Is the furniture industry highly profitable, and how much profit can a solid wood furniture business make? In this article, I will explain the cost and profit calculation methods in the industry. I hope this helps you understand better how to purchase and what the actual costs are, so that when you buy furniture, you can make an informed decision.   When solid wood furniture leaves the factory, the manufacturer adds 28% in indirect costs—such as water and electricity (2%), rent (10%), machine depreciation, and consumables (3%)—on top of direct production costs, which include materials, labor, and workshop expenses. Additionally, management salaries, hospitality, and business trips account for 10%, and taxes and fees take up another 3%. The factory also adds 12% profit margin to the final price.  For example, if the direct production cost of a solid wood bed is 3,200 yuan, the ex-factory price would be around 5,333 yuan (calculated as 3,200 divided by (1 - 0.28 - 0.12)). This is without considering freight or packaging costs. Over time, as the factory operates smoothly, some overheads may decrease slightly, but not by more than 5 percentage points. This is the factory's base price.  The cost of packaging, reinforcement, and transportation varies depending on location. Assuming the factory is in Shanghai or its surrounding areas, the outer frame reinforcement and labor might cost 120 yuan. Transportation from the surrounding areas to the Shanghai distribution center could be another 120 yuan, plus 40 yuan for delivery to the customer’s home. If the product requires installation, such as a large wardrobe, it could cost around 200 yuan. Overall, the total transportation and installation cost ranges between 380 to 480 yuan.  If the furniture manufacturer offers after-sales service, there may be additional costs. For instance, minor issues like warping or cracking can occur due to humidity or temperature changes, which are normal for solid wood furniture. If customers call for repairs, these services come with a cost. On average, after-sales support for a single product might add about 30 yuan to the total cost.  So, if the bed is delivered directly from the factory to your home, the total cost should be approximately 5,333 + 380 (or 480) + 30 = 5,743 (or 5,843) yuan. However, in reality, many furniture items are sold through showrooms like Red Star, Jisheng, or Yuexing. These retailers add their own markups. Here’s how the cost increases:  Typically, after leaving the factory, furniture must go through a dealer or showroom. A typical store charges 20% in operational costs, including rent and sales expenses. The dealer also needs to ensure at least a 20% profit margin, which means the total cost of the sales link is around 40%. Therefore, the price of the bed becomes 8,888 yuan (calculated as 5,333 divided by (1 - 0.4)), excluding transportation and packaging costs. Adding the previously calculated transportation, installation, and after-sales service costs brings the total to 8,888 + 380 (or 480) + 30 = 9,298 (or 9,398) yuan.  This is the full breakdown of the furniture industry’s cost structure. When you see solid wood furniture in a physical store, you don’t need to be surprised by the high price. Just apply the formula I’ve explained, and you’ll have a clear idea of what the real cost of the furniture is.  Yokelink specializing in supplying a wide range of Cable ties, Cable cleats automobile clamps, and so on. It mainly produces kinds of stainless steel cable ties (eg, Uncoated, Epoxy/Polyester coated, PVC coated, PPA coated, PA11 coated ), nylon cable ties, weather-resistant acetal products, stainless steel cable cleats, automotive clamps, and other cable accessories. The products are widely used in Offshore Projects, Shipbuilding, Port Machinery, railways, Automobiles, Power Energy, Aviation, Nuclear Power, Electricity, Telecommunication, and so on. The products aim for a middle-high market position, with independent export rights. Cable Cleats, Cable Fittings, Cable Accessories, Cable Ties Ningbo Yokelink Machinery Co.,Limited , https://www.yokelink.com