Seth B

Archive for 2009|Yearly archive page

China Raising Export Tax Rebates on Furniture

In Sourcing and Trading on June 9, 2009 at 6:45 pm

In recent news announcements, China has announced that it will start giving back tax rebates to factories who manufacture furniture and more than 600 other industries.  So, Chinese furniture manufacturers can remain competitive.

What I love is how fast Beijing can implement their policy.  Two years ago, they raised taxes, before the big drop in exports and sales worldwide.  Last year, they lowered some taxes to get more competitive, and now, it seems that exports will be given 15% of the 17% VAT they paid when they were purchasing the materials.   This means only 2% VAT paid to the government.  Factories who sell to local market and export will need to have good records to prove to the government that they exported the goods they are going to claim a VAT rebate on.

This is almost back to the original VAT free systems and rebates from years ago designed to stimulate exports while China built their economy up.  It seems the local economy still cannot support the 1.4 billion people?  Well, China is doing nothing different than other Asian countries (Indonesia and Vietnam), so it is a good move on their part to attract more business.

So, will we see lower prices being quoted soon?

Green Day at Hospitality and Design Expo

In Eco Friendly Furnshings on June 1, 2009 at 10:09 pm

Green Day at the Hospitality Design Expo in Las Vegas was another success this year.  Over one hundred and fifty people showed up to talk about a number of green categories in hospitality and green furniture.  Attendees ranged from designers and consultants, to manufacturers and green buyers.

The main focus seemed to be on green hotel projects that have been completed, including some issues that have surfaced with ideas on how to solve them.  Jake Kheel was the initial speaker, giving a really great overview on what they have accomplished in Punta Cana, which I found to be fascinating and inspiring.

Some drinks and chatting (otherwise know as social networking) then took place, and back to more hotel stories, called “Greening the Brand”.  These were presented by some of the larger hotel chains (Hyatt and Starwood), and they reviewed what they are doing–from their normal day-to-day operations, to their green-branded hotels, how and to whom they market, and lots of images of their properties.

Well, not to be boring and detail the whole convention, my favorite part was the discussion about third party certifications, but it ended up walking around a major point.  How much does it cost?  A person in the audience even directly asked this question during the Q and A, but it was skirted in good political style. At the end, it was a free style show, with really cool ideas from leaders in the industry giving presentations.

I would like to compliment Tara Mastrelli, who coordinated the event and managed to keep all these creative minds on track…  It was well organized, interesting, and broken up well.

Here is a link to the Green Day Event Homepage

High Point Best of Market

In Home Furnishings Trends on May 28, 2009 at 12:26 am

I just got an email with a link to the best of  high point market from Home Accents Today.

http://email.homeaccentstoday.com/cgi-bin4/DM/y/hBRSu0PPuju0Rnz0HIv80EC

Some nice looking ideas, although you never know what is a paid advertisment vs. what editors fell in love with.

Business Card Display and Drop Box

In Sourcing and Trading on May 21, 2009 at 6:03 pm

Cool markeing ideas are hard to come up with, and even harder to execute.  Well, you don’t always need to be original…

We developed a business card display and drop box for furniture manufactures to use at their next furniture fair. While many companies do not have a drop box, often buyers in a hurry will walk by a booth and grab a card or catalog. Why not make it clear that you expect their contact info in return, so you can tell them about new designs and innovations your company has come up with.

I have seen boxes before, from nice vases to marketing boxes. I looked online for business card advertising displays, and found nothing like what I’ve seen at the shows, so we had to start from scratch. The best resource I found on google has some cool ideas, but I figured we could improve on it… Also, these did not fulfill the purpose I was looking for.

Our card box is not only a drop box, but also holds business cards in the front. As well as letting buyers know they can the factory on goodfactories.com and the factory can use us as an independent verification.

This box is not perfect, its a bit hard to set up, and the lip for the business card holder is too small, but this is a good start.

