Used Office Furniture is Piling Up with No End
in Sight
Office furniture is used by all businesses in every industry. In a growing economy, millions of jobs are created, and these people need a place to work, driving demand for desks, credenzas, file cabinets, chairs, modular furniture systems (MFS) and more. A shrinking economy has the opposite effect. Currently, manufactures of new office furniture are experiencing drastic reductions in volume while inexpensive imports simultaneously squeeze margins.
MFS (also generally referred to as “cubicles”) make up about 30% of the office landscape. These office systems are designed to meet the specific floor plan requirements of the building in which they are installed which allows this often high cost floor space to be densely utilized.
One workstation can consist of many parts and pieces like wall panels, tables, filing cabinets, bookshelves, etc. All of these parts are assembled in-place like a huge erector set. The assembly process is labor intensive, time consuming and expensive and so is the process of dismantlement, transportation and reinstallation if the furniture is sold.
Most MFS are sold to dealers of used office furniture who will, in turn, identify end users with a specific need for the furniture. Dealers sell MFS to end users in as-is condition; some refurbish the MFS; and others essentially remanufacture the used components to customer specifications, restoring them to like new condition. End users are less likely to buy MFS directly from sellers because breaking down and re-erecting these systems requires planning and expertise. And, inevitably, there will be too many of certain parts and not enough of others requiring the purchase of additional components and close coordination on both job sites. In good times, these factors have a negative impact the value and marketability of used MFS. In challenging times like these, finding buyers for MFS and other used office furniture is hit or miss.
While some used office furniture remains salable, transactions involving dealers and remanufacturers are event driven and demand is unpredictable. Conversely, these same dealers and remanufactures are being offered an endless supply of used furniture often abandoned by the former owners who have either not had time or have found it impossible to sell the furniture. This often creates a liability for landlords and has resulted in some furniture being given away to make room for new tenants while in other cases sellers must pay to have the furniture removed and discarded.
We do not expect the demand for used office furniture to improve in the near future. Instead, it is likely supply will continue to outpace demand by significant levels.