One of the strongest features of National Furniture’s channels of distribution is vertical integration.  The company is almost completely self-sufficient as a company in it’s manufacturing and selling operations, and it takes advantage of a very tight distribution chain in order to hold costs down and get it’s products to market as quickly and efficiently as possible.

The company manufactures almost all of it’s final products, but it does purchase raw materials for inputs to those products, as well as some screws and knobs affixed to the final products.  National Furniture has considered complete vertical integration a number of times, but it’s internal studies have found that sourcing these products is more cost efficient.  (For more information on the process by which it obtains these inputs, please see the Sourcing section of the OPERATIONS chapter of this business plan.)

National Furniture manufacturers ready-to-use furniture, which it delivers directly to one of three places: it’s warehouse for inventory, a wholesaler, or one of it’s two retail outlets. (For more information on the inventory destination, please see the Inventory section of the PRODUCT chapter of this business plan.)

National Furniture uses two wholesale department stores to facilitate distribution of it’s goods to consumers.  The company has studied the possibility of exclusively selling it’s furniture through it’s own retail outlets, but found that the additional prestige of being carried in fine department stores makes it’s products more sellable, both in the department stores, and in it’s own stores.   

In addition, the effect of cannibalization from competing sales seems to be small since different consumers tend to shop at upscale fashion malls from those who frequent factory-direct outlets.  Nevertheless, the product sold is the same, only the means of distribution are different in this case.

The consulting services are offered solely by National Furniture.  No other companies are authorized to provide official consulting services for company products.  This added value has helped bring the consulting division into the mainstream of channels of distribution, since the consultants are often able to ease the transition between consumer interest and purchase.  The expert opinions provided by it’s consultants have made them valuable facilitators in the channel of distribution.