Suppliers had a good reaction to the box, but we did not anticipate the show security shutting us down.  We had to keep our mission quiet, and did not distribute as many holders as we would have liked, but we did manage to get over a hundred into appreciative suppliers booths…

Goodfactories Business Card Display Box

Goodfactories Business Card Display Box

Dining Table Sourcing Guide

In Sourcing and Trading on May 12, 2009 at 5:39 pm

Is buying dining tables on your horizon? Don’t get into negotiations without good background information. Like any product, the pricing of tables and chairs depends on many things. We took 5 simple designs and got a lot of price quotes. Our goal is to give a good overview on how much a small to medium sized buyer should expect to pay for basic manufactured dining sets.

Along the way we encountered some interesting results. Prices quoted from China Furniture Manufacturers exceeded our estimates. Various factors could have caused the price differences, but we believe that the major reason was the order size. If your company is only ordering 1 container at a time, then some manufacturers in China may not be as focused on getting buyers good prices. However, there are many smaller furniture manufacturers in Malaysia, Vietnam, and Indonesia who are looking customers and don’t mind smaller orders.

As there are many different areas in China, we even tried to separate by region, assuming that, as in the past, different areas will have different prices. Again, this turned out to not be the case. Suppliers in Fuzhou and Zhejiang were close in pricing to the factories in Guangdong. The other explanation for the price difference is that the quality levels at the factories may be much higher. I can say that price and quality do make a big difference. A high-end factory will make a better product. This is why anybody who is seriously in furniture should visit the supplier before placing an order, or pay an expert to do it for them.

But, based on the companies we researched and the customers they work with, we’re suggesting negotiations will be needed when working with furniture manufacturers in China to get competitive market prices on simple wooden tables and chairs. Evidence that this is not just a trend but a real shift in Asian sourcing can be seen in a previous article we wrote FOB Asia. All the wood furniture is not FOB China, but actually “FOB Asia”; and from what I can tell, most is actually being manufactured in Malaysia and Vietnam.

As a side note, we have also recently heard from other people that the prices in China for higher end goods have been 15-25% higher, but they found their suppliers in China ship more reliably. So, price isn’t as important if your goods are late for your next market role out!

Dining Table

Dining Table

Dining Table
54″W 38″D 30″H
12″ Butterfly Leaf
Materials: Wood and MDF
Knock Down: Legs
Pkg: Individual Safety Pack

Chair
18″W 19″D 39″H

Price: Table: $93.00 Chair: $24.50 Set w/6 chairs: $230.00

Pub Table

Pub Table

Pub Table
36″W 36″D 42″H
Materials: Wood and MDF
Knock Down: yes
Pkg: Individual Safety Pack

Chair
19″W 24″D 48″H

Price: Table: $50.00 Chair: $25.00 Set w/4 chairs: $150.00

Round Dining Table with Leaf

Round Dining Table with Leaf

Round Dining Table w/ Leaf
36″W 36″D 30″H
17″ Leaf
Materials: Wood and MDF
Knock Down: yes
Pkg: Individual Safety Pack

Chair
17.5″W 19.25″D 35.5″H

Price: Table: $85.00 Chair: $26.75 Set w/4 chairs: $190.00

Promotional Dining Table

Promotional Dining Table

Promotional Dining Table
48″W 36″D 30″H
Materials: Wood and MDF
Knock Down: Legs
Pkg: Individual Safety Pack

Chair
18″W 23.75″D 38″H

Price: Table: $50.50 Chair: $22.00 Set: $135.00

Iron and Glass Dining Set

Iron and Glass Dining Set

Iron and Glass Dining Set
38″W 38″D 30″H
Materials: Iron and glass
Knock Down: yes
Pkg Individual Safety Pack

Chairs
20.5″W 18.5″D 39″H
Materials: Iron + microfiber cushion

Price: Table $40.00 Chair: $20.00 Set w4 chairs: $120.00

Chair with Cushion

Chair with Cushion

Final Note: You can substitute a microfiber cushion for a wood seat bottom for all above dining sets almost no cost difference.

Special thanks to: Fancy Wood Industries, GRM Furniture, Zhejiang Bole Furniture, Ningbo Fubang, and Pouva Furniture.

Take the Order

In Home Furnishings Trends, Sourcing and Trading on May 7, 2009 at 4:08 pm

Last week, looked like the beginning of the end for quite a few furniture manufactures at the furniture fairs. They were just hoping for that order that could save their business. I’m guessing, that as furniture sales are not picking up at any quick rate, this summer will be rough for many manufacturers, and we will see a spike in number closing down.

