Home Stagers: Is my inventory bigger than yours?

Well Debra, I don't usually disagree with you but...  I have heard the same sentiment from many stagers around the country but here in Indy and I can only speak for Indy,,,, We went through a spell in the beginning that we could not get a vacant staging project.  People just plain refused to pay the cost and terms dictated by the rental companies.  So we purchased and as the business grew we continued to purchase.  And as far as measuring success, well I do agree with you, it can not be measured by the size of your warehouse or how many sofa's you have, but I can assure you it can be measured by how much of the stuff you keep out in vacant staged homes.  Now I will grant you that buying inventory is not for the faint of heart.  You have to be confident in the fact that if you start buying inventory for vacant projects as they come,that work will continue to come and you can continue to rent and re-rent what you have purchased.  If this does not happen, you are correct, the debt won't go away.  But if you maintain a strong business and can continue to re-rent your furnishings, the debt comes and quickly goes.  Our philosophy is supported in this market every day by the amount of other staging business that are faced with the double whammy of sorts, theyjust cannot secure projects because most of them require furnishings and they cannot use rental companies because no one will pay what the rental companies want. 

Just my 2 cents from my little corner of the world

No rental companies in my area so it's a mute point.  Gotta do what I gotta do. 

 Owning my own inventory allows me to bring a better selection and price to my market than rental companies. The rental companies in my area do not offer much for home staging. Most of my business is vacant staging, and I receive a better ROI by owning my inventory. I only purchase what I need. I do agree that some stagers may get in to far and end up with debt that they may not be able to repay. I would be interested in knowing how you stage vacant homes without any inventory? Do you rent everything? If so then you have some great companies in your area. This may not be true for all stagers such as myself. I have no choice if I want to stage vacant homes, I need to carry inventory.

Debra - I think it is great that you have been able to use rental companies and get everything you need and can be competitively priced, in your market.  So far in our business, we own our inventory and looking at my books for the past 5 years, that is where we have made our money.  It can be a pain and a lot of overhead is involved.  Although, everything we have purchased has paid for itself.  As far as future buying, I'm not sure what direction I will go toward.  It is expensive to own, but the power of determining my own price control and knowing the profit comes back to me has been worth it so far.  When more rental companies come on board in my area, I will think about using them.

Ah the age old debate of owning vs not. I believe in many instances the decision is largely made for you based on geographic location and your proximity to good suppliers. You either have access to rental companies or you don't. I don't.

My partner and I made the decision early on that if we were to survive, we'd need inventory and since then we have never looked back. While we have incurred debt through building our inventory we have also made the decision that we are going to be the leader in our market for the service we offer. Full stop. While the inventory we possess has now well exceeded an average banking executive salary (covering sofas, beds, mattresses, linen, artwork, lamps, dining tables, chairs and everything else you could imagine) we have had a lont of enjoyment finding, locating, buying and repaying this stock.

Sure there are the costs of having stock sitting in warehouse (the warehouse itself), inventory management, repairs, cleaning and removalists, but there are also VERY good things about owning inventory. I know where everything is in my warehouse and can walk through a property knowing what will go where without having to go shopping all over town. I know the sizes of my stock so I know what will fit in given spaces. There is no waiting for stock to arrive after you have ordered it in order to furnish a property. I am not restricted to using the 'nanna' furniture the very small rental company offers locally. I know the furniture is of good quality and reflects the look I am looking for. But best of all, I know ALL the funds from the project come back to MY business and that is what keeps it alive.

My business would not have survived on consultations alone and has been completely developed based on having stock. All profits for the first year have gone DIRECTLY back into the business. I personally have not made one cent from my business yet but I have made the foundations strong for the future.

And yes, inventory is difficult to manage, time consuming to maintain, expensive to look after and requires a lot of space to store so don't just jump in, be prepared.

The good news is that once it has paid for itself you can sell it for almost what you paid for it if you were smart on pricing at the initial purchase. Don't buy too much retail, look for wholesalers who discount.

Cheers

Adam

Hi Debra - I started out renting and purchasing the smaller accessories and linens.  At my peak last year, I had 19 vacant homes staged and due to the limited selection available with the one rental company available in my area, a lot of the homes had the same furniture.  I am in a rather small market, and I feel that can be a problem, plus most of my income last year went straight back out to pay the rental fees.  This year, I have made the commitment to own more of my inventory.  I have been purchasing all inventory below retail.  So far of the vacant homes that I have staged, I own all the inventory in 4 of them.  My goal is to own inventory for 10 homes by the end of this year and supplement with rental furniture.  I have also made a commitment not to buy any of my inventory on credit and pay for it as I go from money from the business.  My bottom line should go up this year because of owning at least half of my inventory.  I can already see a difference.  Based on my first year in the business and my projections for 2009,  I can actually make a decient living on my rental fees based on owning furniture in 10 vacant home and keeping it out each month. 

You are right...there are costs involved.  The biggest I have found is transportation.  My son works with me and presently we move everything ourselves.  I make sure to purchase only pieces we can move ourselves, but I am looking into hiring professional movers as we get busier again this year and have allowed for that in my budget.  Storage has not been a big issue because most of our inventory goes from one house to another one.  We have two 300 square foot climate controlled storage units.

I agree with the other comments, each market is different.  I have found in order to grow my bottom line, I needed to own my inventory.

Thanks for the great post to get us all talking and thinking.      

Hi Debra!

