How to Start a Furniture Export Business: Get all the details here

The importance of export is immense in all modern economies, from advanced to developing and under-developed. Exports have a role in improving production levels, increasing job opportunities, and influencing wages and standard of living.

Exports also help a country's economy reduce the impact of the domestic recession. Every country across the globe places a high emphasis on their export business.

Furniture export is a developing segment and offers a good potential among India's top exported items; therefore, focussing on this sector can bring quick results. Wooden furniture accounts for 60% of total furniture export from India. The variety, designs of Indian wooden furniture can be the product differentiator in the furniture export market.

Workers in the furniture trade in India have always been acknowledged for their skills. Intricate designs on various articles (of furniture) have long been appreciated, and many such pieces are proudly displayed in museums.

Export ranks high on the priority list in India's economic policy, and the Foreign Trade Policy (FTP) provides for several incentives for exports through schemes like Merchandise Exports from India (MEIS) and Export Promotion Capital Goods (EPCG).

Starting an Export Business in India

For someone already in the furniture trade, branching out to a furniture export business is easy. However, the process of export involves plenty of documentation and compliances even before your first consignment is shipped. Anyone from outside the industry (furniture) can also enter the furniture export business.

A summarised list of action required to begin the export process is given below:

Finalise a name for your export business
Register your business entity
Obtain a PAN card
Open a bank account (current account)
Get an IEC code (Import Export Code, registration code issued by the Foreign trade office under the ministry of commerce, Government of India)
RCMC certificate ( Registration with an export promotion council; exporters can avail assistance in various issue from the council; further, certain export benefits are offered through such panels)

If your company is already registered and has the required bank account and PAN, you need not open a separate firm for exports. You may choose to register your existing company and complete the procedures for IEC and RCMC.

Special export Incentives

Many of these schemes may not apply to a new entrant to the field of furniture export, but keeping track of the details may come in handy when you scale up your export business

Import replenishment license (REP): Under this scheme, exporters are permitted to import raw materials/components used to manufacture the export items.
Impex (Import-export) passbook: Recognised export houses and manufacturers can import duty-free raw materials under this scheme.
Export-oriented units: Units exporting their entire production and located in the special trade zones in the country (FTZ) will enjoy a complete income tax holiday for five years.
Tax exemption on export earnings: The profits from export earnings are deducted by 50 % for tax calculation.
Other tax exemptions: A mechanism of duty drawback allows a company.
Cash assistance: This scheme offers price reimbursement in specific cases and specific products matching international market prices.

How to find buyers for your furniture export business ?

The following steps can help you to find a buyer:

1. Export promotion council

Approach the concerned export promotion council (for furniture); your firm is already a member. They can provide initial guidance on the prospective countries to target; they can also share names of importers from the shortlisted countries and statistics of previous furniture export.

You need to contact potential buyers as per the list for direct negotiation.

2. Foreign consulates

The embassies and diplomatic missions of several countries can be a source of information on exports. Most embassies and consulates have a trade-related section that helps potential exporters by guiding them with selling tips for Indian products to that country.

Embassies also provide details of trade organisations involved in importing goods. As the potential exporter, you have to carry out due diligence on the credibility of the foreign buyers interested in your furniture.

3. Trade Exhibitions

Exhibitions are a direct platform for interacting with prospective international buyers. In India and foreign venues, trade fairs are among the best events for boosting export business. The entire trade ecosystem (buyers, sellers, and other stakeholders) gathers under one roof in these fair venues and has networking opportunities. Such events also give you a chance to showcase your products.

The concerned export promotion council in India has all the information and schedules of forthcoming trade exhibitions worldwide.

4. Export directory

You should enlist your company with the various online export directory services. Contacting established commission agents in India or abroad can be another information source on prospective buyers.

5. Professional data services

Several research agencies and other organisations offer country-wise and category –wise buyer directories. You may buy the one relevant to your furniture items.

6. Own website

Launch your company’s website focusing on exports. SEO techniques may give you a profile of your potential buyers.

Once you are transparent with export procedures, it’s time to utilise the export business opportunities.

Tips for improving your furniture export business

Select the best markets

The top countries for furniture export from India are the USA, Germany, Netherlands, UK and France. As these markets have an experience of Indian furniture, your entry may be easy.

Understand the demand pattern

Clarity on the types/varieties preferred in specific markets will help you work out your product-wise export plan and cost estimates.

Find the right channel partner

It is not easy to service buyers in another country. A local partner/representative can do the coordination. Embassies can help you in establishing the credibility of your channel partner.

Export benefits

Make the best use of all available schemes for exports. Unless you consider all the incentives for your pricing, your product cost may be higher.

Product catalogue

A high-quality business catalogue (digital/print depending on your buyers’ requirement) with product details and specifications is a primary requirement. It is necessary to focus on the points which buyers typically ask for. Please remember that in export sales, images and visuals play an essential role in business generation.

Quality Control

Take extra care in meeting the product standard and specification as per the buyer’s order. Pre-shipment inspection is your last opportunity to re-check the specification and design aspect. Once the consignment is shipped, there is no scope for rectification. Rejection (of an order) can be a severe financial burden on a small business

Conclusion

The role of documentation in export is considerable, and as the first step in the furniture export business, you need a clear understanding of the procedures and policies. You can generate primary data on furniture export from the concerned export promotion council. Finding a buyer, offering the right product, price and terms, are the following steps that will lead to the shipment of your first consignment.

Also Read:

1) How to Start a Notebook Manufacturing Company?
2) How to Start a Gold Jewellery Export Business?
3) How to Get an Ayurvedic Medicine Manufacturer License?
4) OkCredit: All you need to know about OkCredit & how it works.

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FAQs

Q. Is a furniture export business in India profitable?

Ans. Export profitability is different from local sales. You need to understand each aspect of the procedures and incentives before you work out your export cost.

Besides direct cost, higher capacity utilisation and the impact on your total costs must also be considered. Exports will add on to your total firm’s sales. Overall profitability (of your firm) has to be considered even when working out export contributions. This is because of the indirect benefits that export offers.

Q. What specific furniture items have high export potential?

Ans. The choice of items is always as per the buyer or customer. It applies to all kinds of sales, domestic or export. Based on an overall requirement, you can discuss specifics with your potential buyer.

It is suggested that traditional furniture items based on handcrafted skills can provide a unique product option to a foreign buyer. However, quality considerations must be given top priority.

Q. A small furniture manufacturer may not be able to manage all the export formalities. What is a way out?

Ans. Every business area has its specific requirements. Export business involves considerable documentation. The export promotion councils have been created to help and encourage exporters. Besides, many chambers of commerce (there may be one in your city) have an export guidance cell, mainly for small businesses. You may approach them. Alternatively, you may also consider hiring the services of an experienced consultant to guide you on the procedures.