Furniture First's success depends highly on the strength of its relationships with its cooperative members, suppliers and end customers.

Furniture First's success depends highly on the strength of its relationships with its cooperative members, suppliers and end customers. The collective goal among all of those partners is to efficiently and profitably offer everything from bedding to sofas in their retail outlets.

The cooperative works to do this by continually improving members' profitability through volume purchasing, innovative operations and marketing.

The cooperative currently has 115 members who run 250 storefronts in 41 states. Stores range from 12,000 to 125,000 square feet, and a typical store's revenues are $6.5 million a year. In addition, most stores are found in rural areas. "Rural areas were not our intention, but that's where we ended up growing—more so than in big cities," says President Bill Hartman.

As a member-owned entity, Furniture First consists of independent furniture retailers who sell private and name brand labels of furniture to the consuming public.

"We go after specific retailers that do more than $2 million in business," Hartman says. "Potential members must have a good credit rating, sell medium to medium-high-end furniture and typically have two stores."

The result, he says, is a shared supplier base and a beneficial network with other cooperative members. "This helps them to gain a competitive edge and makes them more profitable," he says. "It creates commonality, which equates to a better buying group."

Big Milestone
Furniture First says it is proud to be celebrating its 10-year anniversary this year. "We owe our longevity to the members themselves," Hartman says. "The initial steering committee consisted of people from all over the country, coming together to develop the foundations for the organization. Two of these committee members still serve on our board of directors today."

Its member's longevity and commitment is what Hartman expects to keep Furniture First thriving in the years to come.

The Davids Take on Goliath
The co-op continues growing and thriving, Hartman says, because everyone shares a common goal: to successfully compete with and overcome the nation's retail giants.

"Pick up any trade journal or newspaper and you'll read about big chains overtaking small, independent stores in almost every facet of the retail industry," he says. "In the past 25 years, it has been a trend that has defined the American economic picture. Every once in awhile, however, you will find mention of a small, independent retailer standing up to a big chain and winning. It's what some have called the ‘David and Goliath Syndrome' in American business.

"More frequently, you will find stories about groups of independent retailers banding together to take on the giants," he continues. "A collection of Davids stand a far better chance of knocking down Goliath. That's what Furniture First is all about."

In February 1994, a small group of store owners sat together, and over the course of four days, mapped out what would become the foundation of Furniture First.

"We were retailers with a vision," Hartman recalls. "We understood that it was far better to get together with a common goal than to attack the problems of the industry as single entities. We knew that as the retail giants grew bigger, vendors and suppliers would be forced to cater specifically to them, and the smaller independent stores would suffer as a result."

Since those early years, more store owners have listened and understood the Furniture First message. They looked around at the competition, at their futures and the future of the industry, and realized that time was running out, according to Hartman.

"It's no surprise that today we are one of the largest cooperatives in the U.S. retail furniture industry," he says. "Our stores show a combined retail volume of more than $800 million since May 1994. They have become not just a stop-gap measure against the rise of the retail giants, but rather a dominant force seeking to prosper in the furniture industry."

As long as Furniture First exists, and as long as store owners have the foresight to visualize what can be done on their behalf to create a successful business, the members of the cooperative will never be considered an endangered species in the face of corporate giants, Hartman assures.

"In an ever-changing business climate, Furniture First members will join together to overcome the challenges of distribution, exclusivity, selling, operations, advertising - so as to place them on a ‘level playing field' with the mass retail chains that threaten them every day," he says. "In part, this is being accomplished through various container buying programs, private label programs, supplier programs, networking, seminars and much more."

Mattress Category
According to Furniture First, department store mattress sales have fallen, furniture store growth has become stagnant and mattress specialty stores have been thriving. In addition, consumers want to shop where there is a large selection, competitive prices and knowledgeable salespeople.

Furniture First has developed a turn-key mattress store - Mattress 1st® - and an in-store gallery to meet customers' mattress needs.

"Mattress 1st® was developed for Furniture First's members to become leaders in mattress sales, or to at least lead the charge in their local markets," Hartman says. "Our concept is that quality sleep equals a quality lifestyle. Selling coil counts, thickness of foam, gauge of wire and whether it's stuffed with cotton, silk or wool doesn't mean anything without benefit to the consumers' lifestyles."

Hartman says Mattress 1st plans to become "America's Sleep Specialist." In efforts to do so, it carries many price points and brands from "the big S's: Sealy, Serta and Simmons" to the Hometown Comforts Collectionâ„¢ and Tempur-Pedic.