Thanks for the post. I too wanted to see how other fellow stagers work. As for me, I own a large inventory of accessories, art, etc which I rent at 20% of retail price/month and I never buy retail price. Everything is stored in my basement and I have my husband carry them up  and down:) I know it is not fair for him, but he is not yet entertaining the idea of using our fairly big garage as our own warehouse. Renting a storage facility can be very costly and inconvenient for me, let aside the pests issue. So far I made very good money by renting my own accessories and I recuperated most of the investment.

With the market these days, when a property will sit on the market for more than a month, I will have to re-think the whole inventory rental fees, offering some breaks for the home seller.

The big pieces of furniture I rent, to make my life easier, as we are fortunate here to have many rental companies to choose from. Sometimes the items I want are not in stock, but I always found some replacements that did the job.

Monica

I agree that it depends on your location. I find that I owning my own inventory and in particular my own large pieces of artwork have worked for me. I tend to work in larger scale homes and the rental price for artwork in these homes is beyond what clients are willing to pay.  Owning my own cured that problem. I have my own storage on my property so no added cost there. All my inventory was paid for in cash so no worries there. I keep most of it out on a consistent basis. I find if you do vacants, you will find that you make more profit if you own your own inventory.

On the other hand, I staged a house recently using the homeowners items and some that belonged to her daughter. Was my usual look- far from it. Did it look better, did it market the property- definitely.

Hi Debra - I probably would not own inventory had there been decent furniture available for rent in my area.  It is definately an investment that many aren't prepared for and to be totally honest, one I probably wasn't in the beginning either. 

Now that we do own inventory - and a lot of it - we find that it does allow us an edge on our competition - primarily because of the lack of inventory available for rent.  It also allows us a lot of flexibility on style, price, etc.  Again, we aren't at the mercy of someone else. 

When I talk to new stagers I try to be very honest about this, how much we have, what our debt is, cash flow, storage needs, etc.  Our company is positively in the green, but we are also holding some pretty big debts.  It is something stagers need to think over carefully before embarking on.... it also quickly becomes a tumbleweed thing.  There never seems to be an end of need of inventory, no matter how much you have.

Hi Debra,

I have recently sold off all of my inventory for many of the reasons you have cited in your post -

I got tired of storing it, tired of logging it - tired of keeping track

there are many great rental company's I can use now and if the homeowners are keen to bring in new pieces we can shop and they can purchase and bring them to their new house

Great post

Hi Debra,

We operate a blend of renting from suppliers and owning our own inventory.

The rental supply here is limited, although we have negotiated terms and continue to pursue local retailers in the hope that we can expand the offerings here in Calgary.

Our inventory primarily includes accessories, textiles, lighting and artwork. The advantage to owning our own stock is the residual income the company receives.

I have no doubt though that if we were operating in the GTA or Vancouver we would have a different business model!

Wow!  I am so glad you posed this question.  I appreciate all of the comments!  I started my business thinking I needed to have inventory and someday a warehouse, etc, etc, etc.  It is very easy to get caught up in that.  The accesories and linens I have purchased, I do use often, but I have put my foot down about furniture and large pieces.  I totally see the value, but can't justify the cost.  I rarely do vacant homes and when I have, we have gotten very creative.  I would love to have at my fingertips the items I would like to stage a home with, but ... there is a certain satisfaction knowing that I can keep costs down for the seller and still make their home look appealing.  The market I am in is very small and most of the builders have their own agreements with the furniture companies.  There is always room to grow, but for now, I have kept my inventory small enough to keep in a spare room in my basement.

Wow, Debra...

Alot of great feedback...Thanks guys!  I'd prefer not to "rent" warehouse space, so...I better quit shopping...lol!

Debra - While making the commitment to own one's inventory is a decision no one should take lightly, we decided from the inception of our company two years ago that this would be our business plan.  We have a warehouse, truck, and inventory.  This gives us the competitive edge in several areas inclding pricing, style (you never know what may be available at a rental company), the ability to stage quickly, and no minimum rental periods.   While I'm jealous of the fact you have no business debt, this model has worked for our company.  I certainly see the pros and cons to both viewpoints, but this is the approach we have opted for and thus far it has proven successful.  Great topic.  Thanks for posting!

I have my own inventory of accessories, artwork and small furniture that can be moved by 2 people (including several blow-up beds plus all of the bedding).  I use an outside source for large furniture rentals.  My cleaning lady has a heated 2 car garage that I rent for my "stuff".  That works out really well for me - I get double the storage space for about half the cost of other storage facilities and it's climate controlled.  My insurance company was okay with that arrangement as well, so it's a win-win situation.  I don't really have any interest in getting into large furniture rentals or I would have to look for alternate storage.  I just don't think that would make sense for me.  Great discussion on this post!

This is a great thread! I wish we could get everyone to anonymously submit their P&L statements -- then the proof would be in the pudding. I guess I can see how owning inventory would make sense if you're in a geographic area which doesn't have other options. (In my opinion, owning rental furniture and being a stager are almost two different businesses.)

I'm a numbers gal, and have never found how carrying our own inventory can work. We have minimized our inventory to just accesories and even then, I don't like to hold on to those. I could go on an on about this topic!

I hear time and time again that stagers aren't able to pay themselves a salary or if they do, they are making far less than minimum wage. There is something wrong with that! We are way too valuable of an asset to realtors and sellers to be underpaid.

I've got to log off, and go give myself a raise. :-)

i have to say i am torn between renting and owning. with renting now you have a bill to pay,  owning now you need space to keep the it at, then what happens when style and color changes. honestly i haven't made a choice yet however within time i know i will.