FF&E procurement is the process by which businesses are supplied with the Furniture, Fixtures and Equipment required for interior design projects. In this deep dive, we're breaking down 3 key reasons why procurement is important to your interior design business.
How do we define FF&E Procurement?
Procurement is defined as the act of obtaining something, be it physical items, digital goods, or services. In the context of the interior design industry, FF&E Procurement specifically refers to the process of obtaining Furniture, Fixtures and Equipment (FF&E).
Examples of FF&E items includes sofas, tables, chandeliers, and other equipment required by the interior type. A spa, for example, will have different furnishing requirements from a residential property, and both will require different items to a coffee shop.
We explore this topic in more depth in our previous blog post, Why Every Interior Designer Needs An FF&E Procurement Specialist.
What are the key steps to FF&E Procurement?
The procurement process is crucial for interior designers to master because it has significant implications for the project requirements, timeline, cost, and revenue of interior design projects.
From the planning stage, to delivery and installation, all the way through to closeout, it is important for interior designers, purchasing agents, and procurement teams to understand the process to ensure project requirements are met.
Looking for more information about the process? Check out A Step By Step Guide To FF&E Procurement.
Why is FF&E Procurement Important?
1. Cost
Interior designers want to protect their margins. Clients want to pay a fair and reasonable price. Suppliers are balancing the cost of raw materials, electricity, and staff wages. FF&E procurement is a balance of cost and profit between interior designers, clients, and the suppliers they purchase from.
Mistakes and mismanagement of this process can incur huge costs for your business, particularly when it comes to 3 key steps:
Negotiating prices from suppliers. In order to protect your margins and your clients' budgets, the ability to negotiate is a key requirement.
Taxes and import charges. You must be aware of the potential taxes and charges associated with international delivery. Double-check contracts with suppliers and the regulations of international freight to make sure you understand any additional costs that may be applicable, and account for these within your budget.
Cost of replacements. If items are damaged during transit, or during installation, your team needs to communicate with your supplier to find a solution. This can be costly depending on who is responsible for damages during transit.
2. Time
As the saying goes, time is money – and time is a priceless resource for an interior designer. Aside from procurement, you have the rest of your busy workload to navigate; communicating with your clients, marketing your business, and the creative design work you're hired for.
Delays in the procurement process can happen at any time and for any reason. The most common reason for delays? Logistics. From shortages of raw materials to late shipments, the procurement process relies on complex logistics at every step.
Delays in the procurement process are often caused by:
Mismanagement. Failing to understand the requirements of procurement from start to finish can cause delays.
Long lead times from suppliers. Particularly for bespoke and made to order items, you need to account for changing lead times when planning out project timelines. Delays from suppliers can have a major impact on your time and impact your clients as a result.
Transport delays. International transport is notorious for delaying projects, particularly for large items like sofas and beds.
3. Scaling up
All businesses want to grow - and as your business grows, so too will the procurement needs of your business. By thoroughly understanding the procurement process, you will have all the expertise required to create a strategy to scale up your business.
In our experience, interior designers find it challenging to scale up their business for international clients. On a local level, procurement is important, but on an international scale, the challenges - and potential for mistakes - are multiplied. It is very important to consider:
Import laws. These vary by country and require additional paperwork. Some items may even be banned. Understanding these laws and planning around them is vital to ensure your business can scale up in a timely manner.
Handling currency conversion. This may incurr additional fees or charges and must be factored into the project requirements.
Delivery and installation. Procurement teams need to be working closely with local companies to ensure the prompt and correct installation of electricals and equipment.
Is FF&E procurement becoming too much for your business to handle? Every interior designer needs a procurement specialist. Contact us to find out how our FF&E Procurement services can transform your business.