"The difference between a sleep shop and Mattress 1st is that we want to convert that one time $350 mattress customer into a $30,000 to $40,000 lifetime customer," he says. "Our objective is to make customers for a lifetime, regardless of how much they spend. The ‘sleep shop' guy just wants to sell the customer a bed."

Mattress 1st also serves as a gateway into the Furniture First stores, he says. "Mattress customers can potentially become our furniture customers, too," he says.

Container Business
Furniture First believes containers will be the lifeblood of the case goods business. U.S. furniture companies can't continue to pay for higher-priced labor, hefty insurance premiums and meet the many OSHA regulations and still remain profitable, Hartman explains.

"These American companies will outsource to foreign manufacturers unless something changes in the current legal or economic arenas," Hartman says. "Our goal is to buy quality products at the lowest possible price in order to pass the value and savings on to the consumer."

Furniture First is currently executing a successful full and shared container program. "Two-hundred-plus retail locations, the excellent credit history that our members share, their medium to medium-high-end commonality and an average age of over 40 years in the industry have all been assets that make this process easier," he says.

Furniture First has developed a fulfillment program for cities representing different regions: High Point, N.C.; East Auburn, Wash.; Santa Fe Spring, Calif.; and Hudson, Wis.

These distribution facilities receive and cross-dock containers and re-label the cartons of less-than-full container shipments to its members at an affordable rate.

The cooperative has also developed its own in-house container ordering process complete with order forms, spreadsheets, order acknowledgments, order confirmations, order tracking, landed costs, packing lists and reorder support all backed up by a customer service department.

Suppliers First
Furniture First enjoys strong partnerships with more than 70 suppliers. How it has maintained them over the years is no secret, Hartman says. "Anyone can set up a supplier program - - and any one of them can end in divorce," he warns. "The goal is to renew the relationship year after year by creating a three-way winning partnership among the supplier, retail member and Furniture First."

Furniture First works to make sure everyone benefits in the partnership, he says, which is why the co-op has so many suppliers that renew year after year.

Private Label
Furniture First has developed a private label program for its members throughout the United States. The purpose of private labeling is to:

· Increase members' gross margins.
· Sell merchandise that cannot be found elsewhere.
· Build confidence in salespeople, using private label products.
· Use better POP material, which equates to better marketing.
· Assist in selling overseas container merchandise.
· Gain a marketing edge on local competition.
· Develop fact tags to enhance salespeople's' product knowledge while educating customers.

Furniture First's home furnishings brand is Samuel Frederickâ„¢ Fine Furniture, available in three collections: the Paragon Collection, the Pinnacle Collection and the Premiere Collection.

Its Italian leather brand is Giovaniâ„¢ Leather, which is available in two collections: the Primo Collection and the Elegante Collection. The other home furnishings brand is Madison Manorâ„¢ Furniture. Its three options are eight -ay hand-tied upholstery, solid wood furniture and multipurpose materials for all types of furniture.

The Annual Symposium
Furniture First's Annual Symposium combines topics related to operations and advertising into one informative program. The operations portion of the symposium has a full schedule including prominent guest speakers, member networking, store tours and retail panel discussions. Speaker topics on operations include warehouse management, service, in-home delivery, computers, personnel issues, cash flow management, break-even analysis, profit potential and compensation plans.

The advertising portion of the symposium consists of guest speakers who are experts in advertising and marketing and explore effective advertising and marketing strategies while educating members on how to implement these ideas in their stores.

"The symposium is different each year; last year was all about mattresses," Hartman says. "We discussed mattress sale add-ons such as mattress pads and pillows and how to get into the Tempur-Pedic foam business. All of our mattress and top-of-the-bed partners were there helping members learn how to do more business in the mattress arena."

Other Meetings
Furniture First has two General Membership Meetings per year. These are held during the International Home Furnishings Market in High Point, N.C. Currently, these meetings are held on the Wednesday before the market opens. Keynote speakers have included Bill Brooks of Bill Brooks & Associates; Jerry Epperson of Mann, Armistead & Epperson; Lester Craft Jr., of Furniture Today; Bob Keiningham of Cosec; and Britt Beemer of America's Research Group.

At each April and October market in High Point, Furniture First members meet in regional groups the day before the opening of the market to shop domestic and container partners, network and share information.

