Australian franchise Vast Furniture & Homewares said it has developed a business that runs a lower cost base than that of industry standards. CEO and founder of Vast, Ross Clayton has criticised this way of doing business and has devloped an alternative model that has removed the need for storage, and cuts the cost and time of delivery.
The furniture industry is worth an estimated $7 billion in Australia, with approximately half of stock nationwide imported from China, according to data in the Australian Business Review. Australian retailers have traditionally stored stock in warehouses, a major cost that requires substantial investment capital and storage space. But it also limits the availability of product for the consumer.
Ross told Australian Business Review: “It’s one of those incredible situations where everyone follows the same practices in the furniture industry simply because that’s the way it has always been done.
“I have been in the industry for many years and one day simply questioned why we are spending so much money on storage, wasting time in terms of delivery and limiting our overall results. I knew there had to be a better way.
“What we have done is to turn the furniture trading model on its head and look for a more efficient way of doing business and delivering to the customer. The result has exceeded all expectations and our future has never looked brighter.”
Vast Furniture’s business is based in the cloud, creating a system that is able to store all inventory centrally and organise direct manufacturer-to-customer delivery, bypassing warehouse overheads. Instead of franchisees having to build their own system from scratch or be expert importers or exporters, each business has instant access to an entire range of suppliers.
Working alongside Vast’s franchisees is a national online team that focuses on support including sales coaching, operations, accounts, HR advice and marketing.
The company said it has led to reduced delivery times by 80%, and costs 70% less than the traditional industry model. “Previously we needed someone who was a born creative business whizz or a cashed-up genius to make their franchise a success. Now anyone with the desire to be involved in the franchise business can be set up for success with this model,” said Ross.
“The furniture business has not had a decent revolution since the introduction of flat pack products. We believe the future lies in being more efficient, productive and cost effective. By providing a franchise model that ticks all these boxes we offer investors a very real chance of keeping our industry alive, right here in Australia.”
From Business Review Australia