admin wrote:Well, a couple of thoughts, and please don't take this the wrong way as I am hoping to save you from a investment train wreck.
Assuming you are producing this stuff in the States, the basic problem is it's too expensive. I don't even know what your prices are, but I can already tell you ( unless you are giving the furniture away ) with a high probability you will have trouble either competing with the really really cheap imports from Asia that are sold at most malls and department stores or with the really cheap (generally low quality) furniture produced in Chile. Don't forget to throw in all the cheap furniture produced in neighboring Latin American countries, and the competition here for furniture would just crush you unless you are basically reselling their furniture already.
Now you might argue that your product is high quality, but the reality is that the market here does not care about quality because the culture really does not care about quality ( speaking of the majority of the market anyway ). They want cheap first, looks second, and quality is the absolutely last thing on anyone's mind. Essentially there is a very very small market for anything that cost over say about a $1000-2000 US (most Chileans likly do not spend over $2000 over 10 years or more on furniture), and people in general do not buy furniture like Americans. They don't for example replace their entire house full of furniture just because they don't match the drapes or they are a couple years old. The portion of the market with money, taste, and desiring to buy high quality furniture is fairly microscopic and also fairly saturated.
We are talking about a country of 15 million people, only 1-2 million would likly be your market (long story about credit, money, affluence, geography), and everyone else is already chasing those 1-2 million customer base that likly spend only about 10-20% of what Americans do on furniture anyway given a similar population and demographics.
Basically, if you are not already selling to big chains such as Wall Mart in the States and can provide big volume at super super low prices, you are going to have a hard time even getting your foot in the door in Chile. Which by the way means also need to get in to Wall Mart (A.K.A Lider) in Chile or one of the other big department store chains that buy by the boat load from Asia.
In general, my take would be that trying to sell furniture in Chile would be likly the worst possible buisness venture someone could undertake.
Many thanks for that useful response, which makes good sense.
I'd like to ask you a similar question from a different point of view.
I currently import and distribute cheap to middle end furniture from the Far East into a European country of 4 million people. I buy directly from cheap factories in inner China (I speak a little Mandarin) and Vietnam which supply Walmart etc..
Furniture is the business I know best so I'm looking at how I could set up as an importer in Chile and do something in the market, better than it is being currently being done right now.
To give you an idea of what I mean, for a typical fabric sofa at one of the bigger stores, I could buy it in China at a fraction of this price and profitably wholesale it to this retailer for less than 1/2 of what they are charging for it.
I doubt all the retailers who supply chinese made furniture in China buy all of the furniture directly themselves. There must be some wholesalers but perhaps they are not particularly professional or well priced?
Do you think there is a market for a company to import very cheap from China/Vietnam/Malaysia and sell to the retailers in Central Chile?
Alternatively, I could buy directly from the Far East and retail myself to take better margin and sell at lower prices, however I prefer wholesale.
I value your opinion from reading from reading your other intelligent posts on this useful forum and look forward to your response.
Thanks,
David.
(post was edited to remove link)