemble the furniture as this is done by the consumer at home – meaning you can easily streamline costs because your bill of materials is simplified.
- The cost is further reduced by the consumer due to the fact that the pieces that make up the furniture can be shipped flat. They can often transport it in their cars to be assembled at home (saving on delivery fees). This will also reduce your storage and transport cost as it can be stored and transported to shops at lower costs.
Getting Started
To start this business you need both design and manufacturing skills. You need to have skills in making a decent product for cheap that is easy to assemble. Then you need to produce it at scale. It is very important that this business model be executed properly, you don’t have to be fully vertically integrated and make the raw materials yourself but you need to be able to reduce costs to the point it is cheap for the consumer and profitable for you.
Practical Example
Here is a cheap TV stand I recently bought; I have never assembled a piece of furniture in my life but was easily able to assemble this. Look how simple the design is, 4 steps to assemble it. Five pieces of wood a few screws and even had an Allen key included to tighten the screws that was included. It was small enough to fit in a small car, removing the need to pay a delivery fee and it does the job. This can easily be mass produced. Think about doing this for any piece of furniture you can imagine – even bed bases.
How this translates in real life:
The market
Over half of South Africans live in poverty, often times poor people are sucked into purchasing furniture with high interest rates, this is a better alternative as it is cheap enough to be bought for cash. Also South Africa used to have a robust middle class that traditionally would not have bought such cheap furniture, but this segment is under a lot of pressure with rising cost of living which could make them look at cheaper furniture. Then there is the younger market as well.
Selling
The best way to sell this furniture is via a low cost retail channel, you have a showroom floor with one assembled and when people order they get it unassembled in a box.