This leads me to an interesting story, I heard from a friend who buys for a big furniture retail store. He had some orders, which were pretty simple items, and wanted to help out some of his older higher quality suppliers. He brought the project to them, and told them what he needed to pay. They rejected the price and came back about 20% higher. Now, my friend is very reasonable, and the price he offered was no problem for him to get at good quality factories. He was literally trying to help the factory, because he knows they have very few orders.

2 months later, that factory closed its doors. And, he’s wondering why they would not take an order, just so they can keep their employees salaries going. Maybe they do not make money, since high-end manufacturers have a different overhead structure, but right now, it is about survival. Orders are starting to come back slowly, and the companies who survive stand to be in a good position.

What would you do?

Slow Website

In Uncategorized on May 1, 2009 at 12:03 am

Ugh!

We recently made updates to GoodFactories.com, and it has seemed to really screw us up!

2 weeks now, and I feel no closer to a solution…

This is really frustrating because I don’t understand enough to dig into the problem and fix it myself. Everybody else seems baffled… But, I’m hoping for some good luck, it appears to be something in the database…

What I’ve learned that could be of use to others? Making updates and changing servers is not as easy as it sounds…

Anyway, hopefully everybody can show patience, I’ll update the blog with the new features once they have been stabilized!
————–Updated 5/7/09—————

We have stabilized the website, it is fast again!

We are also working on improving world wide speed this next week…

Wanted in China – True Story

In Sourcing and Trading on April 27, 2009 at 2:50 pm

I’m in my apartment, paranoid that the next moment, a crash will come through the door… I don’t even like writing this! Anyway, being a wanted person in China does not feel nice. About 5 days ago, factories found out my fathers lighting company is going through chapter 11, and they won’t be getting paid.

Their immediate reaction is to go to our factory, to see whats going on. While outside, one of our employees overhears one of the owners saying to go find Seth. I’ve been out of the business for over 2 years, but being the owners son does seem to still mean something over here. We’re not sure their plans, but for sure, one of the factories contacted a friend of mine to see if I was still in China, and where I live… Unfortunately, my friend didn’t realize till a little ways into the conversation that something sounded fishy.

So, 10:30 PM I’m getting urgent calls from my Bro and Dad, saying guys are on the way, get out!

This is freaky, good thing for gated communities, its hard to drive in a van full of goons. And, my friend did not mention my exact area. Ok, so get out… The vendors found out, and your family’s business owes over a million dollars to factories that they may never see! They will come for me, this is not a question… Would they hurt me, probably not… See a similar kidnap case.

How safe am I, well, relatively safe, but still not a good feeling. I called a friend of mine, who made it over in less than 5 minutes. He lived in Isreal, so had served in the military, and also lived in China for over 10 years and has good contacts. Down to the basement, and in a car, if people are watching, they probably won’t see any of this. We head out to another part of town. I’m gonna stay here for the next few days, away from anywhere factories could find me.

Ok for now, and out of site. Now, the game is how to accomplish my goals at the next trade shows without showing my face. Well, that was pretty easy, and I even came by my house a few times to help get my stuff ready for a weekend out of town. Some drinks with my friends over the weekend, and it all seems to melt away. They have not visited the apartment, and still may not know the exact building or number. I figure its pretty safe to go in and out, but keep low profile, and only enter and leave by car, via the underground car park. I’ve been able to make it till now, that I’m writing this…

Once I’m back in Dongguan, I see another email, from an old vendor I know… read below…


I defer to you the before,But now i am very disappoint to you.you let many factorice will close.You are a swindler.you must pay me all money.I know you will set a company in zhangshan.If you don’t pay me.We will look for you and your sons try my best.If i find you,you know what is aftermath.
Louky

Well, that is not fun to read! So, gotta keep a low profile, shits gonna go down here probably Friday, and I still have a fair to go to… A good suggestion from my Dad, is get somebody else to take care of what I need to get done… Luckily I have some great friends. They are going to help me at the Canton fair, while I’m jetting back to the USA. I really do not feel threatened, or even think that people are actually looking for me. But, I’m still aware that they could be and I would be stupid to take that chance. I’ve spoken to some close friends about it this week, again, the main point, I’m probably safe, but…

How about my housemate, who has been staying here in the apartment by himself for the last week? Well, all people I’ve talked to think mafia here would not go after the wrong person. Also, they don’t think they would actually harm a foreigner. But, if they could, they would find a person and keep them until all the dust settles to the factories contentment.

