By Avivit Shein
There are thousands of furniture stores in Israel, and new ones appear almost every day. Many of the stores are


concentrated in certain areas, the biggest ones being the Rishon Letzion industrial zone, the Check Post Junction in Haifa and Herzl Street in Tel Aviv.

?The furniture market in Israel is controlled by private and neighborhood shops,? said Pini Goldstein, vice president for trade and marketing at the Beitili chain. ?When we do a tour for our overseas suppliers, they are stunned. In Europe or the United States, there is nothing like Herzl Street. Abroad, large retailers control the market. In Israel, the presence of chain stores is small compared to private stores.?
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The frequent opening of new stores is also accompanied by many bankruptcies and closures.

The furniture business in Israel is one of the most problematic industries as far as customers are concerned. Tzipi Kivarsik, the Israeli Consumer Council?s ombudsman, said that of all the complaints forwarded to the council, the furniture business accounts for the second largest number of complaints. ?Of 1,500 complaints a month, 350 to 400 of them deal with furniture. The complaints are primarily about damaged goods being delivered and refusal to replace them with new, unblemished goods ? faded upholstery, cracks in leather furniture, pieces that fall apart, poor finishing and generally poor quality. Consumers also complain of goods being delivered that differ considerably from what was written in the order and of delays in delivery.? According to Kivarsik, most of the complaints refer to stores in the Rishon Letzion industrial zone, where the pace of new store openings is currently the highest.

With all these problems, there is another way of buying furniture. Nearly everywhere, in small stores, large companies and exclusive outlets, surplus furniture is sold at a discount of 10 to 50 percent. This is a good option for getting a good price on items that may be top of the line in stores and factories and that might normally be out of reach.

Furniture collections are changed once or twice a year. With every change, the furniture that was on the display in the showroom is sold at a discount, as is the remaining warehouse inventory of the old collection. Usually, the discounts on display models will be higher than those on unused goods from the warehouse.

Display models are found in the furniture stores themselves. Leftover inventory from an old collection, in contrast, can also be found in factories. Display models usually do not come with a full warranty, as opposed to new items, which do come with a warranty. But it is advisable to find out in any case, because sometimes, for example at Ikea, display items also come with a warranty and are eligible for repairs, just like new items.

Most of the large furniture retailers have surplus stores. Often, these stores exist less to make money than to promote the chain?s image. In order to nevertheless make them profitable, surplus stores often also carry the retailer?s regular, more expensive collection, or collections that were imported especially to be sold as surplus, instead of just the ?real? surplus. Eli Barhom, the CEO of Cactus Furniture, related that some three months ago, Cactus Furniture?s surplus store sold its entire surplus. ?I went to Italy and bought a container of leather couch sets specifically for the surplus store. Because they had too much inventory and they knew it was intended for our surplus store, I got a good price for them. It?s a very common practice.?

The stores and factories that do not have surplus stores have sales once or twice a year, either in the store itself or in a warehouse that they rent for the surplus sale. Some stores have a special bargain corner where surplus items are regularly on display.

Irregulars refer to furniture damaged during delivery. They can be found at the large retailers? surplus stores or in the large stores? bargain corners. Meir Bar-El, director general of the Israel Furniture Industries Association, said that members of the association do not sell irregulars. ?The factories don?t like to have irregulars floating around the market. They prefer to sell the top quality products at a discount rather than irregulars, because that damages their reputation. Factories would rather destroy furniture that can?t be repaired than sell it.?

In contrast, many retailers ? particularly importers, such as Cactus, for example ? prefer to sell rather than repair damaged goods. Barhom explained: ?As a company that sells the quantities that Cactus sells, it?s not worthwhile for us to deal with minor repairs, because that takes up a lot of time. We certainly prefer not to repair or even make minor repairs in order to sell an item as an irregular.? For the most part, stores do not provide full warranties on items sold as irregulars.

Another reason for selling furniture as surplus is manufacturers? overstocks. According to Bar-El, factories manufacture series of products and they always make more than the amount ordered or the amount for which they expect there to be a demand.

This is because flaws are sometimes discovered during the manufacturing process, and the reserve is needed to cover those items. However, when demand is as expected, the manufacturer is left with the reserve, which he then sells at a discount.

Even when furniture is manufactured for export, the surplus is sold in Israel for a reduced price, because the pricing was based on the quantity exported. In such cases, it is possible to buy top quality furniture at substantial discounts of up to 50 percent.

There is also a lot of import surplus in stores and chains that import furniture. Goldstein of Beitili related that a sofa upholstered in fabric, for example, is manufactured in Israel only after a customer makes an order, and therefore, there is not a lot of surplus. However, the leather industry in Israel is much less developed than it is in Italy, where the prices are unbeatable, so the company imports a given quantity of leather sofa sets from the larger lines, and whatever is not sold become surplus. Barhom added: ?We don?t return the goods abroad; we prefer to sell at a loss. This is because the cost of sending the goods back is very high.?

Sales of surplus goods take place at factory outlet stores, if the factory has one, or in the factory itself or in a warehouse. According to Bar-El, surpluses are not sold in stores because the factories do not want to affect the market and sell top quality items for such low prices.

Sales take place when a large quantity of surplus items has accumulated. One can find out about them from advertisements that the factories publish in the papers.

The Israel Furniture Industries Association?s web site has links to factories that are members of the association, which enable surfers to find out about special sales. The address is www.furnish.co.il. Consumers can find out about import surpluses from ads published by stores and chains or by visiting retailers? surplus stores, where surplus goods are sold on a regular basis.