"With more than 7 million square feet of showroom space in High Point, no single store owner can cover the vast exploding marketplace effectively," Hartman says. "Therefore, we shop collectively in order to search for new opportunities and be more profitable.

"The Furniture First merchandising goals and objectives are to order the right merchandise, at the right price and quality, delivered on time, and in satisfactory condition," Hartman continues, "in order to achieve the greatest gross margin in the right amount of turns."

Other meetings include the Furniture First Committee Meetings that are held via conference call throughout the year, as well as in person at each April and October High Point Market. The Furniture First committees include Case Goods/Occasional, Marketing, Mattress, Operations, Technology and Upholstery.

These committees' responsibilities include evaluating, selecting and voting on new suppliers and programs for the entire membership.

"The committees play a very important role in Furniture First," Hartman says. "All members are encouraged to participate in the committees, but are not obligated to join them."

Future Direction
For the future, Hartman says Furniture First will be using Web sites more to help brand and sell through its member stores. "We just can't be everything to everybody; however, in a rural setting, Web sites can help," Hartman says. "If a store can't show all 24 beds in a promotional lineup, we can have all 24 beds online and deliver them nationwide."

The goal, he says, is to pay attention to service. "The number of SKUs we can have online is unlimited," he says. "The Internet is one of the areas that we're counting on to catapult us into the future."

Forever evolving, the Internet is not the only focus for Furniture First. "We will continue emphasizing the private label program, financing programs and supplier partner programs," he says. "Our overall objective is to continue trying to make the members and suppliers as efficient and profitable as possible. We are all about networking and sharing information."

Take it From a Member
Members have similar things to say about the benefits provided by belonging to Furniture First and have lasting impressions on how Furniture First has helped them.

Lester Gorin of Gorin's Furniture, Norwich, Conn., notes, "Furniture First offers a tremendous amount of informative services. If you have any ideas that you need to bounce off someone, Bill Hartman always has an open ear and gives good advice in the dealer's best interest. It's nice to belong to an organization that cares."

Other members cite the overall improvements the co-op has made over the years, resulting in member successes. "I have been associated with Furniture First for 10 years," says Ron Huber, Oskar Huber Furniture, Southampton, Pa. "During this time, there have been numerous changes and improvements that have brought us to where we are today: a flourishing member-owned cooperative whose primary goal is to help members become more successful retailers. There is no question in my mind that participation in Furniture First's many programs has helped us to become more profitable."

"One of the things that I enjoy most about being a member of Furniture First is being able to converse with non-competing retailers on issues that we have faced while learning how others operate their own business," he continues. "I also have found the networking ideas generated from the different symposiums I have attended to be very beneficial. Under Bill Hartman's leadership, Furniture First has a bright future."

Cost savings is another attractive feature that members find useful. "We joined Furniture First to take advantage of the extra discounts and rebates," says Randy Coconis, Coconis Furniture, South Zanesville, Ohio. "However, the information available through networking and the exchange of ideas with fellow retailers is worth the cost of membership alone. Many of America's best furniture retailers are members of Furniture First and I'm glad we're able to associate with and learn from them."

Bob White, Godwin's Furniture, Midland, Mich., agrees: "We joined Furniture First with the intention of saving money via rebates and discounts, but it has also exceeded our expectations with streamlining our operations; mainly due to networking with other dealers at the annual symposium."

In the end, Furniture First's strategic vision is to become the best retail furniture buying group in the United States. The group continually focuses on establishing and constantly improving profitable partnerships with its mem bers, suppliers, employees, customers and the community.

Why Co-ops Form
A cooperative is a business. Co-ops range in size from small store-fronts to large Fortune 500 companies. In many ways, they're like any other business; but in several important ways they're unique and different.

Co-ops such as Furniture first are formed by their members when the marketplace fails to provide needed goods or services at affordable prices and acceptable quality, according to the National Cooperative Business Association.

"Cooperatives empower people to improve their quality of life and enhance their economic opportunities through self-help," the association reports. "Throughout the world, cooperatives are providing co-op members with financial services, utilities, consumer goods, affordable housing, and other services that would otherwise not be available to them."

The association says co-ops are motivated not by profit, but by service-to meet their members' needs for affordable and high quality goods or services. Today, more than 120 million people - or two of every five people - are members of 48,000 U.S. cooperatives. Worldwide, some 750,000 cooperatives serve 730 million members.