Now, sending an email threatening people is not a smart thing to do. My Dad has already planned on making personal settlements with vendors in order to keep our customers and suppliers able to survive us going Chapter 11. One lesson learned, is that by not being proactive with the suppliers and telling them that this is going on, but that they find out through the grapevine will mean that they assume the worst and may overreact. Or not, we’ll see how this goes…

Another thing recommended to do, is to keep a list of all the people who make threats, including their addresses, cell phones, and bank info if you have it… We went as far as writing down all the license plate numbers of the people outside our factory. If you do have contacts in the darker side of the world, or if something goes wrong, the police will have a good place to start looking.

Again, the smartest thing for me to do is not go home at all, and avoid the restaurants and bars that I normally eat at…

At this point, some vendors have rented apartments outside the factory to be sure we do not move things overnight, they are watching.

Its a few days later, I made it to the Hong Kong Housewares Fair, had some good interest from factories about GoodFactories.com and how it can help them find more customers, and made it to the hotel.

I’m finishing this article from home. Its actually snowing today, and I’m still wondering if I ever was really threatened, or the factories just wanted to scare us into paying them. Either way, guys from our company are there, and in the middle of negotiations. They have armed security with them during the negotiations, in case anything gets crazy, but hopefully the orders get shipping again, and the factories can keep enough business and get enough cash flow to survive…

I’ll update the post with what happened when it gets resolved, and please comment if anybody has experienced any stories and has advise for others!

Furniture Prices in China???

In Sourcing and Trading on April 13, 2009 at 7:43 am

We’re working on a report for our readers, on dining room sets. Just plain basic wood tables and chairs. I’ve been shocked and interested to see if others have found similar results…

Our quotes coming back from Malaysia are almost 50% LOWER than prices coming back from China! We though this was an abnormality, but our Malaysian prices come from two companies who are already exporting to major wholesalers in the states.

So, we’re still searching China, we’ve been calling around all over the country, figuring that the prices in Ningbo, or Fuzhou should be more reasonable, but so far, the prices have been similar. My last real furniture project was over 3 years ago, and the prices that we were quoted back then FOB Xiamen, were very similar to the prices we’re getting from Malaysia today…

Also, from the prices I saw in Indonesia, I’m feeling that China may climbing up the price ladder… I still think that China is competitive, but I find it interesting that Vietnam and Malaysia direct furniture is selling so cheaply…

I’m also getting convinced that smaller buyers may find pricing outside China to be lower… I would love feedback on this subject, I’ll be looking more during the Canton Fair, too…

Please note, that in Upholstered Furniture, and possibly some other categories, China still seems to be the most affordable…

Eco Friendly Furniture Materials

In Eco Friendly Furnshings on April 7, 2009 at 6:15 am

The original article was published at

http://www.goodfactories.com/article/542

You can find Green Furniture Manufacturers on GoodFactories.com

A lot of discussion has been centered on materials that should be able to be called “Green”. Below in an overview and discussion on most materials that may be considered more sustainable and are used in the home furnishings industry.

Wood has been the most common construction material for home furnishings for thousands of years. And it is green. Not only is wood renewable, but properly managed forests also help reduce green house gas emissions. The key is to find sustainable wood suppliers. Luckily over the last few years, the Forest Stewardship Council has put together a fantastic all-inclusive programs that is now being used in more than 80 countries.

These suppliers are audited by the FSC or another accredited 3rd party on the ground using a comprehensive framework that ensures that the forest, animals and humans harvesting the forest will thrive in the future. After the forest and supplier have been certified, they are able to sell their wood to suppliers as FSC certified. However, not only does the forest need to be certified, but if a manufacturer wants to put the FSC certified logo onto products then they will also need to become certified by the FSC. They will audit the factory, and ensure that there is a proper chain of custody system in place to ensure products that are made with FSC woods and are going to be marked as such are not mixed with any products that may have non FSC woods. In my mind the FSC is the premier certification and a top notch organization who is doing a great job.

