Defying the secrecy of the industry, this article exposes UK office furniture costs to help buyers understand what they should be paying – and how to save.
Cost per Staff Member
The following office furniture costs assume each staff member has, on average, a desk, adjustable chair, under-desk set of drawers, meeting chair, one quarter of a meeting table and one fifth of a sofa – all delivered and installed.
So the amounts in Figure 1 can be multiplied by the number of staff to estimate the cost of all office furniture, except for special requirements.
Historically, office furniture costs have been proportional to quality. So buyers have had to trade-off quality versus price. However, thanks to recent advancements in remanufacturing, high quality stylish office furniture can be purchased at surprisingly low prices, as shown below.
Figure 1: Office Furniture Costs per Staff Member in the UK
Sources for Distributor figures: Interion, Furniture Budget Guide. (Accessed 9 May 2017 at https://interion.co.uk/budget-guide); Office Principles, Cost Calculator. (Accessed 9 May 2017 at http://officeprinciples.com/planning/cost-calculator/). Source for Remanufactured figures: Rype Office projects 2015-2017.
- No Good Reason to Buy Basic New Furniture
Remanufacturing offers Mid-range office furniture at a lower cost than new Basic furniture. The lifetime value of Basic furniture has always been questioned, with its short lifespan requiring more frequent replacement and poor ergonomics causing expensive staff health complaints. For many, the up-front cost has decided the issue. But with remanufactured Mid-range furniture now having a lower up-front cost AND greater lifetime value, Basic furniture is justifiably under threat.
- High End Furniture Now Affordable
Remanufacturing has put High end furniture at the same price as Basic new furniture – and lower than Mid-range new furniture. This allows organisations with tight budgets to have the very best quality furniture, creating stylish offices and providing the greatest amenity and comfort for staff.
In recent austere years, some organisations have avoided buying High end furniture for fear that they will be judged as exuberant or over-funded – risking the ire of shareholders, visitors, the media and the public (to whom government institutions are accountable). Remanufactured High end office furniture resolves this tension and showcases the buyer’s sustainability credentials and financial thrift.
Understanding the Sources
Distributors. The majority of office furniture is sold through distributors, who represent one or more manufacturers and pass on orders in return for a significant markup – ranging from around 20% for discount online retailers to 100% for those with fancy showrooms. Distributors only sell new furniture because it is easy, it is what they have always done, and the high price of new furniture maximises their profits.
Buyers with very large volumes (think household name corporations and very large government departments) can go straight to the furniture manufacturers to eliminate the distribution markup and drive down their office furniture costs with large volume orders. Sadly, this is not an option for most organisations, who will be referred by manufacturers to their distributors.
Remanufacturers. This new breed of furniture seller is also the (re)manufacturer, which eliminates distributor markups. Remanufacturers also have a structurally lower cost base than new furniture manufacturers, because they source furniture that is no longer wanted at low prices and then invest labour and parts to bring the items back to as-new appearance and performance. Thanks to advancements in technology and circular economy processes, remanufacturers can remake an item for significantly less than the cost of new. For more on remanufacturing, see What is Remanufactured Office Furniture. The economics of remanufacturing are explained at How to Halve Your Office Furniture Bill. Note that just as large volume buyers can go direct to manufacturers for discounts, remanufacturers also offer volume discounts.
The Three Office Furniture Levels
There are basically three levels of specification for office furniture:
- High end. Elegant lines, beautiful materials, appealing colours and timelessness – all desirable traits which define this top tier of office furniture. Brands like Vitra, Orangebox, Allermuir, and Steelcase have earned their place in this group with attractive ranges which look good everywhere.
- Mid-range. This is well made furniture with good ergonomics, although each model can be difficult to distinguish between manufacturers. Mid-range office furniture has historically appealed to organisations by keeping staff and visitors comfortable and the office looking neat and tidy – without breaking the bank.
- Basic. The key feature of Basic furniture is that it historically has been the cheapest. Cost engineering has limited the colours (think black and royal blue), functionality, comfort, visual appeal and longevity of these items. This has historically been the go-to furniture for organisations with very limited budgets. This is the furniture seen extensively in government (think hospitals) and charities.
Note that manufacturers may offer several ranges (e.g. different models of desk chairs at different price points) that span two or more of these levels – in order to appeal to as many customers as possible.
A Furniture Revolution?
More and more organisations are choosing remanufactured office furniture to capture cost savings and improve their sustainability, including British Land, JLL, RBS, Imperial College London, and Cummins.
They are creating stylish and sustainable offices while saving money.
ABOUT THE AUTHOR
Greg Lavery is the Managing Director of Rype Office, which is at the forefront of the office furniture remanufacturing revolution, remaking furniture and assisting clients (for no fee) to design beautiful, productive and sustainable offices using approaches new to the interior design world (such as choosing plants for their ability to absorb toxic ozone and placing them next to photocopiers to clean the air). Contact: Greg.Lavery@RypeOffice.com Phone: 033 3358 3330.