A furniture store makes money by selling items to customers and then selling the items that they buy. The profit comes from the difference between the amount they were paid and the amount they sell them for. This means that you need to work out all of your costs (things like rent, rates or insurance) first before working out how much each item costs and then how much income you will make for each sale.
If you’re selling a sofa, for example, you will need to know how much the fabric and frame cost and how much profit you make from each one. You may also want to work out how many sofas you sell in a year (or month or week).
When a furniture store sells a piece of furniture, it has to purchase the goods at wholesale prices and then mark up or add a profit margin on top. This ensures that the store earns money. The profit margin is typically between 40% and 60%, depending upon the quality and type of furniture sold; higher-end products might have wider margins because people are willing to pay more for them.
A furniture store makes a lot of profit if they sell high quality furniture, have good customer service and pay attention to details. Because the materials used to make the furniture cost relatively little compared to the price, it is important that stores make their sales prices attractive, so customers buy a lot.