There are other eco friendly certifications available for wood. SFI and CSA are the largest 2 in North America. SFI was developed by the American Lumber Industry, as their own version of the FSC. This is a decent system, but there is no 3rd party audit required. Wood suppliers will conduct self-audits and review the guidelines on their own. The CSA is in Canada and follows a similar procedure. And while it is not as strict as FSC certification, they still do a good job. North American forests have done very well over the last 20 years.

2 other types of wood also deserve mention. Mango wood, and rubber wood. These grow in plantations and both loose productivity after around 12 years, these trees are then replaced and often sold very cheaply to locals. While not eligible and not as green as FSC woods, they are very renewable and should be praised and used over most other options.

Finally, reclaimed woods are by far the best option. They are taken from old homes and buildings, and reused instead of being put into trash dumps. Some smaller manufacturers have been doing this for a long time, but as I saw in India, there is a lot of old wood out there, and some creative people are selling great value green products.

Another category of materials is rapid renewables. These are plants that grow very quickly, and require very little support to grow. Bamboo is the leader in rapid renewables. It is a type of grass and has been know to grow up to 12” in a single day. It is very fibrous, and its strength is still being used as scaffolding in high-rise construction in India.

There is a hidden downside to bamboo, which has raised a lot of debate this last year. In order to make flooring or wood like materials, it needs to be dried then split in half. After its split in half, its compressed flat and depending on the desired output, re-cut and glued back together. These glues often contain formaldehydes and VOCs, not to mention being petroleum based. Bamboo in its natural state is one of the most green materials that can be found, but even if it has been processed, this is still a much more sustainable option when compared to using mdf and venirs.

Another rapid renewable is water hyacinth and other grasses. These can be dried and made into beautiful decorative accents and even furniture.

On to cushion options for the sofa people here. Almost 1/3 of the polyurethane foams produced in the world are used in the furniture industry. Since these are made from petroleum based chemicals and not renewable at all, they are not considered environmentally friendly. But there are some options out there that are more renewable.

Latex cushions are a more expensive option, but the latex is from a natural plant, and being harvested, thus its been considered a green option.

Even more recently, a hybrid foam made from both soy based materials and petroleum is being considered as a “more” sustainable material than all petroleum based foams. Currently only 10 – 15% soy foams are available, but they are working to get it up to 30% soon. So, supporting a more renewable material is better than nothing at all, and should be considered a step forward.

Last and certainly not least, down and other natural filling for cushions are long time favorites for environmentally safe furnishings.

One known issue to be aware of is land use for latex plantations. One of the side effects of latex being more sustainable is that its demand has been increasing and the plantations have been cutting into more pristine forests. The FSC is fighting this in wood harvesting, but latex users have not.

Now that we covered cushioning, the coverings to go with them are also important if you are selling sustainable furnishings.

We’ll start out with leather. The biggest problems here is the cromium salts used for tanning leather and the amount of toxic waste that is produced. The SFC suggests if you are trying to make your company sustainable and you want leather, to try and use vegetable tanned leather as a better option. But this is not nearly as uniform a finish and will show lots of defects, so the product would need to be specifically designed with this in mind. If you must use chromium tanned leathers, environmentally product certifications companies will not consider this green. But, one thing you can do is to try to cut down on transportation. Using a leather source close to your factory, avoiding shipping hides from Australia to Europe to tan and then from Europe to Asia for production is at least, a positive step.

Natural textiles used for bedding, decoration, seating and rugs should not make use of pesticides. The most common green materials include linens, hemp, abaca, wool and bamboo.

Some know issues: Currently non-organic Cotton consumes 10% of all herbicides, 25% of all pesticides, and 3% of all fresh water. Organic cotton also uses a lot of water, which is why bamboo is still included as a sustainable material since it grows so rapidly, although to make textiles with it requires a lot of processing. But hemp is not widely available and other sustainable materials are not as luxurious.

