Why Use Corner Office Design?________________________________________

Traditional furniture dealers find themselves in the middle of an evolving industry and some face an uncertain future. Some things – like demanding customers – won’t be changing any time soon, while other aspects of the business are being impacted every day. They include:

• Increased competition, with industry giants going after the same local business as the dealer

• Gradual and sustained downward pressure on margins as business compete for jobs

• Large contract accounts are starting to drive the business relationship, deciding with whom and how they will do =business irrespective of established channels

• The emergence of independent service provider companies with a focus on services.

So what can a business do faced with these challenges?

Identifying what services within the business that can be outsourced is a first step, but before that’s addressed, let's look at the traditional furniture dealer:

The traditional full service dealer model consists of 4 key operational divisions:

  • Sales
  • Design & Specification
  • Administration (Order Management, Customer Service, Finance, HR, etc.)
  • Operations (Installations, Service, Warehousing, etc.)

As we’ve seen over time, the competition has increased. With new products and more choices, larger corporations are able to offer deeper discounts to customers which have slowly but surely eaten into the profits dealers have been able to achieve. At the dealer level, this has meant that every division has been affected and forced to absorb these costs. As a result, margins have decreased. Ten years ago, a 25% - 30% gross margin would have supported service costs (hopefully leaving some profit dollars left over), but that margin is many times no longer available. Companies are increasingly looking for ways to change the costs to simply survive in today’s world.

What can a business do to turn this around?

Addressing “Fixed Costs” and “Variable Costs” are essential. Let’s go back to the 4 key operational divisions of a dealer. What of those divisions can be a variable cost versus a fixed cost? For most typical dealers, having a design department is essential and must be maintained but what about when the inevitable happens?  The natural "ups and downs" of workloads occur and sometimes those up and down times are extended. That’s where Corner Office Design can help. By changing this from a fixed cost into a variable cost, our services can close the gap in an ever changing economy when there is additional work needed without the expense and overhead of hiring employees.  In essence, we provide complete outsourced specification services to companies without these services and complement and/or extend existing design resources for those who do.

In the end, it’s about remaining flexible, and responsive to our quickly changing times. Outsourcing creates a way for companies to survive and flourish in a turbulent and global economy.


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