Most petroleum based materials are not considered sustainable unless they have been made using some recycled materials. Blue sign certification gets into this in great details, and does suggest better synthetic materials and processes to use.

The other major textile certifications to be aware of is Global Organic Textile Standard who certifies processes and materials from growing through manufacturing.

In Window Treatments, Blinds made of bamboo and reeds are the most sustainable.

For Drapery, again, bamboo and organics fabrics are recommended. And the use of synthetic fabrics are not because they do not hold as up well in sunlight.

Flooring recommendations are based on longevity and material base. Bamboo and FSC wood flooring are strong green choices. Cork has also been hot lately, since it is a tree bark and can be removed without damaging trees. Other choices include Ceramic Tiles, linoleum, and concrete because they last so long. For Carpeting and rugs, they do break down faster, but using natural materials, such as wool with natural dyes, sisal, and jute are better options, also try to look for carpets and rugs with natural backings.

Paints and Finishes are a key area to pay attention to. Especially important due to the fact that almost all of the products we buy use finishes of sorts. Again, Volatile Organic Chemicals are an important factor. The Environmental Protection Agency has set the maximum number of VOCs to be 350 parts per million. Lately, there have been a number of paint companies selling low VOC paints. The LEED standard to go by for buying low voc paints is below 150 ppm for non-flat paints, and 50 ppm for flat paints. These paints are better for workers and will help reduce the amount of indoor air pollution in peoples homes. There are also no VOC paints being produced.

Other paint options include water based paints, natural paints made from clays, milk, and natural materials, but most of these still use Volatile Organic Chemicals to keep them stable.

Please note that environmentally safe product certification companies prefer water based paints to petroleum or latex based as they are much less harmful to the environment. Water based paints are a bit more expensive, but the larger issue with them is that switching requires a factory to restructure their finishing systems.

http://www.eartheasy.com/live_nontoxic_paints.htm

Glass products that are made from recycled materials should be considered a better option. And since glass can be recycled, it is a decent option. One thing to watch out for with glass is heavy metals which are often used in art glass to get the great colors.

Ceramic is touted by Ikea as a green material because it can be put back into the earth with low impact on the environment compared to resins and is made from clay. Again, buyers need to be aware that some glazes used contain heavy metals.

Metals are used in a lot of products and the great thing is that they can be recycled. The bad thing is that many processes to finish metals use very toxic chemicals. So, lets talk about them.

Aluminum is one of the better metals, due to its lightweight and the fact that 95% of the worlds available aluminum already has a percentage of recycled material in it. Pretty much airline grade aluminum is the only pure non-recycled aluminum. Actually aluminum is one of the biggest success stories in recycling. The amount of energy needed to recycle aluminum vs take it from the ground and refine is a 95% energy savings. They figured this out a long time ago and it has actively been recycled for decades.

Steel and Iron you may be surprised to know that are both are often also recycled. I actually visited a plant in China doing cast iron fence parts that was melting down old engine blocks. They did not even consider this to be recycling, they were saving money in their mind. So, see if you can find steel and iron parts with a higher recycled content and paint them with low voc paints. If you want to pass a product certification, you’ll need to carefully look at your metal finish options. Most Chrome and Brass Finishes are highly toxic processes, and will not pass environmentally safe product certifications.

Papers made from recycled materials, tree barks or other natural materials that can be peeled off without damaging trees and papers made from FSC forests are great options for lamp shades, wall décor and other gift and decorative accents.

Plastics with a high recycle content are being used right now by Herman Miller, their highly acclaimed Aeorn chair has just passed Cradle to Cradle certification by using 64% recycled content and 96% of it can be recycled again. They are also using painted steel with a high recycled content.

Packaging Materials are another great place to save on waste. Many box manufacturers in China offer recycled cardboard materials at lower prices because they are often not as strong as non-recycled boxes. Now you have an excuse to save money, but obviously making sure the cartons meet your shipping requirements is the first priority. Also, using recycled cardboard or plastic materials instead of foam is a good option. A well designed cardboard or molded plastic inner suspension can often perform as well as Styrofoam and reduce manufacturing costs and material waste. Also, for retailers there are new recycling technologies that can even shrink down foam and sell it again.

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